How much deposit can you collect?
In British Columbia the Residential Tenancy Act and the Regulations outline Landlords responsibilities for landlords and Tenants. When renting a property landlords are permitted to collect a Security and Pet Deposit when renting their property. The tenancy act restricts the amount of security and pet deposit landlords can collect.
A security deposit can only equal half of the total of the first month’s rent. This amount can’t be amended during the tenancy even when the rent is increased. Landlords often try and request tenants increase the deposit amount when they increase the rent. In some cases we have seen advertised properties listing the security deposit at one full month’s rent, which is a violation of the Residential Tenancy Act.
Another important factor to understand about the security deposit is that it doesn’t belong to the Landlord. They hold it in the event it needs to be used. We have seen some landlords say they used the security deposit to complete repairs during the tenancy caused by the tenants. The security deposit can only be used by the landolrd at the end of the tenancy when agreed upon by both parties. Both the landlord and tenant must agree that a portion of all of the deposit can be given to the landlord to pay for damage to the property or other factors including unpaid rent or utilities.
For pet deposits the maximum amount is the same as the security deposit, half of one month’s rent. The difference with the pet deposit is this can be collected during a tenancy if a pet is added later. If the tenant has lived at the property for two years and the rent has increased during that time then the deposit amount collected, a landlord is permitted to request the amount be the equivalent of 50% of the current rental amount not the amount at the start of the tenancy. If a tenant adds a pet during a tenancy it is important to perform a new condition inspection report to understand the differences between when the pet arrived and when the tenant vacates the property.
As with the security deposits Pet deposits are funds owed to the tenant at the end of the tenancy if there is determined not to be any damage caused by the tenants pet. These funds do not belong to the landlord to use for repairs at the property during the tenancy. A landlord is not permitted to keep any funds from the security or pet deposit without either permission from the tenant or an order from the residential tenancy branch. If both parties are in a disagreement at the end of the tenancy as to how much should be kept for damages then the landlord must file a claim with the tenancy branch to keep any portion of the deposits.
Landlords are also required to pay the tenant the interest earned on the deposits during the time the tenant occupied the rental property. If the landlord files a claim with the RTB, a hearing will be held and the landlord holds all the funds until the hearing is heard and an arbitrator determines an amount to be kept or returned to the tenant.
Cartref Properties can assist you, call today to discuss your needs. You can find more information about us at: www.cartrefproperties.com
