LD26-050

Tenant application · security deposit. Outcome: granted. The Landlord will keep $75.00 of the security deposit. [4] The Landlord must pay the Tenant double the security deposit balance, and also return the balance kept, including interest, in the total amount of $3,746.70.

Linked prior order: LR25-20

Order text

Order of The Director of Residential Tenancy
Docket 25-805 February 04, 2026
INTRODUCTION
[1] This decision determines an application filed by the Tenant with the Residential Tenancy Office (the “Rental Office”) under the Residential Tenancy Act, cap. R-13.11 (the “Act”).
[2] The Tenant seeks an order requiring the Landlord to return the security deposit balance, including interest, and pay double the security deposit balance.
DISPOSITION
[3] The Landlord will keep $75.00 of the security deposit.
[4] The Landlord must pay the Tenant double the security deposit balance, and also return the balance kept, including interest, in the total amount of $3,746.70.
BACKGROUND
[5] On August 26, 2024 the parties signed a written, fixed-term tenancy agreement from September 1, 2024 to August 31, 2025 (the “Tenancy Agreement”). A security deposit of $2,250.00 was paid at the beginning of the tenancy. Rent in the amount of $2,250.00 was due on the first day of the month.
[6] On July 29, 2025 the Tenant gave the Landlord written notice that he was vacating the Unit on August 15, 2025. The Landlord agreed to end the tenancy earlier than the fixed-term end date.
[7] On August 15, 2025 the Tenant vacated the Unit, left the Unit’s keys at the Unit and the tenancy ended by mutual agreement.
[8] On September 1, 2025 the Landlord returned to the Tenant $675.00 of the security deposit.
[9] On September 26, 2025 the Tenant filed a Form 2(A) Tenant Application to Determine Dispute with the Rental Office seeking the return of the security deposit balance and double the security deposit.
On September 29, 2025 this application was amended and emailed to the Landlord (the “Application”).
[10] On October 30, 2025 the Rental Office emailed the parties notice of a teleconference hearing scheduled for December 9, 2025.
[11] On November 25, 2025 the Rental Office emailed the parties a 55-page PDF evidence package.
[12] On December 9, 2025 neither party joined the teleconference hearing at the scheduled time. The hearing was adjourned.
[13] On December 18, 2025 the Rental Office emailed and mailed the parties a new notice of teleconference hearing scheduled for February 3, 2026.
[14] On February 3, 2026 the Tenant joined the teleconference hearing for determination of the Application. The Landlord did not join the teleconference hearing at the scheduled time. I telephoned and emailed the Landlord and I did not receive a response. The hearing proceeded in the Landlord’s absence ten-minutes after the scheduled time. The Tenant confirmed that all evidence submitted to the Rental Office was included in the evidence package. The Landlord did not submit any evidence.

ISSUE
A. Must the Landlord return double the security deposit to the Tenant?
ANALYSIS
[15] Section 40 of the Act addresses the retention and return of a security deposit, stating in part as follows:
(1) Except as provided in subsection (2) or (3), within 15 days after the date the tenancy ends or is assigned, the landlord shall either (a) issue payment as provided in subsection (5), of any security deposit to the tenant with interest calculated in accordance with the regulations; or (b) make an application to the Director under section 75 claiming against the security deposit.
(2) A landlord may retain from a security deposit an amount that (a) the Director has previously ordered the tenant to pay to the landlord; and (b) remains unpaid at the end of the tenancy.
(3) A landlord may retain an amount from a security deposit if (a) at the end of a tenancy, the tenant agrees in writing that the landlord may retain the amount to pay a liability or obligation of the tenant; or (b) after the end of the tenancy, the Director orders that the landlord may retain the amount.
(4) Where a landlord does not comply with this section, the landlord (a) shall not make a claim against the security deposit; and (b) shall pay the tenant double the amount of the security deposit.
[16] The Island Regulatory and Appeals Commission in Order LR25-20 made the following comments regarding section 40 of the Act (see paragraph 16):
“These are mandatory provisions and neither the Rental Office nor the Commission has discretion to vary these provisions.”
[17] The evidence establishes that the tenancy ended on August 15, 2025 by mutual agreement. That means that Landlord had until August 30, 2025 to return the security deposit or file an application with the Rental Office by September 2, 2025 (as August 30, 2025 was a Saturday).
[18] The evidence establishes that on September 1, 2025 the Landlord returned $675.00 of the $2,250.00 security deposit to the Tenant. In an August 31, 2025 email the Tenant stated that the Landlord could keep $50.00 to $75.00 of the security deposit for cleaning.
[19] I find that the evidence establishes that the Landlord did not comply with subsection 40(1) of the Act. The Landlord only returned a portion of the Tenant’s security deposit, which was also returned past the 15-day deadline. Despite the Tenant only agreeing to the Landlord keeping at most $75.00, the Landlord kept $1,500.00 of the security deposit without the Tenant’s permission and without filing an application with the Rental Office.
[20] I find that the Landlord unlawfully kept $2,175.00 of the Tenant’s security deposit ($2,250.00 minus $75.00).

[21] The evidence does not establish that there are earlier Rental Office decisions authorizing the Landlord to retain the security deposit under subsection 40(2).
[22] As a result, the Landlord must pay the Tenant double the security deposit on the amount unlawfully kept by the Landlord, in accordance with subsection 40(4) of the Act. The Landlord must also return the amount of the security deposit kept, including interest.
[23] I find that the Tenant agreed that the Landlord could keep $50.00 to $75.00 from the security deposit for cleaning. I deduct $75.00 from the security deposit amount held by the Landlord.
[24] The Application is allowed. The Landlord must pay the Tenant $3,746.70 by the timeline below. My calculations are as follows:
IT IS THEREFORE ORDERED THAT
1. The Landlord will keep $75.00 of the Tenant’s security deposit.
2. The Landlord must pay the Tenant $3,746.70 by March 4, 2026.
DATED at Charlottetown, Prince Edward Island, this 4th day of February, 2026.
(sgd.) Cody Burke Cody Burke Residential Tenancy Officer
NOTICE
Right to Appeal
This Order can be appealed to the Island Regulatory and Appeals Commission (the “Commission”) by serving a Notice of Appeal with the Commission and every party to this Order within 20 days of this Order.
If a document is sent electronically after 5:00 p.m., it is considered received the next day that is not a holiday. If a document is sent by mail, it is considered served on the third day after mailing.
Filing with the Court
If no appeal has been made within the noted timelines, this Order can be filed with the Supreme Court of Prince Edward Island and enforced as if it were an order of the Court.
Item Amount Security Deposit $2,250.00 Interest on $2,250.00 (26-AUG-24 - 1-SEP-25) $55.31 Returned amount ($675.00) Amount agreed to be kept ($75.00) Interest on $1,500.00 balance (2-SEP-25 - 4-FEB-26) $16.39 Double the security deposit balance $2,175.00 Total $3,746.70