Part Three: Deducting From and Returning Deposits

Welcome to the final installment in our three part series on security deposits. (See the prior two weeks posts on Security and Pet Damage Deposits.)

Most issues for landlords surrounding deposits happen at the end of the tenancy, after the condition inspection has been completed. Many people do not know how to properly deduct from or return deposits and if either is not done properly, it can mean increased costs for the landlord. The landlord has 15 days from the end of the tenancy and/or the date you received the forwarding address (whichever is later) to do one of three things; your first option is to return all of the deposit(s). This does not mean that it has to be in the tenants hands within 15 days; just that it has to have left your hands in that time.

The next two options are used when you'd like to deduct any amount from the deposit(s). Once you know how much you'd like to keep, you can have the tenant agree in writing to the specific deductions and return the remainder, if any. Both the ROMS BC and Residential Tenancy Branch (RTB) Condition Inspection Reports contain "Security Deposit Statements;" you could use this section to record the amount of the deposit(s), any interest payable and whatever deductions you'd like to make. If the tenant agrees, they can sign authorizing the deductions.

Your last option for making deductions from the deposit(s) is to apply for dispute resolution at the RTB to retain all or part of either deposit. If your tenant owes you more than the deposit(s) will cover, you can include a request for an additional monetary order at the same time.

What do I do if my tenant does not give me a forwarding address?

Tenants are required to provide their forwarding address at the end of a tenancy. If they fail to do so, they are not entitled to claim their deposit back. Tenants have one year from the end of tenancy date to provide you with the address. After that time, they have lost their right to claim the deposit(s) back.

What if my tenant does not take part in the condition inspection?

The Residential Tenancy Act states that a tenant that does not take part in either condition inspection waves his or her right to the return of the deposit(s). That being said, if your tenant provides you with a forwarding address - even if he or she misses either or both inspection opportunities, you should still apply for dispute resolution to retain the deposit(s).

Do I have to pay interest on the deposit?

Yes; interest is payable on all security and pet damage deposits in BC. Each year, the Residential Tenancy Branch calculates the rate for that year. For 2012, the rate remains at 0.00% (which it has been since January 1, 2009). The RTB has an interest calculator available on their website, but just remember that you calculate interest from the date you receive the deposit to the date you return it (not from the start of the tenancy to the end).

Remember that every situation is different and the ROMS BC staff are here to help you work through any situation - deposit-related or otherwise.


-- Hunter Boucher and Carly Ludwar