New Brunswick Security Deposit Laws: Limits and TLRO Remittance

New Brunswick handles security deposits entirely differently than most jurisdictions in North America. Rather than the landlord holding the funds in trust, all security deposits are held securely by the provincial government through the Tenant and Landlord Relations Office (TLRO).

Security Deposit Limits

The maximum security deposit a landlord can demand depends strictly on the type of tenancy:

• Standard Leases (Year-to-year, Month-to-month, Fixed-term): The maximum deposit is equal to one month's rent.
• Week-to-Week Leases: The maximum deposit is equal to one week's rent.
• Mobile Home Sites: The maximum deposit is equal to three months' rent.

It is illegal for landlords in New Brunswick to charge additional pet deposits or separate damage deposits if the total exceeds these limits.

The Remittance Requirement

One of the most critical responsibilities for a New Brunswick landlord is the requirement to remit the collected deposit to the government.

Once a landlord collects a security deposit from a tenant, the landlord must submit those funds to the Tenant and Landlord Relations Office (TLRO) within 15 days.

• The funds must be accompanied by a completed Security Deposit Remittance Form.
• Failure to remit the deposit to the TLRO is an offense under the Residential Tenancies Act.
• Upon processing, the TLRO will send an official receipt directly to the tenant, proving the funds are held securely by the province.

Deductions and Claiming the Deposit

When the tenancy ends, the security deposit is not automatically sent to either party. Both landlords and tenants have specific procedures to follow.

Landlord Claims (The 7-Day Window)

If a landlord believes they are entitled to keep some or all of the security deposit, they must formally file a claim with the TLRO within seven (7) days of the tenancy ending.

Landlords can claim funds for:

1. Unpaid Rent: Any rental arrears outstanding at the end of the tenancy.
2. Utilities: Unpaid utility bills that were the tenant's responsibility under the lease.
3. Cleaning: Costs required to bring the unit back to a standard level of cleanliness.
4. Repairs: Costs to repair damage beyond normal wear and tear caused by the tenant or their guests.
5. Late Fees: Non-Sufficient Funds (NSF) charges, provided they are stipulated in the lease.

Tenant Applications for Return

Tenants should apply to the TLRO for the return of their deposit as soon as they vacate the premises. The TLRO will not process the return until the tenancy has officially concluded.

If the seven-day period ends and the landlord has not filed a claim, the TLRO will return the full deposit to the tenant upon their written request.

Handling Claims and Disputes

If a landlord files a claim within the seven-day window, the TLRO notifies the tenant. The process then depends on the tenant's response:

• Mutual Agreement: If both parties agree to a deduction, they can submit a joint Security Deposit Refund Agreement. The TLRO typically processes these within 10 days.
• Disputed Claims: If the tenant disputes the landlord's claim, a Residential Tenancies Officer will investigate. The officer will review evidence (such as move-in/move-out inspection reports, photos, and receipts) and make a binding decision on how the funds should be distributed. This investigation process can extend the timeline for the return of the deposit to 45 days or longer.

Best Practices for Landlords

To ensure compliance and protect your ability to claim funds for valid damages:

1. Remit Promptly: Always send the deposit and remittance form to the TLRO within 15 days of receipt.
2. Perform Detailed Inspections: Conduct thorough, documented move-in and move-out inspections with the tenant. Take dated photographs and have both parties sign the reports. This is your primary evidence if you need to file a claim.
3. Act Quickly on Move-Out: Remember the strict 7-day deadline. If a unit is left damaged, submit your claim to the TLRO immediately. Delaying even slightly will forfeit your right to claim against the deposit.

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How Landager Helps

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