New Brunswick Rent Increase and Security Deposit Rules for Landlords

How Security Deposits Work Under the Residential Tenancies Act

New Brunswick caps a security deposit at one week's rent for a week-to-week tenancy and one month's rent for other standard residential tenancies under Section 8(3) of the Residential Tenancies Act (R.S.N.B. 1975, c. R-10.2). For mobile home sites, the maximum is three months' rent under Section 25.3.

Unlike some provinces, New Brunswick landlords cannot hold security deposits in a personal bank account. Every dollar collected as a deposit must be remitted to the provincial Security Deposit Fund managed by Service New Brunswick within 15 days of receipt. Where no application to transfer the deposit has been made, the remaining balance is returned within seven days of the tenant's written request after the tenancy ends (Section 8(15)). Interest earned on money held under the Act is paid into the Consolidated Fund under Section 8.1.

Can You Increase the Security Deposit When Rent Goes Up?

This is the question most landlords get wrong. When you raise rent by the permitted 3% under the current statutory cap, the new rent becomes the baseline. But the security deposit you collected at the start of the tenancy stays where it is — in the provincial fund, at the original amount.

Nothing in the Residential Tenancies Act gives landlords a mechanism to top up a security deposit during an active tenancy to reflect a rent increase. You cannot serve a notice demanding additional deposit money alongside your rent increase notice, and you cannot withhold services or access until a tenant pays a deposit supplement.

The one-month cap applies at the time the deposit is collected. For an existing tenancy, that moment has already passed.

When a New Tenancy Starts

The picture changes when a unit turns over. New Brunswick does not impose vacancy control — when a tenant leaves and a new tenant moves in, you can set the initial rent at market value. At that point, you collect a fresh security deposit based on the new rent, up to the one-month maximum.

So if a unit rented at $1,200/month had a $1,200 deposit, and you re-let it at $1,500/month to a new tenant, the new deposit cap is $1,500.

Fees That Are Not Deposits

Section 8(4) of the Residential Tenancies Act bars requiring an amount other than rent, a security deposit, or a reasonable amount for a service provided in relation to the tenancy. Key money, holding fees, and non-refundable application charges outside those allowed categories are void regardless of what you call them in the agreement.

Some landlords try to recoup rising costs by adding "administrative charges" or "service fees" outside the rent. Residential Tenancies Officers treat mandatory fees as rent components subject to the statutory 3% cap. Disguising a prohibited deposit top-up as an administrative fee does not change its legal character.

What You Should Do After Raising Rent

After serving a valid rent increase notice — on a separate document with six months' notice — update your records to reflect the new rent amount. Your compliance file should include the original deposit receipt, the remittance confirmation to the provincial fund, and the rent increase notice showing the new baseline.

If you want a complete walkthrough of every step from eligibility check to proof of service, the Rent Increases in New Brunswick guide covers the full process with dated checklists and calculation worksheets.

Key Takeaways

• Security deposits are capped at one week's rent for week-to-week tenancies, one month's rent for other standard premises, and three months' rent for mobile home sites
• All deposits must be remitted to the provincial Security Deposit Fund within 15 days
• You cannot top up a deposit during an active tenancy when rent increases
• A fresh deposit at the new rent level can only be collected from a new tenant
• Mandatory fees disguised as deposit supplements are treated as rent under the cap

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