A landlord may request that a tenant pay a security deposit at the beginning of a tenancy. The security deposit is intended to compensate a landlord for:

• damage a tenant does to a suite beyond normal wear and tear,
• any unpaid rent or bills, and
• any costs to the landlord if the tenant vacates without proper notice.

A security deposit cannot be more than half a month's rent and a landlord cannot ask for an extra deposit if the rent is increased.

At the end of a tenancy, a landlord must return a tenant's security deposit with interest, minus any agreed upon deductions for:

• unpaid rent or bills,
• cleaning costs, and
• damage to a suite by a tenant or a guest of a tenant.

This agreement must be in writing.

Security deposit interest is calculated based on an interest rate set at the beginning of each year. Interest is compounded on the anniversary of the date the deposit was received by the landlord.

You can use the Deposit Interest Calculator to calculate the interest on security deposits.