Module 8: Handling Deposits – LandlordPass

Module 8 of 16

Security & Pet Damage Deposits in BC

Learn the strict rules for security and pet deposits: 50% caps, RTB-27 inspection requirements, 15-day return protocol, useful life depreciation, and interest calculations. Includes damage deduction template and protocol checklist.

Module 8: Handling Deposits – LandlordPass

Deposits Are Not Your Money

This is where most landlords get the law wrong. A deposit is money held for the tenant — not money the landlord "owns." Until the tenant gives written consent for a deduction or the RTB issues an order, the full deposit (plus interest) belongs to the tenant. Treating it otherwise is how double-deposit penalties happen.

The rules are strict and deadline-driven. The Residential Tenancy Act sets maximum amounts, return timelines, and inspection requirements. Miss any of these and you can be ordered to pay back twice the deposit — even if the tenant caused real damage.

Key Point

The law rewards landlords who follow the process, not landlords who feel "morally right." Procedure is the protection. RTB-27 inspections + evidence + 15-day action + interest calculation = your defence. (Source: RTA s. 38, s. 36, s. 24.)

Collecting Deposits: The 50% Rule

Security Deposit

The maximum security deposit is 50% of one month's rent. If rent is $2,400, the maximum deposit is $1,200. One deposit per tenancy — not per roommate. The amount is fixed at the start of the tenancy. It does not increase when rent increases.

Pet Damage Deposit

If you allow a pet, you can collect a separate pet damage deposit — also capped at 50% of one month's rent. Combined maximum (security + pet) is one full month's rent. If a tenant gets a pet mid-tenancy with your permission, you can require the pet deposit at that time. The pet deposit is for pet damage only — do not treat it as rent insurance.

Caution

Certified guide dogs and service dogs are not "pets" for deposit purposes. Do not charge a pet deposit for them. Doing so can result in a human rights complaint. (Source: Guide Dog and Service Dog Act; BC Human Rights Code.)

Key and Fob Deposits

You cannot charge a deposit for the key or fob that is the tenant's only way into the unit. For additional keys or fobs requested by the tenant, a refundable deposit is allowed — limited to the actual replacement cost. Return it immediately when the extra key/fob is returned.

RTB-27 Condition Inspections: No Report, No Claim

Your right to claim damage against the deposit depends on condition inspections. If you skip the move-in inspection, you lose the ability to prove what damage existed before the tenancy. If you skip the move-out inspection, you lose the ability to prove what damage occurred during the tenancy. The RTB expects a side-by-side comparison — move-in condition vs. move-out condition — documented on the RTB-27 form.

☑ 15-Day Deposit Return Protocol

When the tenancy ends, follow these steps in order. The 15-day clock starts on the later of: tenancy end date OR date you receive the tenant's forwarding address in writing.

Complete move-out inspection with tenantUse the RTB-27 form. Both parties sign. Take photos at the same angles as move-in.

Record the date you receive the forwarding addressThis starts the 15-day clock. Write it down. Keep the written notice.

Calculate deposit interest using the RTB calculatorUse the official tool. 2025 rate: 0.95%. Record the amount.

Compare move-in vs. move-out RTB-27 reportsIdentify any damage beyond normal wear and tear. Use photos to document.

Get repair quotes or invoices for any damageUse contractor quotes. Apply useful-life depreciation (Policy Guideline 40).

DECIDE: Return full deposit, get written consent, or file RTB claimYou must do ONE of these within 15 days. Doing nothing = double deposit risk.

Send deposit + interest to the tenant's forwarding addressIf returning full deposit, send a cheque or e-transfer with a brief breakdown.

File all documents in the tenancy folderRTB-27s, photos, receipts, communication, and proof of return. Keep for 2 years minimum.

Deposit Interest Calculator

Interest must be calculated on the deposit before returning it. The rate changes annually — for 2025, it is 0.95%. Use the reference table below to estimate, or for official calculations, visit the RTB Deposit Interest Calculator.

💰 Deposit Interest — Quick Reference (2025 Rate: 0.95%)

Find your deposit amount and holding period. Interest = Deposit x Rate x (Days / 365).

Deposit Amount	6 months	12 months	18 months	24 months
$800	$3.79	$7.60	$11.40	$15.20
$1,000	$4.74	$9.50	$14.25	$19.00
$1,200	$5.69	$11.40	$17.10	$22.80
$1,500	$7.12	$14.25	$21.37	$28.50
$2,400 (max at $2,400 rent)	$11.38	$22.80	$34.19	$45.60

Formula: Interest = Deposit x 0.0095 x (Days Held / 365). For exact amounts or multi-year tenancies, use the official RTB calculator. The rate changes annually.

Useful Life Depreciation — You Cannot Claim "New for Old"

When you claim damage against a deposit, the RTB does not award full replacement cost for used items. They use "useful life" depreciation — meaning your claim is limited to the remaining value of the item, not what a brand-new replacement costs. This is based on RTB Policy Guideline 40.

Item	Useful Life	What This Means
Interior paint	4 years	If paint is 3 years old, your claim is limited to roughly 25% of repainting cost.
Carpet	10 years	8-year-old carpet? Claim is ~20% of replacement. Not the full $2,000.
Vinyl / laminate flooring	15 years	Newer flooring = higher claim. Older = lower.
Stove / Fridge	15 years	Keep purchase receipts to prove age.
Dishwasher	10 years	Replacement receipt needed for age verification.
Window blinds	8 years	Cosmetic wear is normal; damage from misuse is claimable.
Countertops	20 years	Scratches from use = wear. Burns and gouges = damage.
Bathroom fixtures	20 years	Cracked toilet or broken faucet from misuse is claimable.

Key Point

Example: Carpet is 8 years old (useful life 10 years). Replacement cost is $2,000. Remaining life is 2 out of 10 years = 20%. A reasonable maximum claim is about $400 — not $2,000. Always calculate depreciation before presenting a claim. (Source: RTB Policy Guideline 40.)

Damage Deduction Statement Builder

Select each damage item found at move-out, fill in the tenancy details, and click Generate Statement to produce a copy-ready deduction statement. Add the actual dollar amounts from contractor quotes before sending to the tenant.

Damage Item	Typical Cost	Unit
Cleaning (professional)	$40	per hour
Light bulb replacement	$5	each
Wall patch — small hole	$75	per patch
Wall repair — deliberate/excess damage	$200	per wall
Room repaint — beyond wear	$350	per room
Carpet steam cleaning	$150	per unit
Carpet repair/patch	$300	per room
Blind replacement	$45	each
Door repair	$150	each
Appliance repair — service call	$175	per call
Lock re-key	$125	per lock
Toilet seat replacement	$35	each
Smoke odour remediation	$500+	per unit
Junk/garbage removal	$200	per load

Damage Deduction Statement Builder

Fill in property details, select each damage item found at move-out, then click Generate Statement.

Property Details

Tenant Name(s)

Property Address

Move-Out Date

Inspection Date

Security Deposit Held

Pet Damage Deposit Held

Accrued Interest

Select Damage Items Found at Move-Out

Professional Cleaning Required — Unit was left in an unclean condition requiring professional cleaning beyond normal move-out tidying.

Light Bulb Replacement — One or more light bulbs were missing or broken at move-out and require replacement.

Wall Patch — Small Holes — Walls have holes beyond normal small nail holes for pictures, requiring patching and finishing.

Wall Repair — Deliberate or Excessive Damage — Walls sustained significant damage beyond normal wear, requiring substantial drywall repair or replacement.

Room Repaint — Beyond Normal Wear — Walls or ceilings require repainting due to damage, staining, or markings beyond normal wear and tear. Depreciation applied per paint useful life (4 years) per RTB Policy Guideline 40.

Carpet Steam Cleaning — Carpets were left in a soiled or heavily stained condition requiring professional steam cleaning.

Carpet Repair or Replacement — Carpet was damaged beyond normal wear, requiring repair or replacement. Depreciation applied per carpet useful life (10 years) per RTB Policy Guideline 40.

Blind Replacement — One or more window blinds were broken, missing, or damaged beyond normal wear and require replacement. Depreciation applied per blind useful life (8 years) per RTB Policy Guideline 40.

Door Repair — One or more interior or exterior doors, frames, or hardware were damaged from misuse and require repair or replacement.

Appliance Repair — Service Call — One or more appliances were damaged due to tenant misuse and require a professional service call for repair.

Lock Re-Key — Keys were not fully returned at move-out, requiring the locks to be re-keyed to maintain building security.

Toilet Seat Replacement — Toilet seat was cracked or damaged beyond normal wear and requires replacement.

Smoke / Cannabis Odour Remediation — Unit requires specialized odour remediation treatment due to smoking inside the unit in violation of the tenancy agreement.

Junk / Garbage Removal — Tenant left personal belongings, furniture, or garbage on the property at move-out, requiring disposal at the landlord's cost.

Damage Deduction Statement — Copy-Paste Template

SELECT ALL → COPY

DEPOSIT DEDUCTION STATEMENT =========================== Tenant Name(s): ___________________________________ Property Address: ___________________________________ Move-Out Date: ____________ Inspection Date: ____________ DEPOSITS HELD: Security Deposit: $____________ Pet Damage Deposit: $____________ Accrued Interest: $____________ TOTAL HELD: $____________ ITEMIZED DEDUCTIONS: # | Description | Claim Amount --|--------------------------------|------------- 1 | ______________________________ | $____________ 2 | ______________________________ | $____________ 3 | ______________________________ | $____________ TOTAL DEDUCTIONS: $____________ BALANCE TO RETURN: $____________ SUPPORTING DOCUMENTS ATTACHED: [ ] Move-in RTB-27 Condition Report + photos [ ] Move-out RTB-27 Condition Report + photos [ ] Contractor quotes or invoices for each item [ ] Useful-life depreciation calculations (PG 40) CONSENT / NEXT STEPS: [ ] Tenant consents to deductions (signature below) [ ] Landlord filing for RTB dispute resolution [ ] Full deposit + interest returned — no deductions Tenant Signature: ___________________ Date: ___________ Landlord Signature: __________________ Date: ___________ --- Normal wear and tear is not claimable. All claims use useful-life depreciation per RTB Policy Guideline 40. Source: RTA s. 24, s. 36, s. 38.

Caution

Normal wear and tear is not claimable. Faded paint, minor scuffs on floors, and small nail holes from picture hanging are expected after years of normal use. The RTB only awards deductions for damage beyond reasonable wear. Always apply useful-life depreciation to your claim. (Source: RTA s. 24(1); Policy Guideline 40.)

Key Takeaways

What to Remember from This Module

Security deposit and pet deposit are each capped at 50% of one month's rent. Combined maximum is one full month's rent. These amounts do not increase with rent increases.
You have 15 days from the later of tenancy end or receiving the forwarding address to return the deposit, get written consent for deductions, or file for dispute resolution. Miss this and you risk paying double.
No RTB-27 move-in and move-out inspections = no ability to prove damage = no valid deposit claim. Always complete both inspections with photos.
You cannot claim "new for old." Use useful-life depreciation (Policy Guideline 40) to calculate the remaining value of damaged items before presenting your claim.
Interest on deposits must be calculated and returned with the deposit. The 2025 rate is 0.95%. Use the RTB's official calculator for accuracy.

Action Checklist

Apply What You Learned

Bookmark the RTB Deposit Interest Calculator. Use it every time you return a deposit to calculate the exact interest owed. Download the RTB-27 Condition Inspection form. Complete one at every move-in and move-out — no exceptions. Print the Useful Life table from this module and keep it in your tenancy file. Use it whenever calculating a damage deduction. Run through the 15-Day Protocol Checklist above for your next move-out. Follow every step in order. Use the Damage Deduction Statement Builder above for your next real move-out to generate a professional, itemized statement.

Common Questions

Frequently Asked Questions

No. The security deposit is capped at 50% of one month's rent. If rent is $2,400, the maximum deposit is $1,200. (RTA s. 19.)

The tenant can apply for dispute resolution and you may be ordered to pay double the deposit — even if there was real damage. The 15-day deadline is strict. (RTA s. 38.)

No. Certified guide dogs and service dogs are not "pets" for deposit purposes. Charging a pet deposit for a service dog can result in a human rights complaint. (Guide Dog and Service Dog Act.)

Usually no. Use useful-life depreciation (Policy Guideline 40). If the carpet is 8 years old with a 10-year useful life and replacement costs $2,000, your maximum claim is roughly $400 (20% remaining life).

Your ability to claim damage against the deposit can be extinguished. Without a move-in baseline, you cannot prove what condition the unit was in before the tenancy. Always do the RTB-27 at move-in. (RTA s. 23, s. 36.)

You can apply for dispute resolution to seek additional compensation beyond the deposit amount. Bring all evidence — RTB-27 reports, photos, invoices, and useful-life calculations.

Normal aging from reasonable use: faded paint, minor scuffs on floors, small nail holes from pictures, light carpet wear in high-traffic areas. The RTB only awards deductions for damage beyond normal wear.

0.95% for 2025. Use the official RTB Deposit Interest Calculator for exact amounts. The rate is published annually by the BC government.

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