Security Deposits in Newfoundland and Labrador: Landlord Guide

Newfoundland and Labrador caps the deposit and puts strict duties on how you hold and return it. The rules are in section 14 of the Residential Tenancies Act, 2018.

• The maximum is 3/4 of one month's rent for a month-to-month or fixed term tenancy, and 2 weeks' rent for a week-to-week tenancy.
• You must give a written receipt, put the money in an interest-bearing account in the province within 2 banking days, and pay the tenant interest.
• You must return the deposit within 10 days after the tenant vacates, unless you have a claim against it.
• You can keep money only by written agreement with the tenant or by applying to the Residential Tenancies Office. You cannot simply decide.

Tenants see the same rules from their side in the tenant guide to security deposits in Newfoundland and Labrador.

On $1,200 monthly rent, the most you can demand is $900.

There is no separate pet deposit. The Residential Tenancies Office guide says the Act does not allow separate deposits for items such as pets, so the 3/4 cap is the total. Any money or value you receive from a tenant beyond the rent counts as a security deposit, so it falls under the same cap. If you take more than the cap, the tenant may deduct the overpayment from rent or recover it with interest.

A holding deposit paid before any rental agreement exists is not regulated by the Act. If you are still choosing a tenant, see screening tenants legally in Newfoundland and Labrador. Landlords also ask how much a landlord can ask for as a deposit.

Do these things in order when you receive the money.

1. Give the tenant a written receipt.
2. Within 2 banking days, deposit the money in an interest-bearing account in the province.
3. If you own 3 or more units, use a trust account.
4. Keep the money apart from your own funds. The deposit is held in trust and is not your asset.
5. Track the interest. You owe it on the full amount for the whole time you hold the deposit.

Interest is set by regulation. Each calendar year's rate is the average Bank of Canada rate for the 12 months ending November 30 of the year before, minus 4 percent, rounded up to the next whole number. Interest is simple, not compounded. The Residential Tenancies Division has applied 1 percent for 2025 and 0 percent for 2026. The government publishes an online deposit calculator, so check it for the current rate before you pay out.

If you sell the building, the new owner becomes responsible for the deposit and must promptly give the tenant written notice of the deposit and interest held.

The clock starts when the tenant vacates. Follow this sequence.

1. Inspect the unit and list what you believe the tenant owes, such as unpaid rent or damage.
2. If you have no claim, return the whole deposit with interest within 10 days after the tenant vacates.
3. If you have a claim, either sign a written agreement with the tenant about how the deposit is divided, or apply to the director of the Residential Tenancies Office with an Application for Dispute Resolution.
4. If the tenant applies first, you have 10 days from being served with their application to file your own.
5. Pay the $20 filing fee on your application.

The Act measures the 10 days from the date the tenant vacates. The Office's guide words it as after the agreement ends, so use the date the tenant actually moves out and act early.

Both sides have a long window to apply. Any application about the tenancy must be made within one year after the rental agreement ends.

The Act does not list allowed deductions. You may claim only what the tenant agrees to in writing or the director decides. In practice, the Residential Tenancies Division applies a deposit against unpaid rent and other money owed, and against damage the tenant or their guests caused.

• Damage and cleaning. The tenant must keep the unit clean and repair damage caused by a wilful or negligent act of the tenant or anyone they let in.
• Normal wear and tear. Not the tenant's responsibility. The adjudicator also depreciates the value of damaged items by age, so a claim is not for full replacement cost on an old item.
• Locks. You cannot charge for replacing locks unless the tenant or their guests damaged them. Changing locks for the next tenant is your own cost of business.
• Your own labour. If you claim for it, the policy allows the provincial minimum wage plus $8.00 an hour.

Evidence decides these claims. Move-in and move-out condition reports are not required by law, but the Office recommends them and adjudicators rely on them, along with time-stamped photos. See condition reports in Newfoundland and Labrador for how they work. Your lease cannot include a term that lets you keep the deposit, because that term is not enforceable.

• You miss the 10 days. If the tenant applied and you do not file within 10 days of being served, you lose any claim against the deposit. The director can order it returned without a hearing. You can still apply for other money, such as damages, but not against the deposit.
• You take too much. The tenant can deduct the overpayment from rent or recover it with interest.
• You forget interest. It is part of the deposit for the return rules, so returning only the original amount is short.
• You keep belongings or change locks to collect. You may not keep or sell a tenant's belongings to cover rent or any other debt.

The Act has no double-deposit penalty. Breaking the Act is still an offence, with fines up to $3,000 for an individual and $10,000 for a corporation, decided by a court. For a larger claim after the deposit is used, you can ask the Office for compensation within the one year limit. If unpaid rent is the problem, the landlord guide to unpaid rent in Newfoundland and Labrador covers the notice. Read when a landlord can keep a security deposit for the short version. This guide explains the rules in general terms; for a specific case, ask the tribunal or a licensed legal professional.