Security deposit disputes are the most common conflict in residential tenancy, and they are almost always decided on documentation rather than on who is right about the damage.
The basics
In Alberta, a security deposit is capped at one month’s rent and must be held in a trust account. It earns interest at a rate set by regulation, and the landlord must account for that interest. The deposit is the tenant’s money held in trust — not a fee, and not the landlord’s to spend.
The governing legislation is the Residential Tenancies Act, and the province publishes plain-language guidance for landlords and tenants. Check both for current requirements rather than relying on what was true a few years ago.
The inspection report is the whole game
A move-in inspection report, completed with the tenant present, signed by both parties, is required. So is a move-out inspection. Those two documents, plus dated photographs, are what a dispute turns on.
Practical points that make the difference:
- Be specific. “Kitchen — scuff on lower cabinet door, left of sink” beats “some marks”.
- Photograph everything, including the things that are fine. The photograph that proves the carpet was clean at move-in is the one you will want.
- Give the tenant a copy immediately and keep proof you did.
- Use the same form and the same order at move-out so the two are directly comparable.
Wear and tear versus damage
A landlord may deduct for damage, unpaid rent and cleaning beyond reasonable, but not for normal wear and tear. Carpet has a finite life; traffic wear across four years is wear. A burn or a tear is damage. Faded paint is wear. A hole is damage.
Where something is genuinely damaged but was already partly worn, the fair deduction reflects the remaining useful life rather than the full replacement cost. Claiming a full new carpet against a ten-year-old one tends to fail.
Returning it on time
The Act sets a deadline for returning the deposit, or providing a written statement of account for any deductions with the balance. Missing that deadline weakens the landlord’s position regardless of the merits of the deductions.
The statement of account should itemise each deduction with an amount and, ideally, attach the invoice or quote. A round number with no breakdown is the fastest route to a dispute.
If you disagree
Alberta’s Residential Tenancy Dispute Resolution Service handles most deposit disputes, and it is designed to be used without a lawyer. Bring the inspection reports, the photographs, the tenancy agreement, the statement of account and the invoices.
The short version
Do the inspection properly, photograph it, sign it, share it, and repeat the process at the end. Landlords who do that rarely lose a deposit dispute; landlords who do not, rarely win one.
This article is general information, not legal advice.
Talk it through with Rimrock
Rimrock Sales & Leasing works with owners, investors and tenants across Calgary, Edmonton and Lethbridge. Get in touch or call 403-910-4611.