10 Key Facts About Rent and Deposits for PEI Tenants

Prince Edward Island renters have unique rights and responsibilities when it comes to rent and deposit rules. Understanding how the law protects you—and the steps to take when issues arise—can make your rental experience smoother and more secure. Let’s explore 10 must-know facts about rent and deposits for PEI tenants.

Important Information for Tenants on Prince Edward Island

Renting in PEI is governed by the Residential Property Act^[1]. The Island Regulatory and Appeals Commission (IRAC) manages rental disputes and tenancy matters. Visit IRAC’s Rental Property Section for official forms and resources.

1. What Is a Security Deposit?

Landlords in PEI may collect a security deposit, also known as a “damage deposit,” before you move in. By law, this deposit cannot exceed one month’s rent for year-to-year or month-to-month tenancies.

• Deposits must be held in trust by the landlord.
• Landlords cannot ask for additional fees labeled as "pet deposits" or "last month's rent"—the security deposit is the limit.

Understanding how deposits work is essential. For a deeper overview, see Understanding Rental Deposits: What Tenants Need to Know.

2. Getting Your Security Deposit Back

When you move out, your landlord must return your deposit with interest unless they apply to IRAC to keep it because of unpaid rent or damages. If you leave your unit in good condition and pay your rent in full, you should receive your deposit within 10 days of the end of your lease.

You can ensure a smooth return by having a detailed inspection when moving out.

3. Rent Payment Rules

Rent is due on the date specified in your rental agreement, usually the first day of the month. Landlords cannot require post-dated cheques or automatic withdrawals unless you agree. For guidance on payment methods and your rights, check Tenant's Guide to Paying Rent: Rights, Responsibilities, and Tips.

4. What Landlords Must Provide in Writing

• A written rental agreement detailing rent, payment due dates, and included services.
• Receipts for all rent and deposit payments.

It’s your right to request receipts for any amount you pay.

5. Rent Increases: How and When

Landlords in PEI must follow strict rules for rent increases:

• They can raise rent only once every twelve months.
• Written notice must be given using the official Form 10 (Notice of Increase), at least 3 months in advance.

The government may set a maximum allowable increase each year. Check the current guideline on the IRAC website.

6. Official Forms Every Tenant Should Know

• Form 2 (Rental Agreement): Record all rental arrangements in writing for your protection. Download Form 2.
• Form 10 (Notice of Increase): Used by landlords to give proper notice of rent increases. Tenants may dispute through IRAC if the increase seems unfair.
• Form 4 (Application by Tenant): Used to apply to IRAC if your deposit is not returned or if you have other rental concerns. View all official IRAC forms.

7. Interest on Deposits

Landlords must pay interest on security deposits at a rate set by the PEI government. The interest rate is published each year by IRAC. When you receive your deposit back, ensure it includes this interest. To learn how to maximize your return, see How to Get Your Security Deposit Back with Interest When Moving Out.

8. Habitability and Rental Conditions

Landlords must keep your unit safe and in good repair by law. If repairs are needed, notify your landlord in writing. If issues aren’t resolved, you can apply to IRAC for help. For details on PEI tenant rights, see Tenant Rights and Landlord Rights in Prince Edward Island.

9. When Can a Deposit Be Kept?

• Landlords may apply to keep all or part of the deposit to cover unpaid rent or damages.
• They must submit Form 6 (Application by Landlord) to IRAC within 10 days of the tenancy ending.
• The landlord must provide written reasons and evidence if they wish to keep your deposit.

10. Disputing Deposit Issues or Rent Mistakes

You may file an application with IRAC using Form 4 if your deposit isn’t returned or if you feel a rent increase is unlawful. IRAC will review and make a decision.

These 10 facts give you a strong foundation as a PEI tenant. For access to the latest rental listings, Find rental homes across Canada on Houseme—your tool for discovering the right home.

Frequently Asked Questions about Rent and Deposits in PEI

1. Can a landlord in PEI ask for more than one month’s rent as a deposit?
   No. The maximum allowed security deposit is one month’s rent, regardless of the type of unit.
2. Do I get my security deposit back with interest?
   Yes. Unless the landlord is granted permission by IRAC to keep it, your deposit must be returned with interest within 10 days after the tenancy ends.
3. How much notice is required for a rent increase?
   Written notice using Form 10 is required at least 3 months before the new rent starts. You cannot be asked to pay more without this advance notice.
4. What should I do if my landlord won't refund my deposit?
   Complete Form 4 (Application by Tenant) and submit it to IRAC for resolution.
5. Is a written rental agreement required?
   While oral agreements are legal, written agreements (Form 2) are strongly recommended for your protection.

How To: Protect Your Deposit and Handle Rent Changes in PEI

1. How do I check my lease for deposit rules?
   Review your signed Form 2 agreement. It should state the amount and terms of your security deposit in clear language.
2. How do I dispute a rent increase?
   If you believe a rent increase is not justified, submit an application to IRAC with Form 4 within 20 days of receiving notice.
3. How do I get my deposit back?
   After moving out, make sure the property is in good condition. If you don’t receive your deposit and interest within 10 days, file Form 4 with IRAC.
4. How do I find the current interest rate on deposits?
   Visit the IRAC interest rate page for updated information.

Key Takeaways

• Your security deposit in PEI cannot exceed one month’s rent and must be returned with interest after you move out (unless approved by IRAC).
• Rent increases are limited by law and require at least 3 months' notice using official forms.
• For disputes, always use IRAC’s official forms and keep written records at every stage.

Knowing your rights about rent and deposits helps you avoid common problems. For a deep dive into PEI rental laws, visit the Tenant Rights and Landlord Rights in Prince Edward Island page.

Need Help? Resources for Tenants

• Island Regulatory and Appeals Commission (IRAC) – Rental Property
• IRAC Official Rental Forms
• Read the Residential Property Act
• PEI Rental Assistance Program
• For general guidance, dial 211 (PEI) for community services and tenant advocacy resources.

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1. Residential Property Act (PEI)
2. Island Regulatory and Appeals Commission (IRAC)
3. IRAC Rental Property Forms

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