Settling In
Security Deposits in PEI: Rules, Limits, and Getting Yours Back
PEI caps security deposits at one month's rent and requires landlords to pay interest on it. If they miss the 15-day deadline to return it after your tenancy ends, they owe you double.
1. The Legal Maximum
| Rent frequency | Maximum security deposit |
|---|---|
| Weekly | 1 week's rent |
| Monthly (most tenancies) | 1 month's rent |
A landlord cannot charge more than this, and cannot demand a security deposit at any point other than when you actually sign the tenancy agreement. If you're overcharged, you can either deduct the excess from a future rent payment yourself, or file a Tenant Application to Determine Dispute (Form 2A) with the Rental Office.
2. Where Your Money Has to Go
- The landlord must deposit your money into an interest-bearing account at a PEI financial institution within 2 banking days of receiving it
- If the landlord owns 3 or more rental units, that account must be a dedicated trust account used exclusively for security deposits, not mixed with their operating funds
- Interest accrues the entire time the deposit is held, at a rate set annually (the CPP policy interest rate on the first business day of the year, minus 2%), and must be added when the deposit is returned
3. Getting It Back: The 15-Day Rule
After your tenancy ends, your landlord has exactly 15 days to do one of two things:
- Return the full deposit plus accrued interest, or
- File an application with the Rental Office Director claiming against it
If they do neither within 15 days, they lose the right to claim against the deposit at all, and must pay you double the deposit amount as a penalty. This is one of the strongest tenant protections in the Act, but it only works if you know the deadline exists.
4. What a Landlord Can Actually Deduct
A deposit can only be used against amounts legitimately owed under the tenancy agreement or the Act itself, typically unpaid rent or damage beyond normal wear and tear. Routine wear (worn carpet, faded paint from sunlight, minor scuffs) doesn't qualify. If a landlord tries to deduct for that, dispute it.
5. Protecting Yourself at Move-In and Move-Out
- Take dated photos or video of the unit's condition when you move in, and again when you move out
- Get a written receipt for your deposit at signing, including the amount, date, and rental unit address, this is a legal requirement, not a courtesy
- If a dispute arises, you can use the Rental Office's interest rate calculator to confirm exactly how much interest you're owed before accepting a settlement figure