Nova Scotia Security Deposit Laws: Limits, Returns, and Deductions

Nova Scotia has some of the most tenant-friendly security deposit laws in Canada, governed by the Residential Tenancies Act (effective 1 November 1999), with strict limits on the amount landlords can collect and clear rules for how deposits must be held and returned. Recent changes effective August 1, 2024 have modernized the claim process with new online forms.

Security Deposit Limits

Maximum Amount

In Nova Scotia, the security deposit cannot exceed half of one month's rent (50% of one month's rent). For example:

Additional Charges and Fees

Landlords in Nova Scotia cannot collect any sum of money or other value in addition to the rent payable that would cause the total security deposit to exceed half of one month's rent. Any such charges, including but not limited to pet deposits, cleaning fees, key deposits, move-in fees, or last month's rent collected in advance, are deemed to be part of the security deposit and are subject to the maximum limit of half of one month's rent.

Trust Account Requirements

Landlords must hold the security deposit in a separate trust account at a recognized financial institution. This is a legal requirement — not merely a best practice. Key rules:

• The deposit must be kept separate from the landlord's personal or operating funds
• The trust account must be at a recognized Nova Scotia financial institution
• Interest must be paid to the tenant annually or at the end of the tenancy
• The interest rate is set by regulation

What Can Be Deducted

Landlords may claim deductions from the security deposit for:

1. Unpaid rent — any rent owing at the end of the tenancy
2. Damage beyond normal wear and tear — tenant-caused damage to the unit or property
3. Costs for cleaning — if the unit requires cleaning beyond what is reasonable

What is NOT Deductible

• Normal wear and tear — faded paint, minor scuffs, worn carpet
• Pre-existing damage — conditions that existed before the tenant moved in
• General maintenance — repairs that are the landlord's responsibility regardless of tenancy

Return Deadline: 10 Days

Landlords must return the security deposit, with accrued interest, within 10 days of the last day of the tenancy. This is one of the shortest return timelines in Canada.

If Making a Claim

If the landlord intends to keep any portion of the deposit, they must:

1. Complete and submit a Form R (Security Deposit Claim Form) within 10 days
2. Send a copy of the claim form to the tenant within the same 10-day period
3. Provide documentation supporting the claimed deductions

New Online Claim Process (Effective August 1, 2024)

Nova Scotia introduced new online forms for security deposit claims, making the process more accessible for both landlords and tenants. The online process may eliminate the need for a formal hearing in straightforward cases.

Tenant Remedies

If a tenant does not receive their deposit or a copy of the landlord's claim form within 10 days, the tenant can:

• Submit an application to the Residential Tenancies Program to recover the deposit
• Contest the landlord's claim by filing a dispute within the program
• Seek an order from the Director of Residential Tenancies for the return of the deposit plus interest

Penalties for Non-Compliance

Landlords who fail to comply with security deposit requirements may face:

• An order to return the full deposit plus interest regardless of any legitimate claims
• Potential liability for the tenant's costs in pursuing the claim
• Loss of the right to claim deductions if the Form R was not filed within 10 days

Best Practices for Landlords

1. Document everything at move-in — Take dated photos and videos of the unit's condition
2. Conduct a move-in and move-out inspection — Use a written checklist signed by both parties
3. Open a dedicated trust account — Ensure compliance with the trust account requirement
4. Track interest obligations — Pay interest to tenants annually or at lease end
5. File Form R immediately — Don't wait until day 10; submit claims as soon as possible
6. Keep receipts — Retain all documentation for any repair or cleaning costs deducted
7. Use the online claim system — Take advantage of the streamlined digital process

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How Landager Helps

Managing properties in Nova Scotia requires navigating a rapidly evolving legislative landscape, particularly with the introduction of the 5% interim rent cap and shortened eviction timelines. Landager's comprehensive platform protects NS landlords by automating the strict 4-month notice requirement for rent increases aligned with the tenancy anniversary date. Furthermore, the platform tracks the precise 3-day arrears window before a Form D can be legally served, ensuring your compliance is never in question. From managing security deposit trust account records to facilitating the 10-day return timeline, Landager provides a digital safety net that shields you from the complexities of the Residential Tenancies Program.