B.C. landlord keeps deposit from tenant who never moved in, sparking legal fight
A tenant and landlord were involved in a legal dispute at the BC Civil Resolution Tribunal in a case about an unreturned damage deposit for a rental suite.
On Mar. 22, 2024, the renter visited the rental suite in question for a viewing. The tribunal said that “after some discussion,” the tenant agreed to rent the room.
He then paid a $550 deposit to the acting landlord and was provided with a receipt for a damage deposit.
According to the tribunal’s decision, the renter had a change of heart the next day and no longer wanted to move in. He then texted the landlord requesting that the damage deposit be returned.
“The respondent never returned the damage deposit,” the tribunal decision states.
The tribunal turned its attention to the rental agreement, the terms of which were found on the receipt. The rent was supposed to be $1,100 per month, due on the last day of each month. No additional terms, including information about notice, minimum tenancy, or deposit return, were noted.
The landlord claimed that after a security deposit is paid, it’s considered an established tenancy, “and the money can be used towards unpaid rent.”
While the landlord never provided any materials to support his claims, such as caselaw or legislation, the tribunal inferred that the landlord was attempting to suggest that the rental agreement had been breached.
“I find the respondent is alleging the applicant breached an implied contractual term that if the applicant changed his mind about moving in, he would still owe rent for the first month, and would forfeit the deposit.”
In reaching its decision, the tribunal based its ruling on the language used on the deposit receipt. The landlord called it a “damage deposit” specifically.
“Its purpose was to ensure the respondent had funds to repair damage the applicant may cause to the property during the tenancy. Contrary to the respondent’s argument, I know of no British Columbia law that permits a party to keep a deposit provided to fix potential damage to property where there was no such damage.”
The tribunal declared, “Since the applicant never moved in, I find the respondent has no entitlement to keep the deposit, and he must return it.”
Including tribunal fees and the $550 damage deposit, the landlord was ordered to pay the tenant $711.67 within seven days of the decision.
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