In a recent case from British Columbia, a tenant who was subject to two eviction attempts for failing to pay rent was nonetheless able to obtain a $700 award against her landlord for withholding her security deposit.
In another case, landlords in British Columbia were hit with an $800 monetary order for failing to return a tenant’s security deposit within the time 
prescribed by law. The landlords testified that they were not aware of the rules. As a result, they were subject to a penalty of double the deposit, plus costs.
Security deposit laws vary from province to province. For instance, in British Columbia, a landlord who wishes to take deductions from the deposit for damage must apply for the right. Alberta landlords have more leeway to take deductions without court approval, so long as they have completed the mandatory property condition reports. Ontario landlords currently are not allowed to collect a damage deposit from incoming tenants, and must take legal action in any case to pursue a tenant who causes damage.
These same laws limit the amount that can be designated for a deposit, and dictate whether the funds must be placed in an interest-bearing or trust account.
While security deposit practices vary, there are two common themes:
1) A landlord’s rights will be adversely affected if they don’t know the law; and,
2) Landlords must take steps to prove the validity of any deductions they take from a tenant’s security deposit.
The rules regarding deposits are largely available online, by searching for the province’s Residential Tenancies Act. Information is also available from the local branches of the appropriate tenancy board, or by consulting with a legal expert.
Documentation will be the difference between winning and losing a dispute over security deposit deductions. Bolster your chances of success by:
Completing a move-in inspection report that profiles any damage or defects present at the time the tenant moves in. Photos or videos made at the time can be convincing evidence regarding the condition of the property.
If possible, walk through the property with the tenant when they move out. Have them sign a move-out condition form. Discuss any disagreements over repairs and who is liable. Sometimes, if the tenant is confronted with the obvious damage, they may decide not to fight the deductions.
Detail any damage for which deductions are being claimed in the same manner as the move-in report. Understand that some judges are skeptical of the amounts that a landlord is claiming.
Preserve your credibility by not adding items of normal wear and tear to your claim.
Keep the accounting as precise as possible, and support each amount with a corresponding receipt.
This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.
