When it comes to renting residential premises, tenants often provide landlords with a security deposit as a form of financial protection.

But what happens to this deposit if a tenant decides to break their lease?

Can landlords keep the deposit in such cases?

Let’s delve into the intricacies of security deposit retention and the relevant regulations outlined in the Residential Tenancies Act (RTA) in Alberta.

Does a Lease Break Mean the Landlord can Keep the Deposit?

Technically no, when a tenant decides to break their lease, it doesn’t necessarily trigger an automatic forfeiture of the entire security deposit.

Instead, it triggers the process of returning the deposit or remainder of the deposit after applying certain deductions.

The RTA lays out specific criteria that must be met for a landlord to retain all or part of the deposit.

Criteria for Retaining the Deposit

1. Damages Beyond Normal Wear and Tear: Landlords can retain the security deposit to cover damages beyond what is considered normal wear and tear to the residential premises. This implies that minor wear resulting from regular use is not a valid reason to withhold the deposit.
2. Meeting Inspection Requirements: Before deducting any amount from the security deposit for damages, landlords are required to fulfill the inspection report requirements outlined in Section 19 of the RTA. If these requirements are not met, the landlord’s ability to retain the deposit might be compromised.
3. Providing Statement of Account: In case damages warrant the deduction of the security deposit, the landlord must provide the tenant with a statement of account. This statement outlines the amount deducted and the specific reasons for the deduction.
4. Time Limit for Return: The landlord must return the security deposit, minus any valid deductions, to the tenant within 10 days after the tenant gives up possession of the residential premises. If deductions are still to be determined, the balance of the deposit must be returned within 30 days, along with an estimated statement of account. If these timelines are not adhered to, the tenant can take legal action to recover the deposit.

Source: Official Alberta RTA

Handling Disputes

Disputes regarding security deposit retention can be handled through legal channels, including court proceedings. Tenants who believe their security deposit has been wrongly withheld can initiate an action in court to recover the full or partial amount.

In Summary

• Breaking a lease doesn’t automatically mean the landlord keeps the security deposit.
• Specific criteria must be met for a landlord to retain all or part of the deposit.
• Damages beyond normal wear and tear must be proven, inspection report requirements fulfilled, and a statement of account provided.
• The security deposit must be returned within specified timeframes if deductions are not immediately determined.