B.C. landlord ordered to return deposit after tenant backs out of rental
A renter from B.C. who had agreed to rent a room but later found a better rental had to initiate a legal fight in hopes of getting his original security deposit back.
The details were laid out in a BC Civil Resolution Tribunal dispute.
The renter and applicant in the dispute said he paid a $675 deposit and said that the landlord refused to return it when he heard about a better rental. The landlord filed a counterclaim, claiming that she lost $1,350 in rent, and that’s why she kept the deposit. She also claimed the remaining $675.
Both parties agreed on most of the background facts.
The landlord had advertised the room on Facebook. The tenant sent a message about it on June 2, 2024. After a viewing, both parties agreed that the tenant would begin renting the room on July 1 that year. A receipt shows that the deposit was paid on June 13.
A few hours after sending the deposit, the tenant explained to the landlord that a friend had offered him a rental in a better location at a lower price.
According to the tribunal decision, the tenant asked if the landlord would consider returning part of the deposit and renting the room to someone else. The landlord refused.
“In considering when deposits are refundable, courts have said a true deposit is designed to motivate contracting parties to carry out contracts they have agreed to. A buyer who refuses to purchase what they have bargained for generally forfeits (gives up) the deposit. This is called ‘repudiation,'” the tribunal said.
The tribunal made an interesting distinction in considering whether or not the renter repudiated the agreement, and actually found that it was the landlord who had repudiated it.
The tribunal explained that the renter asked the landlord if she’d be willing to cancel the rental. It added that at no point did the renter say he changed his mind and was backing out of the agreement. It added that text messages show he was still willing to rent the room if both parties didn’t mutually agree to cancel.
The tribunal said that the landlord repudiated the B.C. rental agreement because, after he found a better rental, she questioned the tenant’s reliability. It found that the landlord had “not identified any legal basis to cancel the parties’ agreement” or to keep the deposit.
For those reasons, the tribunal ordered the landlord to return the deposit and dismissed the counterclaim that the tenant was responsible for $1,350 in lost rent.
In total, the landlord was ordered to pay the tenant $715.84, which was for the deposit and tribunal-related fees.