Error to avoid in order to keep a security deposit legal

CORPIQ expects certain landlords to fall into the trap of requiring their prospective tenants to pay a security deposit. This approach is doomed to fail and will not be defensible in court, warns CORPIQ. Deposits will not necessarily be valid, far from it.

Even if they claim that the tenant has truly paid a deposit voluntarily, even if a signed agreement exists, these landlords must expect to be ordered by the court to reimburse it immediately or to deduct it in case of unpaid rent.

In fact, there is abundant of jurisprudences in favour of tenants who declare that he or she was obliged to pay a security deposit in order to obtain the dwelling. The court systematically agrees with the tenant since his or her words prevail over the owner’s in such a case.

By offering surety options from which it is up to the tenant to choose thus becomes a central element in the recognition of the legality of a security deposit, as provided in the form made available by CORPIQ. When it is legally obtained by the landlord, the deposit may be retained until the end of the lease. It will then be refundable to the tenant if the tenant has no due rent, has not damaged the dwelling, and has not abandoned the premises, for example.

Faced with a tenant who tries to recover his or her deposit before the end of the lease, another mistake by the landlords would be not to quote the judgment of Immeubles À Côté inc. obtained by CORPIQ. Indeed, CORPIQ expects that certain judges of the Régie du logement will try to stray from this new interpretation of Article 1904 of the Civil Code on security deposits.

Consult the Q & A page (in French only) on security deposits for more information.