Application Fees & Security Deposits
A security deposit, or “damage deposit” is money, other than rent, that you give your landlord at the beginning of a tenancy. It is to compensate your landlord if you cause damages or do not pay rent.
A landlord cannot ask for more than half a month’s rent when you sign a lease, and it is illegal to ask for any money before the lease is signed. This includes application fees, key fees, pet deposits, first and last month’s rent, or several month’s rent at a time.
More on security deposits, including the return of a security deposit, can be found under Returning Security Deposits.
If you paid an illegal security deposit or application fee and would like it returned, see Resources for a template demand letter.
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Many landlords ask for application or other fees before renting, especially to people who don’t know their rights or would otherwise have difficulty finding a rental. Because of the current housing crisis, tenants feel obligated to pay these in order to secure housing.
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Do not send money to a landlord (for any reason) before seeing the place and meeting the landlord in person. Do not send money to someone unless you have signed a lease with them and you have their contact information.
Make sure you communicate with the landlord in writing and document any requests for money or money sent to the landlord.
Do not pay anything in cash! Even if you get a receipt, it’s very hard to prove cash payments.
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If money is provided to a landlord but no lease is signed and the prospective tenants do not move in, the landlord may not keep that money. Even though no lease was signed, the landlord-tenant relationship is deemed to exist. (Walker v. Rouvalis, 2007 NSSC 137)
Landlords cannot claim damages for failure to sign a lease. Any illegal application fees charged must be returned to the applicant where, for whatever reason, they fail to sign a lease. (Musgrave v. Templeton Properties, 2016 NSSM 6)
When a landlord wrongfully takes a sum of money and withholds it (like an application fee, or extra rent) they must return it with 4% interest. (Zhai v Anwar of Canada Ltd., 2018 NSSM 30)
