Northwest Territories Security Deposit Laws: Rules and Returns

Properly handling security deposits is critical for landlords in the Northwest Territories (NWT) to avoid disputes and remain compliant with the Residential Tenancies Act.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in the Northwest Territories for advice specific to your situation. Information last verified: March 2026.

Security Deposit Limits

Standard Security Deposit

In the NWT, a landlord may ask a tenant for a security deposit up to a maximum of one month's rent, regardless of whether the property is furnished or not.

• Payment Timeline: At least half (50%) of the security deposit must be paid by the tenant before or at the time they move into the unit.
• Remainder: The remaining balance must be paid within three months of the start of the tenancy.

Pet Security Deposits

Recent legislative updates allow landlords to collect an additional pet security deposit.

• Limit: Up to 50% of one month's rent.
• Condition: This does not apply to certified service animals required for a disability. Existing tenants who get a pet mid-tenancy can also be asked for this deposit.

Interest on Deposits

Landlords in the NWT are legally required to pay interest on security deposits (including pet deposits) held for the tenant. The interest rate is prescribed by the regulations and must be calculated annually. The interest is typically paid out to the tenant when the deposit is returned.

What Can Be Deducted

When a tenancy ends, a landlord may retain all or part of the security deposit for specific reasons:

1. Unpaid Rent: Any outstanding rent owed by the tenant.
2. Repairs for Damages: Costs to repair damage caused by the tenant or their guests that extends beyond normal wear and tear.
3. Cleaning Costs: If the unit is left in an unreasonably dirty state compared to move-in.

What is NOT Deductible

• Normal Wear and Tear: Landlords cannot deduct for the standard deterioration of the unit over time (e.g., faded paint, slightly worn carpets).
• Upgrades: The deposit cannot be used to remodel or upgrade the unit.

The Condition Inspection Report Requirement

To legally deduct money for damages from a security deposit, the landlord must complete condition inspection reports with the tenant. This is crucial:

• Move-In: An inspection must be done within a week of the tenant taking possession.
• Move-Out: Another inspection is required when the tenant leaves. Failure to perform these inspections and provide the reports severely restricts the landlord's right to claim against the deposit for damages.

Return Deadline: 10 Days

Landlords in the NWT must return the security deposit, including accrued interest, within 10 days of the tenant moving out.

• Full Return: If there are no deductions, the full amount plus interest must be returned inside 10 days.
• Itemized Statement: If the landlord makes deductions, they must provide an itemized statement of account detailing the specific charges, along with the remaining balance of the deposit and interest, within the same 10-day period.

Resolving Deposit Disputes

If a landlord fails to return the deposit or provide the itemized statement within 10 days, or if the tenant disagrees with the deductions made, the tenant can file an application with the Rental Officer. The Rental Officer has the authority to order the landlord to return the deposit (or portions of it) and any accrued interest.

Best Practices for Landlords

1. Always Do Inspections: Without a move-in and move-out condition report, retaining the deposit for damages is incredibly difficult. Take thorough photos.
2. Calculate Interest Accurately: Make sure you are using the correct prescribed interest rate for the year.
3. Meet the 10-Day Deadline: Providing the statement and funds within 10 days is a hard deadline. Missing it invites Rental Officer disputes.
4. Use Detailed Receipts: If you make deductions, provide copies of contractor invoices or material receipts in your itemized statement to avoid arguments.

How Landager Helps

Landager simplifies deposit tracking for NWT landlords by maintaining central records of move-in condition reports, automatically calculating required interest on security deposits, and setting automated reminders for the 10-day return window.

Back to Northwest Territories Landlord-Tenant Laws Overview.