A security deposit is a mandatory payment that tenants make when signing a rental agreement in Edmonton. It is a financial instrument that protects landlords from potential losses, including unpaid rent, property damage, or indecent abandonment of the premises. Understanding how security deposits work, what rights tenants have, and how to get them back is critical for Ukrainian newcomers and all tenants in Alberta.
What is a security deposit
A security deposit (also called a “damage deposit”) is a sum of money that a tenant pays to the landlord at the beginning of the lease as a guarantee of their obligations. The main purpose of a security deposit is to provide a guarantee to the landlord in case the tenant fails to pay rent, damages the property beyond normal wear and tear, or leaves the premises in a rough condition.
Unlike traditional insurance, a security deposit is your money, held “in trust” (in a special trust account) and must be returned to you at the end of the lease if there are no legal grounds for withholding the funds. It is not a payment for the first month's rent, but a separate payment intended solely to protect the landlord.
It is important to understand that a security deposit is not a payment for the right to live in the premises — it is a guarantee deposit that must be returned when you move out.
Maximum security deposit amount in Alberta
Alberta has clear legal limits on the size of security deposits to prevent abuse by landlords. Under the Alberta Residential Tenancies Act (RTA), the security deposit cannot exceed the amount of the first month's rent.
This means that if your monthly rent is $1,500, the maximum security deposit cannot exceed $1,500. The law clearly prohibits landlords from charging a higher amount, regardless of the value of the property or its location.
It is important to note that if your rent increases during the lease, the security deposit remains unchanged at the amount set at the beginning of the lease. The law prohibits landlords from increasing the security deposit along with the rent increase.
Additional pet fees, administrative fees, or any other fees cannot be included in the security deposit. They must be treated separately as non-refundable fees if they are clearly specified in the lease agreement.
Where the security deposit is kept
Alberta law sets strict requirements for how landlords must keep security deposits in order to protect tenants' money. By law, the landlord MUST deposit the security deposit into a special interest-bearing trust account at a bank, credit union, or other financial institution in Alberta within two banking days of receiving payment from the tenant.
This trust account is significantly different from the landlord's personal bank account. The money is kept separate, and the landlord cannot use it for their own purposes. Unlike some other provinces, where landlords can keep deposits in their personal accounts, Alberta requires this separation to protect tenants' rights.
If a landlord does not comply with this requirement and keeps the security deposit in their personal account, it is a violation of the law, and tenants can file a complaint.
Interest on security deposits
Landlords in Alberta must pay their tenants interest on security deposits annually or at the end of the lease, whichever is longer. The interest rate is set by Alberta government regulation and changes annually based on rates available at financial institutions.
As of January 1, 2024, the minimum interest rate on security deposits is 1.6% per year. For 2025, the rate remains at 1.6%. For previous years, the rate was significantly lower — from 2009 to 2023, it was 0%.
The calculation is based on a percentage of the original security deposit multiplied by the number of days you were a tenant, divided by 365 days in a year. The Alberta government provides an online calculator to help you calculate the interest due if you want to check your landlord's calculations.
If both parties agree in writing, interest can accrue annually instead of being paid out each year. Landlords can also voluntarily choose a higher rate in the lease agreement, but then they must adhere to that higher rate.
When must the security deposit be returned?
When you terminate your lease and return the keys to the landlord, the law sets clear deadlines for the return of your security deposit. The landlord has only 10 days from the date you vacated the premises to either return the deposit with interest or provide you with a written statement of account.
It is important to understand that “10 days” means that the landlord must begin the process within 10 days—it does not mean that you must receive the check within 10 days, but rather that the landlord must send it (by mail or delivery) within that time.
If the landlord claims that the repair, cleaning, or other costs have not yet been finalized, they can provide you with an estimate on the day you return the keys and then provide a final statement of account with the actual costs within 30 days of the end of the lease.
If you have not received your security deposit and statement of account within a reasonable time after the 10-day deadline, you should immediately write to the landlord (keeping a copy) demanding your money back.
The concept of “normal wear and tear”
Critical to understanding what a landlord can withhold money for is the concept of “normal wear and tear.” Under the Alberta Residential Tenancies Act, normal wear and tear is defined as “deterioration that occurs over time with the use of the premises, even when the premises are reasonably cared for and maintained.”
Landlords CANNOT withhold your security deposit to cover the cost of normal wear and tear. This means they cannot require you to pay for the natural aging of the property that occurs as a result of normal use.
Examples of normal wear and tear for which tenants CANNOT be held responsible include:
- Small holes from small nails (the size of a penny or less) for hanging pictures
- Faded paint on walls
- Faded caulk around the bathtub
- Microscopic cracks in floor tiles
- Noticeable wear and tear on carpeting, even with some light scuffing
- Light rust on plumbing fixtures or light fixtures
- Light scratches on doors
In contrast, landlords MAY withhold money to cover the cost of damage that exceeds normal wear and tear:
- Large holes from nails, shelf hooks, flat screen anchors
- Paint damage that requires repainting (spray, petri, dying spots)
- Broken windows or doors
- Serious scratches, dents, or punctures on walls
- Large tears in carpet or linoleum
- Damage caused by pets, including large claw marks
- Dirty, unkempt rooms that require professional cleaning
- Broken household items in the premises
It is important to note that the length of stay in the premises affects how much wear and tear is considered “normal.” If you have lived in the premises for 5 years, more wear and tear will be considered normal than if you have lived there for 6 months.
When money can be withheld
Landlords can legally withhold part or all of the security deposit only in certain cases specified by law.
Valid reasons for withholding the security deposit include:
- Unpaid rent: If you owe money to the landlord
- Damage to property beyond normal wear and tear: If you damaged the premises in a way that exceeds what is considered normal use
- Inadequate cleaning: If the premises were left very dirty, requiring professional cleaning
- Unreturned keys: If you did not return all the keys to the premises
- Unpaid utilities or other contractually agreed fees: If you owe money for utilities that you were supposed to pay or other agreed expenses
On all other grounds, the landlord cannot legally withhold the security deposit.
It is important to note that the landlord must provide a detailed, itemized list of any deductions, not just a general statement. They must provide documentation, including bills, receipts, and estimates of work, to justify the deductions.
Request for a detailed account statement
When a landlord withholds money from the security deposit, they must provide you with a detailed, itemized statement of account showing each withholding item.
This statement must include:
- The original amount of the security deposit
- Interest calculated on the deposit
- The reason for each deduction and the amount
- The final amount to be returned to you
Landlords CANNOT provide vague statements such as “repair costs” without details. They must indicate if they intend to request funds for cleaning, and they must provide an estimate or invoice from a professional cleaning company.
If the landlord claims that the costs are not yet finalized, they can provide a pro forma statement within 10 days and then provide a final statement with the actual costs within 30 days.
If you have been charged for maintenance, ask for receipts, invoices, and specific explanations for all items. It would also be helpful to ask for photos of the damage that the landlord is claiming, if possible.
The role of inspections when moving
In order for the landlord to have the right to withhold money for damages, they must conduct certain inspections specified by law and document the condition of the premises. The law requires two mandatory written inspections: one at move-in and one at move-out.
The move-in inspection must be conducted within one week before or after you move in. During this inspection, the landlord documents the condition of the premises, including the condition of the walls, floors, appliances, windows, and all other elements. You have the right to be present during this inspection, and it is HIGHLY recommended.
The landlord must provide you with a copy of the move-in inspection report immediately after it is completed. CRITICAL: If you do not receive a copy of the move-in inspection report, the landlord will not be able to legally withhold money for damage during your tenancy because they cannot prove that the damage occurred after you moved in.
The move-out inspection must be conducted within one week of your move-out. You also have the right to be present during this inspection, and it is critical that you are, as they will compare the current condition to the move-in inspection report to determine what damage occurred during your tenancy.
If the landlord does not conduct these inspections or provide you with copies of the reports, they must return ALL of your security deposit, even if there was damage.
What to do if you disagree with the deduction
If your landlord has deducted money from your security deposit that you disagree with, you have rights and can appeal the deduction.
First, try to resolve the issue directly with the landlord. Write them a letter (keeping a copy) stating your position, explaining why you believe the deduction is unfair, and referring to specific inspection reports and provisions of the lease agreement.
If the landlord has not returned your deposit within the specified time or if you cannot resolve the dispute directly, you can file a claim with the RTDRS (Residential Tenancy Dispute Resolution Service). The RTDRS is a specialized service that resolves disputes over security deposits without the need to hire a lawyer.
To file a claim with the RTDRS, you complete a Tenant's Application form and submit it with supporting evidence, including copies of the lease agreement, inspection reports, letters you have sent to the landlord, and any other relevant documents.
The fee to file a claim with RTDRS is $75, but if you can't afford it, you can apply for a fee waiver by providing three months of proof of income (pay stubs or bank statements).
If your landlord has not returned your security deposit at all and has not provided any account information, you can also file a complaint against your landlord with the Service Alberta Contact Centre at 1-877-427-4088, as this is a violation of the Residential Tenancies Act.
Checklist before moving out
To maximize your chances of getting your entire security deposit back, follow this checklist as you prepare to move out:
At least 2-4 weeks before moving out:
- Notify your landlord in writing of your move-out date and your intention to terminate the lease
- Acknowledge receipt of this notice from your landlord
- Start planning for cleaning and repairs
One week before moving out:
- Deep clean all rooms, including the refrigerator, oven, bathroom, and toilet
- Repair any obvious damage that you can handle yourself or hire professional help
- Take utility meter readings and document them (with photos)
- Organize electronics, accessories, and anything else you are leaving behind
Moving-out day:
- Give the premises a final clean
- Make sure all keys are returned to the landlord
- Ask the landlord to conduct a move-out inspection or suggest specific dates
- If possible, be present during the inspection
- Obtain a copy of the move-out inspection report from the landlord
- Provide the landlord with your mailing address
After moving out:
- Document the cleaning (meter readings, photos, cleaning bills)
- Wait for the statement of account from the landlord
- If you do not receive the statement within a reasonable time (15-20 days), write to the landlord
Ensuring that everything is documented will give you an advantage in resolving potential disputes over the security deposit.
Conclusion
The security deposit is an important part of the rental process in Alberta, but it is your money, not the landlord's. By knowing your rights, understanding the difference between normal wear and tear and damage, how to prepare for move-out, and how to challenge unfair deductions, you can protect your financial interests. If your landlord does not comply with security deposit laws, you have recourse through the RTDRS and the courts.