Returning the Tenant’s Security and Pet Damage Deposit

When am I allowed to keep my tenant’s security deposit and/or pet damage deposit?

BC Landlord Guide- Return of Deposits
When am I allowed to keep my tenant’s security deposit and/or pet damage deposit?

Upon vacating, the tenant must leave the rental unit reasonably clean and undamaged except for reasonable wear and tear. The tenant must also return all keys or other means of access that in are in the possession or control of the tenant and that allow access to and within the residential property.

While the standard of “reasonably clean and undamaged” is subject to interpretation, the Residential Tenancy Branch provides some indication as to what the standard is. Generally, any changes or renovations to the rental unit not explicitly agreed to by the landlord must be returned to their original condition. The tenant is responsible for shampooing or steam cleaning the carpets of the rental unit if the tenant has stained the carpets or, in any event, if a tenancy of one year or greater comes to an end. Furthermore, at the end of a tenancy of any length, the tenant is responsible for cleaning the inside windows as well as major appliances including the stove-top, elements, oven, refrigerator and dishwasher. For a more comprehensive list of the tenant’s cleaning and repair obligations at the end of a tenancy, please consult the Residential Tenancy Branch’s guidelines.

Within 15 days of the later of (1) the date the tenancy ends and (2) the date the landlord receives the tenant’s forwarding address in writing, the landlord must either return the tenant’s security deposit and pet damage deposit (if applicable) with interest (prime rate minus 4.5%) or make an Application for Dispute Resolution to claim against either (or both) of the two deposits.

However, there are a few important exceptions to the landlord’s obligation to return the security or pet damage deposit. Where the landlord has complied with their obligations and a tenant has failed to participate in the move-in inspection or move-out inspection, the tenant’s right to the return of the security deposit or the pet damage deposit (or both) is extinguished and the landlord may simply keep the deposit(s). Furthermore, if the landlord has obtained an order from the Residential Tenancy Branch for payment of an amount by the tenant and that amount remains unpaid at the end of the tenancy, the landlord may retain that amount from the security deposit or the pet damage deposit. Finally, in any event, unless the landlord’s right to retain the security deposit or pet damage deposit has been extinguished, the landlord may retain an amount with the written consent of the tenant or pursuant to an order by the Residential Tenancy Branch after the tenancy has come to an end.

If within the required 15-day period the landlord fails to make an Application for Dispute Resolution or otherwise return the tenant’s security and pet damage deposit, the landlord loses the ability to make any claims against either deposits and must pay the tenant double the amount of the security deposit, pet damage deposit or both.

In the event that the tenant fails to provide the landlord with a forwarding address within a year after the end of the tenancy, the landlord may simply keep the security and pet damage deposit as the tenant’s right to the return of the deposits is extinguished.

Last revised: April 17, 2016

  • Landlords often make the mistake of assuming that if the tenant fails to fulfil their obligation to leave the rental unit reasonably clean and undamaged, that the landlord is automatically entitled to keep the security deposit. This is not the case and can in fact be a costly mistake.
  • You may be faced with a situation where the tenancy agreement has come to an end and your former-tenant has been fined by the strata corporation but these fines remain outstanding or where there is an indication that the strata may fine your former-tenant for an incident occurring during the tenancy but the strata council has not yet had an opportunity to meet to levy the fines. In such circumstances, you should make an application to the Residential Tenancy Branch to retain your former-tenant’s security deposit subject to the outcome of the tenant’s dispute with the strata corporation, as the strata corporation, acting within its power to do so, will very likely seek to recover the fines from you instead of chasing after your former-tenant.
  • The failure to return a security or pet damage deposit within the required time period can be a very costly mistake. You may insist on retaining part or all of the security or pet damage deposit because you wish to be compensated for damaged property. However, if you are not careful in following the rules, the Residential Tenancy Branch may order you to pay double the amount of the security deposit, pet damage deposit or both to the tenant- an order which may have the effect of setting off any claims against your tenant for property damage.
  • For instance, if you have a claim of $4000.00 for property damage but you fail to return a security deposit and a pet damage deposit of $1000.00 each or fail to make an application to the Residential Tenancy Branch within the required 15 day period, even if an arbitrator orders your former-tenant to fully compensate you for property damage, your former-tenant may be able to walk away owing nothing, as you will end up owing your former-tenant the same amount as a result of the doubling of the deposits.

This article explains in a general way the law that applies in British Columbia, Canada and is not a substitute for legal advice specific to your situation.