Key Deposit Laws and Tenant Rights in Prince Edward Island

When moving into a new rental in Prince Edward Island (PEI), you might be asked by your landlord to provide a key deposit. But is this legal, and what does PEI law say about it? This guide covers everything tenants need to know about key deposits, your rights, and actions you can take if there's a dispute.

Understanding Key Deposits in Prince Edward Island

In PEI, the laws around rental deposits are clear about what landlords can and cannot collect from tenants at the start of a tenancy. According to the Rental of Residential Property Act (RRPA), landlords are only allowed to require a security deposit from tenants, usually to cover potential damage to the unit or unpaid rent.

• Landlords may not charge any additional deposits—such as extra deposits for keys, pets, or parking—as a condition of renting.
• The only permissible deposit is the one-time security deposit, which must not exceed one month’s rent.

Key deposits, where the landlord demands a separate payment solely for providing keys, are not recognized under PEI law. Any attempt to require a fee beyond the legal security deposit should be challenged by the tenant.

What Is a Security Deposit?

A security deposit is a sum paid at the start of a lease to protect the landlord from potential loss or damage associated with the rental. If you return all keys when you move out, and there is no damage or unpaid rent, the deposit should be returned in full, with interest.

For more on legal deposits, see Understanding Rental Deposits: What Tenants Need to Know.

What to Do If Your Landlord Demands a Key Deposit

If your landlord requests a key deposit in addition to the security deposit:

• Politely remind them that under the Rental of Residential Property Act, only one deposit (security deposit) can be collected.
• Ask for the request to be removed from your rental agreement.
• If the landlord still insists, or if you have already paid a key deposit, you may file a complaint with the Residential Tenancy Office (see below for how-to steps).

How to Get Your Deposit Back When Moving Out

When your tenancy ends, and you provide notice and return the rental keys, your security deposit (including any interest) should be returned within 10 days, provided there is no damage and no outstanding rent. For tips on getting your full deposit back, visit How to Get Your Security Deposit Back with Interest When Moving Out.

Official Forms and Tribunal Information

Residential tenancy disputes in PEI are handled by the PEI Residential Tenancy Office. To resolve deposit disputes:

• Application Form to Director (Form 2B): Use this form to file a complaint if your landlord collects an unlawful deposit or refuses to return it. Download Form 2B from the PEI government website.
• How to Use: Complete the form with the details of your dispute and submit it to the Residential Tenancy Office. Attach proof of payment and any correspondence with your landlord.

For additional steps around moving in, see Guide to the Initial Rental Property Inspection for Tenants.

Relevant Legislation

The rules discussed here are governed by the Rental of Residential Property Act of Prince Edward Island¹.

Learn more about your broad rights and responsibilities at Tenant Rights and Landlord Rights in Prince Edward Island.

Looking to move within PEI or across Canada? Explore Houseme for nationwide rental listings.

Frequently Asked Questions

1. Can my landlord charge a key deposit in addition to the security deposit?
   No. In PEI, landlords can only collect a single security deposit, which includes anything that could cover the possible loss of keys.
2. What if I lose my keys during the tenancy?
   Your landlord may deduct the cost of replacing lost keys from your existing security deposit, but cannot require an extra deposit in advance.
3. How do I get my deposit back after moving out?
   Provide proper notice, return the keys, and leave the unit in good condition. The landlord must return your deposit (with interest) within 10 days if there are no deductions.
4. What can I do if my landlord refuses to return my deposit?
   File an Application to the Director (Form 2B) with the PEI Residential Tenancy Office, including all relevant documentation.

Key Takeaways for PEI Tenants

• Key deposits are not legal in PEI—only a standard security deposit is allowed.
• If a landlord asks for more than the legal deposit, tenants have the right to challenge it.
• Always keep records of payments and communications to protect your deposit rights.

In summary, knowing the law helps protect your money and prevents unnecessary disputes with landlords.

Need Help? Resources for Tenants

• PEI Residential Tenancy Office – Tribunal for all official rental disputes and applications.
• PEI Department of Justice and Public Safety – Rental Rules
• PEI Government Landlords and Tenants Hub

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1. Rental of Residential Property Act (PEI)

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