When Melanie Quigg moved out of the house she had rented in Bedford last June, her rent was paid up and—after a thorough cleaning by her and her father—the place was spotless. She expected the return of her $650 security deposit 10 days after the end of the month, as specified in Nova Scotia's Tenant's Guide. Instead, she's spent the last four months texting, emailing and phoning the property manager for an explanation as to why he's still holding the money.
“I just want to know why it's being held back,” says Quigg, the parent of a five-year old boy. “I was counting on that money, and I had to borrow from my parents because it put me behind.”
David Kennedy, owner of Top Flight Property Management (a Fairview business that he's operated for 25 years with an A+ rating from the Better Business Bureau) says the situation with Quigg's deposit “has to do with her not living up to her obligations with respect to the conditions of the lease. You are only getting part of the story, so be very careful.” He didn't remember another former tenant, Dr. Ann Marie Joyce, who told The Coast she also never got back her $500 security deposit.
Section 12.5 of the Tenancies Act says renters should get their security money back after a 10-day waiting period, provided there is no unpaid rent or damage. It's also the policy adopted by the Residential Tenancies Board, which hears disputes in a province where one third of the population rents. Unfortunately, the section is at odds with Section 13.1 of the Tenancies Act, which gives landlords and tenants up to one year to make a claim for any monies in dispute.
“The 10-day reference is both useless and confusing for tenants who assume they will get their deposits back quickly,” says Megan Deveaux, a lawyer with Dalhousie Legal Aid, where security deposits are the second biggest complaint. “It doesn't work. Decisions in Small Claims Court have ruled that one year trumps ten days. The law needs to change to deal with the contradiction.”
Repeated requests for an interview with either Service Nova Scotia minister Mark Furey or a senior manager with the Residential Tenancies Board to discuss this problem were denied, but Service NS spokesperson Heather Desserud writes over email that the two timeframes have different objectives.
“Landlords have 10 days to return a security deposit if they do not make an application to retain it. The one-year timeframe allows for different types of circumstances to play out,” writes Desserud. “If a situation occurs where a security deposit was not returned nor an application was made to retain it, and subsequently both parties make applications for different awards, it is possible that a return of the security deposit to a tenant may offset some or all of the awards made to the landlord.”
Got that? The bottom line is that security deposits can remain up for grabs and in dispute for up to a year. Kennedy says he has a separate, corporate bank account where he keeps all damage deposits in trust, “unlike some other property managers and landlords who simply put the damage deposits directly into their own bank account.” There's no evidence Service Nova Scotia does an annual spot-check of these accounts.
Chasing after a security deposit is “an incredibly involved process that only works for the most determined tenants,” says Deveaux. Renters must go to a Service Nova Scotia office in person and fill out a form (cost: $31.15) to initiate a hearing before the Residential Tenancies Board. The tenant must then deliver a copy of this form to the landlord or property manager—if they can find them. The tenant must make a second trip to the Service NS location to swear an oath that the paperwork was served.
The system New Brunswick uses “makes more sense” says Deveaux. Instead of relying on property managers to hold money “in trust,” the deposit is dropped off to any Service New Brunswick office, payable to a third party. At the end of the tenancy, the renter fills out an application in person or online (an option still unavailable here) requesting the deposit be returned. If the landlord doesn't make a claim for damage or unpaid rent after seven days, Service NB sends out a cheque.
“We are aware of the system used in New Brunswick, but we are not currently considering that approach,” writes Desserud.
There are other ways the province could act to make the tenancy system simpler and fairer to use, says Deveaux. It could amend the law to support the policy of the Residential Tenancies Board which says landlords must return deposits after 10 days or file a claim with the Board. There doesn't appear to be much political will for that, though.
Ironically, in a news release sent out on October 21, Service Nova Scotia announced it had just modernized and amended the Tenancies Act to allow for hearings over the telephone as well as a quicker process to waive fees for low-income renters.
Maybe the status quo is working fine for government and property owners but the same can't be said for countless renters without damage or unpaid rent who struggle to get their deposit back. They don't appear to have a legal leg to stand on when it comes to requesting the swift return of their money. Instead they are at the mercy of their landlord, entrusted with millions of dollars by a bureaucracy which does not appear to have much active oversight.
