What Can Landlords Deduct From a Security Deposit?
Both landlords and tenants need to have a clear understanding of their rights and obligations regarding security deposits. The question of what can be deducted from a security deposit often leads to disagreements and landlord and tenant disputes, making it crucial for both parties to be well-informed.
Whether you're a landlord looking to recover costs for damages or a tenant seeking the return of your deposit, understanding the rules surrounding security deposits is crucial. In this article, we’ll walk through the common deductions landlords can make, as well as the protections tenants have to make sure they’re treated fairly when it comes to their security deposits.
The Ins and Outs of Security Deposits in Ontario
In Ontario, the Residential Tenancies Act (RTA) governs the relationship between landlords and tenants, including the rules surrounding security deposits. The RTA specifies that landlords are not allowed to charge a deposit for damages or rent in advance. The only allowable deposit is a rent deposit, which must not exceed one month’s rent.
Security deposits are typically used by landlords to cover any potential damage to the rental property caused by the tenant. Once the tenant moves out, the landlord has a specified period to return the deposit, minus any lawful deductions. Landlords must be careful when determining what they can deduct from the deposit, as making improper deductions can lead to disputes.
Common Deductions from a Security Deposit
There are several reasons a landlord may wish to deduct from a tenant’s security deposit. However, these deductions need to be reasonable, and the landlord must provide a clear explanation of the charges. Let’s take a look at some of the most common situations where landlords may deduct from the deposit:
Damage to the Property
One of the primary reasons landlords may withhold part of the security deposit is to cover damages to the property that go beyond normal wear and tear, or the inevitable deterioration of the property due to age or regular use. If a tenant causes damage to the property that requires repairs, the landlord is entitled to deduct the cost of these repairs.
Examples of damage that may warrant deductions include:
Holes in the walls: If a tenant leaves large holes from nails or screws or damages the walls in any other way, the landlord may need to deduct the cost of repairing those damages.
Broken appliances: If an appliance provided by the landlord is broken due to misuse or negligence, the cost of repairing or replacing the appliance may be deducted.
Stains or burns on carpets: If a tenant causes stains or burns that cannot be cleaned, the landlord may deduct the cost of replacing the carpet.
Water damage: If there’s significant water damage caused by tenant negligence, such as leaving windows open during a storm, a deduction may be necessary to repair the damage.
It’s essential that landlords provide evidence of the damage, such as photographs or repair invoices, to justify these deductions.
Unpaid Rent
If a tenant fails to pay their rent for the final month of the lease, the landlord may deduct the amount of unpaid rent from the security deposit. In Ontario, tenants are required to pay rent on time, and landlords have the right to take action if rent is unpaid.
For example, if a tenant has an outstanding balance at the end of their tenancy, the landlord can deduct the remaining rent owed from the deposit. However, it’s important to note that landlords can only deduct for unpaid rent for the period during which the tenant was occupying the property. Once the tenant moves out, any further rent is the responsibility of the new tenant.
Cleaning Costs
Landlords are generally not allowed to deduct cleaning fees from the deposit unless the tenant leaves the property excessively dirty. Normal cleaning, such as vacuuming or dusting, is part of regular maintenance and cannot be charged to the tenant. However, if the tenant leaves the property in an unsanitary or unclean condition, the landlord may deduct cleaning fees from the deposit.
Common examples of situations where a landlord might deduct cleaning costs include:
Uncleaned appliances: If the tenant leaves the oven, fridge, or microwave in poor condition, a landlord may deduct the cost of cleaning these items.
Excessive dirt or debris: If the floors, carpets, or other surfaces are covered in excessive dirt or debris that requires professional cleaning, the cost may be deducted.
Leftover garbage: If the tenant leaves trash or items behind in the rental unit, the landlord may charge a disposal fee.
While landlords can charge for cleaning above and beyond normal wear, they cannot charge for routine cleaning that would typically occur between tenants.
Unapproved Alterations
Sometimes tenants may make alterations to the rental property without the landlord’s permission. These alterations can include painting walls, changing light fixtures, or installing new appliances. If these changes are permanent and the landlord has not approved them, they may need to be restored to the original condition when the tenant moves out.
If a tenant has made unauthorized changes, the landlord is allowed to deduct the cost of returning the property to its original condition. However, the landlord must provide proof of the alterations and their costs to justify such deductions.
Examples of unapproved alterations that may lead to deductions include:
Painting or wall modifications: If the tenant painted walls or made changes to the walls (e.g., removing wallpaper), the landlord can deduct the cost of repainting the property to its original state.
Improper fixture installations: If a tenant installs new fixtures, such as lighting or shelving, without consent, the cost of removing the fixtures and repairing the damage may be deducted.
Damaged floors: If a tenant installs flooring that damages the original flooring, the landlord may deduct the cost of repairs or replacement.
Damage to Common Areas
In multi-unit buildings, landlords may also deduct from a tenant’s security deposit if the tenant has caused damage to common areas, such as hallways or shared laundry facilities. If a tenant causes damage to these areas, such as by breaking windows or leaving trash in common spaces, the landlord may hold the tenant financially responsible for repairing the damage.
For example:
Broken windows in hallways: If a tenant is responsible for breaking a window in a hallway or shared space, the cost of replacing the window can be deducted.
Vandalism or graffiti: If the tenant is responsible for vandalism or graffiti in common areas, the cost of removing or repairing the damage may be deducted from their deposit.
Landlords should document the condition of common areas at the start of the tenancy to have proof of any damages that occur during the lease term.
What Landlords Cannot Deduct From a Security Deposit
While landlords have the right to make certain deductions from a tenant’s security deposit, there are some things they cannot deduct. Understanding these restrictions is essential to avoid conflicts and disputes.
Normal wear and tear: Landlords cannot charge tenants for normal wear and tear, such as minor scuffs on the walls or worn carpets. These are considered part of regular use of the property.
General maintenance: Costs for routine maintenance tasks, such as changing light bulbs, fixing a leaky faucet, or servicing an HVAC system, cannot be deducted from a tenant’s deposit.
Unpaid utility bills: A landlord cannot deduct money from the deposit for unpaid utility bills, such as electricity or water. These are separate from the rent and should be handled by the tenant directly with the utility companies.
Upgrades or improvements: Landlords cannot charge a tenant for upgrades or improvements that go beyond regular maintenance, such as replacing a perfectly functional refrigerator with a new one.
The Importance of Documentation
For both landlords and tenants, proper documentation is key. Landlords should take photos or videos of the property at the start and end of the tenancy to clearly show its condition. Likewise, tenants should keep copies of any communications with the landlord and document the condition of the property upon move-out.
If a dispute arises over the deposit, both parties can use this documentation to resolve the issue. In some cases, it may be necessary to take the dispute to the Ontario Landlord and Tenant Board, where an impartial adjudicator will make a ruling.
Contact Us Today
If you're involved in a landlord and tenant dispute in Ontario, it's important to understand your rights and obligations regarding security deposits. Our team is ready to assist with any issues related to rental agreements and security deposits. If you have questions or need legal advice, don't hesitate to reach out to Morris Legal Services in North York, Ontario today.
