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Security Deposits at the End of a Tenancy

Landlords should reasonably estimate costs, but will want to ensure that the estimate will cover the claims. Tenants are more likely to dispute unreasonable estimates.

If the actual costs are less than what the landlord estimated in the claim, any unused amount of security deposit must be refunded to the tenant.

The best solution is to get the tenant’s written agreement upon move-out that the landlord can keep some or all of the security deposit. If you get a written agreement at the end of the tenancy, you do not need to do anything else.  

Notice of a claim must be delivered in one of the approved forms:

A claim on a security deposit or refund must be delivered to the Tenant within seven business days. If sent by mail, three business days must be allowed for the mail to be delivered to the tenant before the seven business days expire. Claims on security deposits guaranteed by the Ministry of Social Services must be delivered to the Office of Residential Tenancies (ORT). Again, claims sent by mail are deemed to be delivered on the third business day after the letter is postmarked. Electronic delivery is deemed to occur on the first business day after the document is sent. To avoid late delivery, fax or email the claim to the ORT or personally deliver it to ORT.

The tenant may dispute the landlord’s claim on the security deposit by notifying the ORT.  The ORT will schedule a hearing and notify both the landlord and tenant by letter of the time and place of the hearing.  The letter is deemed to be delivered to both the landlord and the tenant on the third day after it is sent.

Within 10 days of receiving the letter, the landlord must:

  1. Pay the security deposit to the ORT; and
  2. File an updated list of damages with the Office, or confirm that the damages claimed are fully described on the original claim.

Landlords and Tenants must promptly provide copies of all receipts, invoices, photos and any other documents that they wish to use as evidence to the ORT and to the other party. Either party may ask that the hearing be adjourned if they feel that they have not had adequate time to review the documents. Further, parties sometimes withdraw claims or disputes when they see the evidence. Everyone saves time and stress when hearings can be cancelled. Parties should feel free to contact the ORT for information about their rights and responsibilities so they can decide if it is worth their time to proceed with the hearing.

The law requires the security deposit rules to be strictly followed. If a landlord does not pay the security deposit to the tenant within the time required, or to ORT when required, the landlord may lose their right to the security deposit and may be ordered to return it to the tenant. The ORT may make such an order without a hearing. The landlord may bring a claim for damages against the tenant, but will have to return the security deposit before filing their claim.

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