Security Deposit Basics in Alberta
Under the Alberta Residential Tenancies Act, a security deposit (commonly called a damage deposit) is the only deposit a landlord can collect. No last month's rent, no separate pet deposit — just one deposit of up to one month's rent.
How Much Can You Collect?
The maximum is one month's rent. If rent is $1,800/month, the maximum deposit is $1,800. You may collect less, but not more.
Where Must the Deposit Be Held?
Security deposits must be held in a separate trust account. You cannot commingle them with personal or business funds. The tenant is entitled to interest on the deposit, calculated at the prescribed rate (updated annually by the government — currently approximately 2%).
Move-In and Move-Out Inspections Are Mandatory
You must conduct a documented move-in inspection with the tenant present (or after providing 2 written attempts to schedule). The same applies on move-out. Both parties must sign the inspection report. Without a properly completed move-in inspection, you lose the right to claim deductions from the deposit.
Returning the Deposit
You have 10 business days after the tenancy ends to either return the full deposit OR provide a written itemized statement of deductions and return the remainder. If you claim damages, you must have documentation (receipts, photos, inspection reports). If you fail to meet the 10-day deadline, the tenant can claim double the deposit amount.
What Can You Deduct?
You can deduct for: unpaid rent, cleaning beyond normal standards, damage beyond normal wear and tear, and unpaid utilities if the tenant was responsible for them. You cannot deduct for: normal wear and tear (scuffs, minor carpet wear, nail holes from pictures), repainting that was due regardless, or pre-existing damage documented at move-in.