A landlord may require a security deposit (or a damage deposit) from the tenant upon entering into a tenancy agreement. However, landlords may not require more than one security deposit nor can they require a security deposit at any other time. The purpose of such deposit is to help cover the costs of any unpaid rent or damage to the rental unit that a tenant may cause.
Maximum Amount for Security Deposit
It is important to keep in mind that the amount of a security deposit cannot exceed the equivalent of one half (½) of one month’s rent payable under the tenancy agreement. In case of overpayment, the tenant may deduct the difference from their rent or may otherwise seek recovery. Any agreement whereby the landlord automatically keeps all or part of the security deposit at the end of the tenancy is unenforceable.
Last revised: October 16, 2022
Oscar’s Tips for Landlords
- Landlords often make the mistake of assuming that if there is any damage to the property over the course of a tenancy, they are automatically entitled to keep the tenant’s security deposit. This is, in fact, not the case and can turn out to be an expensive mistake.
- You may not demand from a tenant a further deposit for future expenses for professional cleaning. Such cleaning fee would be considered to be a ‘disguised’ security deposit and, assuming that you have already taken a security deposit from the tenant, such further deposit is not allowable.
