Security Deposit Return When Ending a Tenancy in Newfoundland and Labrador

When a tenancy ends in Newfoundland and Labrador — whether by notice, mutual agreement, or abandonment — the landlord's obligations around the security deposit shift from holding to returning. The rules are strict and the deadline is tight: the landlord must return the deposit within 10 days unless there is a claim for all or part of it.

The 10-Day Return Deadline

Section 14(9) of the Residential Tenancies Act, 2018 requires landlords to return the full security deposit within 10 days after the tenant vacates. This is not 10 business days — it is 10 days from the date the tenant hands back possession.

If the landlord believes they have a claim for all or part of the deposit, the landlord and tenant may agree in writing on its disposition, or either may apply to the Director under section 42. The 10-day deadline in section 14(11) applies when the tenant has already applied: the landlord then has 10 days after being served with the tenant's application to apply.

What the Deposit Can Cover

A landlord cannot simply deduct repair costs from the deposit and mail the balance. Unilateral deductions without the tenant's written consent or a Director's order are not permitted. Legitimate claims typically include:

• Unpaid rent or arrears.
• Damage beyond normal wear and tear, supported by dated condition reports and repair invoices.
• Unpaid late fees within the statutory maximum ($5 for the first day, $2 per additional day, capped at $75).

The Residential Tenancies Office will schedule a hearing if the tenant disputes the claim.

Deposit Caps and Interest

The maximum deposit a landlord can collect is three-quarters of one month's rent for monthly or fixed-term tenancies, or two weeks' rent for week-to-week tenancies. The landlord must place the deposit in an interest-bearing account in the province within 2 banking days. If the landlord has 3 or more residential premises, the account must be a trust account used exclusively for security deposits.

Security deposits accrue interest at a rate set annually by the province. The rate was 1.00% for 2025 and is 0% for 2026. When returning the deposit, include any accrued interest.

Common Mistakes at Move-Out

The most frequent error is confusing the return deadline with the deadline to apply. The 10-day return deadline is not a blanket deadline for a landlord to file a claim against the deposit; section 14(11) gives a landlord 10 days to apply after being served with a tenant's application.

Another common mistake is deducting for normal wear — scuffed paint, minor carpet wear, faded curtains. These are not claimable. The landlord must show that the damage goes beyond what is expected from ordinary use over the length of the tenancy.

How This Fits the Termination Timeline

The deposit return is the final step in the ending-a-tenancy process. The guide covers the full sequence — from selecting the correct termination ground and notice form, through service and hearings, to the deposit return and property handover — so landlords can track every obligation from start to finish.

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