Damage Deposit Rules for Tenants in Prince Edward Island

Are you a tenant in Prince Edward Island wondering if your landlord can ask for a damage deposit? Understanding your rights and responsibilities regarding deposits is essential for a stress-free rental experience. This guide explains PEI’s rules for damage deposits, how they work, and what you should expect from your landlord.

Who Regulates Damage Deposits in Prince Edward Island?

In PEI, landlord-tenant relationships are governed by the Residential Rental Property Act. The Island Regulatory and Appeals Commission (IRAC) – Residential Property Section oversees all tenancy matters, including security (damage) deposits.^[1]

Can a Landlord Ask for a Damage Deposit?

Yes, landlords in Prince Edward Island are allowed to request a damage deposit—often called a "security deposit"—from tenants. However, there are strict rules landlords must follow when collecting, holding, and returning this money.

• Maximum amount: The deposit can be no more than one month's rent. Your landlord cannot ask for a higher amount, or for additional deposits (such as a pet deposit), unless specifically allowed by law.
• When it’s due: The damage deposit is usually paid when you sign your lease or rental agreement.
• Where it goes: The landlord must deposit this money in a trust account, kept separate from their own funds.

For more details on how deposits work in general, see Understanding Rental Deposits: What Tenants Need to Know.

Official Forms for Damage Deposits

IRAC requires both landlords and tenants to use official forms for the management and return of security deposits:

• Form 5 – Application for Return of Security Deposit: Used by a tenant if their landlord does not return the deposit after they move out. Fill out this form and submit it to IRAC to start the process for reclaiming your money. Download Form 5.

Tenant scenario: If you leave your unit and your landlord hasn't returned your deposit within 10 days, you can fill out Form 5 and submit it to IRAC either by mail, email, or in person. Attach evidence (such as move-out inspection photos or your lease).

Legal Rules for Deposit Refunds

Landlords must return your damage deposit (with interest) within 10 days of your tenancy ending, unless they have a valid claim for damages beyond normal wear and tear. If the landlord wants to keep any portion of the deposit, they must provide written reasons and documentation.

• You are entitled to interest on your deposit at a rate set by IRAC each year.
• Normal maintenance and wear (like minor scuffs on walls or regular cleaning needs) cannot be deducted.
• Landlords must present evidence of damage if withholding part of your deposit.

Learn more about your landlord and tenant responsibilities at Obligations of Landlords and Tenants: Rights and Responsibilities Explained.

What to Expect When Moving Out

After you give notice and leave the unit, your landlord has 10 days to return your full deposit (with interest) unless making a claim. If they keep money for damages, they must promptly communicate the reasons and amounts in writing. If you disagree, you can apply to IRAC using Form 5.

For more help on getting your deposit back, see How to Get Your Security Deposit Back with Interest When Moving Out.

Tenant Rights in Prince Edward Island

Your rights and landlord's obligations are detailed on Tenant Rights and Landlord Rights in Prince Edward Island.

Helpful Resources for Rental Listings

If you’re searching for your next home, Find rental homes across Canada on Houseme for a hassle-free, map-based experience.

FAQ: Prince Edward Island Damage Deposits

1. How much can a landlord charge for a damage deposit in PEI?
   A landlord can charge up to one month’s rent as a damage deposit. It cannot exceed this amount.
2. When should my landlord return my deposit?
   Your landlord must return your deposit, with interest, within 10 days after you move out unless they file a claim for damages.
3. What if I disagree with deductions from my deposit?
   You can file a Form 5 with IRAC to dispute any deductions your landlord makes from your deposit.
4. Can my landlord ask for additional deposits?
   No, only one damage deposit (up to one month’s rent) is allowed unless otherwise stated in PEI legislation.
5. Do I have to do a move-in or move-out inspection?
   It is not legally required, but it is highly recommended to protect your deposit and prevent disputes.

Need Help? Resources for Tenants

• PEI Tenants and Landlords Official Portal – Information and contacts
• Island Regulatory and Appeals Commission (IRAC) – Rental Office – Forms, dispute resolution
• Legal advice: Legal Aid PEI
• Community help: PEI Family Violence Prevention Services (for safe housing support)

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1. Residential Rental Property Act, RSPEI 1988, c R-13.1. Read the official legislation
2. Island Regulatory and Appeals Commission (IRAC) – Rental Office

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