Landlords in Saskatchewan have a right to ask their tenants for a security deposit. A security deposit is a refundable payment that helps landlords cushion themselves against potential financial damages resulting from a tenant’s negligence.
Here are some common reasons landlords require a security deposit from their tenants:
To mitigate against financial losses emanating from missed rent payments. Nonpayment of rent by a tenant is a serious violation of the lease agreement. Yet, it continues to be among the top lease violations.
To help pay for careless property damage. A tenant becomes liable for any damage exceeding normal wear and tear.
To cover financial damage resulting from an early termination of the lease, no matter the reason.
To cover unpaid utilities. When a tenant signs the lease, some utilities are transferred to their name. And, when they move out, they are required to have cleared them. If they don’t, a landlord has a right to make the appropriate deductions.
With that in mind, let’s take a look at the basic security deposit laws in SK by providing answers to commonly asked questions.
How Much can a Landlord Ask as Security Deposit in Saskatchewan?
In Saskatchewan, landlords can ask for a security deposit that’s equivalent to one month’s rent. So, for instance, if the rent per month is $2,000, then you can ask a maximum amount of $2,000.
Also, the law permits tenants to pay the deposit in two installments. So, you can ask your tenant to pay 50% of the deposit when moving in and the rest in two installments spread over two months.
Is a Guarantee Letter from the Saskatchewan Assistance Plan (SAP) Considered a Security Deposit?
Yes! A letter from social services is deemed as a security deposit so long as the tenant continues receiving it and doesn’t move out.
As a landlord, you cannot refuse acceptance of the security deposit guarantee. You can, however, require your tenant to foot the difference between the deposit required and that provided by the social services.
That said, if the tenant no longer receives the guarantee from social services, then you can require the tenant to pay the full amount. In such a case, you must provide them a one month’s notice to do so.
Can a Saskatchewan Landlord Charge Separate Deposits?
No, they cannot! The total amount of deposits must not exceed the rent of one month. So, if you charge a pet deposit or a key deposit, for instance, make sure it’s part of the security deposit.
Can a Landlord Terminate a Tenant or Refuse Renewing a Lease for the Sole Purpose of Increasing the Rent?
No, it is illegal to do so in Saskatchewan.
Can the Tenant use the Security Deposit as Last Month’s Rent?
They can so long as there is a written agreement with the landlord. Otherwise, a tenant cannot use their security deposit to pay for the last month’s rent.
How Must a Landlord Store the Tenant’s Security Deposit?
A landlord can deposit it into a financial institution such as a bank or credit union. It belongs to the tenant and the landlord must hold it in trust for them. If the tenant stays in the same property for at least five years, then they are entitled to receive interest on their security deposit.
The interest payable is calculated as per the Act.
When Should the Landlord Return the Security Deposit?
As a landlord in Saskatchewan, you have seven business days (not including holidays and weekends) to return the tenant’s security deposit after the tenant moves out. If you claim part or all of the deposit, then you must provide your tenants with a written notice of the same within 7 days.
If you send the notice via mail, then three days must be allowed for the mail to get to the tenant before the expiry of the 7 days. As for deliveries that are done electronically, they are deemed delivered on the first business day after they are sent.
To avoid issues with the delivery, make sure to send a fax or an email to the Office of Residential Tenancies as well. You can even choose to deliver it personally at their offices.
The ORT will then schedule a hearing and send a notification to both parties. Then, within ten days upon being notified by the ORT, you’ll be required to pay the deposit, as well as file a list of damages with them.
What Can a Landlord Claim on a Tenant’s Security Deposit?
Landlords can claim part or all of a tenant’s security deposit due to any of the following reasons:
The tenant moved out without paying all rent due under the lease agreement
The tenant failed to clear your utility bills upon moving out
The tenant caused negligent or careless property damage
How to Avoid Conflicts when Returning a Tenant’s Security Deposit
Prior to the tenant move in, both the tenant and landlord should document the property’s condition.
Both parties should also do a “move-out” inspection using the “move in” inspection as a reference.
Once the “move out” inspection is complete, you should discuss the damages with the tenant and negotiate an agreement regarding the costs of damage and what amount is to be deducted from the tenant’s security deposit.
Disclaimer: This blog isn’t a substitute for legal advice from a professional. If you need more help, please consider hiring an attorney or a reputable property management company. GoodDoors Property Management is a reliable and professional property management company operating in Regina, Saskatchewan.