LD25-410

Application · compensation. Outcome: granted. 1. The Landlord will pay the Tenant $400.00 by January 2, 2026.

Order text

Order of The Director of Residential Tenancy
Dockets 25-679 & 25-722 November 21, 2025
INTRODUCTION
[1] This decision determines four applications filed with the Residential Tenancy Office (the “Rental Office”) under the Residential Tenancy Act (the “Act”).
[2] The Tenant claims for compensation regarding the Landlord’s non-compliance with the rules for keeping or returning a security deposit.
[3] The Landlord claims for compensation for damage to the Unit.
DISPOSITION
[4] I find that the Landlord did not fully comply with the security deposit rules in section 40. The Tenant has established a claim for $500.00, the security deposit balance that was not returned to the Tenant within 15 days of the tenancy’s end date.
[5] The Landlord has established a claim for $100.00 regarding the removal of the water taps that the Tenant installed. The Landlord’s other claims are denied.
BACKGROUND
[6] The Unit is a three-bedroom, two-and-a-half-bathroom unit in a duplex building that the Landlord has owned since June of 2018.
[7] The Landlord and the Tenant entered into a written, one-year-fixed-term tenancy agreement that started on May 15, 2021. The tenancy continued on a monthly basis at the end of the fixed-term.
The Tenant paid a $1,500.00 security deposit to the Landlord near the beginning of the tenancy.
Rent in the amount of $2,730.00 was due on the first day of the month.
[8] On May 31, 2025 the Tenant gave notice to the Landlord to end the tenancy on June 30, 2025.
[9] In mid-June of 2025 the Tenant moved out of the Unit.
[10] On July 10, 2025 the Landlord returned to the Tenant part of the security deposit funds, in the amount of $1,000.00.
[11] On July 14, 2025 the Tenant filed a Form 2(A) Tenant Application to Determine Dispute with the Rental Office regarding the security deposit.
[12] On July 18, 2025 the Landlord returned to the Tenant security deposit funds, in the amount of $593.00.
[13] On August 5, 2025 the Landlord filed a Form 2(B) Landlord Application to Determine Dispute with the Rental Office claiming against the Tenant for damage.
[14] On August 26, 2025 the Tenant filed an amended Form 2(A) Tenant Application to Determine Dispute with the Rental Office regarding the security deposit.
[15] On October 1, 2025 the Landlord filed a second Form 2(B) Landlord Application to Determine Dispute with the Rental Office claiming against the Tenant for damage.
[16] On October 15, 2025 the Rental Office sent the parties notice of a teleconference hearing scheduled for November 20, 2025.
[17] On November 10, 2025 the Rental Office emailed the parties a 33-page evidence package.

[18] On November 20, 2025 the Tenant and the Landlord’s representative participated in a teleconference hearing. The parties confirmed that they received the evidence package and that all evidence submitted to the Rental Office was included.
ISSUES
A. Must the Landlord pay the Tenant double the security deposit balance?
B. Must the Tenant pay the Landlord compensation for damage?
ANALYSIS
A. Must the Landlord pay the Tenant double the security deposit balance?
[19] For the reasons below, I find that the Tenant has established a $500.00 claim because the Landlord did not return this security deposit balance to the Tenant within 15 days after the date the tenancy ended.
[20] Section 40 of the Act provides the rules for keeping and returning security deposits, stating in part as follows:
(1) Except as provided in subsection (2) or (3), within 15 days after the date the tenancy ends or is assigned, the landlord shall either (a) issue payment, as provided in subsection (5), of any security deposit to the tenant with interest calculated in accordance with the regulations; or (b) make an application to the Director under section 75 claiming against the security deposit.
(2) A landlord may retain from a security deposit an amount that (a) the Director has previously ordered the tenant to pay to the landlord; and (b) remains unpaid at the end of the tenancy.
(3) A landlord may retain an amount from a security deposit if (a) at the end of a tenancy, the tenant agrees in writing that the landlord may retain the amount to pay a liability or obligation of the tenant; or (b) after the end of the tenancy, the Director orders that the landlord may retain the amount.
(4) Where a landlord does not comply with this section, the landlord (a) shall not make a claim against the security deposit; and (b) shall pay the tenant double the amount of the security deposit.
[21] The Landlord argued that they were not aware of the 15-day rule in subsection 40(1).
[22] If you are in the residential rental business, then you need to know the rules in the Act.
[23] In particular, there are numerous Rental Office and Island Regulatory and Appeals Commission decisions regarding the rules for keeping or returning a security deposit and the consequences of non-compliance.
[24] Lack of knowledge regarding the rules is not a valid defence of the consequences.
[25] The Landlord’s evidence is that they had to travel from out of province, which delayed addressing the security deposit. The Landlord stated that the Unit’s rent was only increased once over a fouryear period. This evidence does not provide valid defences under section 40.

[26] The parties’ evidence establishes that the tenancy ended on June 30, 2025, the Landlord returned $1,000.00 to the Tenant on July 10, 2025 and $593.00 on July 18, 2025.
[27] The Landlord was required to comply with subsection 40(1) regarding the security deposit balance.
The Landlords did not return the security deposit balance or file an application with the Rental Office to keep the security deposit by July 15, 2025. The Landlord’s first application was not filed until August 5, 2025, well past the 15-day timeline.
[28] There are no earlier Rental Office decisions authorizing the Landlord to keep the security deposit under subsection 40(2).
[29] There was no mutual agreement or other basis under subsection 40(3) under which the Landlord would be in compliance with section 40.
[30] As a result, the Landlord must pay the Tenant double the security deposit balance of $500.00 in accordance with subsection 40(4).
B. Must the Tenant pay the Landlord compensation for damage?
[31] For the reasons below, I find that the Landlord has established a compensation claim in the amount of $100.00.
[32] Clause 39(2)(a) of the Act states:
When a tenant vacates a rental unit, the tenant shall (a) leave the rental unit reasonably clean and undamaged, except for reasonable wear and tear…
[33] The parties submitted into evidence photographs of the Unit at the end of the tenancy. I have reviewed the photographs and all of the damage is reasonable wear and tear that is proportional to a tenancy that lasted over four years.
[34] The Landlord submitted into evidence an $825.00 invoice for a variety of work, which addresses mainly reasonable wear and tear, which is not the Tenant’s responsibility.
[35] The evidence establishes that the Tenant installed water taps in the garage without the Landlord’s consent. I find that the Tenant is responsible for the Landlord’s removal cost.
[36] The Landlord’s invoice includes “garage plumbing removal” but there is no specific cost breakdown for this work. Considering the photographs of the Unit showing reasonable wear and tear unrelated to the taps, the work listed in the invoice, and the other evidence provided by the parties, I find that the amount of $100.00 is appropriate for the Landlord’s garage plumbing removal cost.
[37] The Tenant stated that the Landlord’s property manager did not attend the Unit to complete a moveout inspection at the end of the tenancy.
[38] However, I note that the tenancy started on May 15, 2021, before the Act came into force. As a result, the Landlord was not obligated to complete the section 38 move-out inspection because of the exemption in section 109 of the Act for tenancies that started before April 8, 2023.
[39] At the hearing the Landlord raised a rent owing claim. However, I find that there is insufficient evidence to support this type of claim. The parties’ evidence establishes that the tenancy ended on June 30, 2025. The Landlord is unable to claim rent owing after this date.

CONCLUSION
[40] The Tenant has established a claim for $500.00 regarding non-compliance with section 40. The Landlord has established a claim for $100.00 regarding the garage plumbing removal.
[41] These claims offset. The Landlord will pay the Tenant the net amount of $400.00 by the timeline below.
IT IS THEREFORE ORDERED THAT
1. The Landlord will pay the Tenant $400.00 by January 2, 2026.
DATED at Charlottetown, Prince Edward Island, this 21st day of November, 2025.
(sgd.) Andrew Cudmore Andrew Cudmore Residential Tenancy Officer
NOTICE
Right to Appeal
This Order can be appealed to the Island Regulatory and Appeals Commission (the “Commission”) by serving a Notice of Appeal with the Commission and every party to this Order within 20 days of this Order.
If a document is sent electronically after 5:00 p.m., it is considered received the next day that is not a holiday. If a document is sent by mail, it is considered served on the third day after mailing.
Filing with the Court
If no appeal has been made within the noted timelines, this Order can be filed with the Supreme Court of Prince Edward Island and enforced as if it were an order of the Court.