Is an invoice enough to withhold a security deposit in BC?
Two public Residential Tenancy Branch decisions: a landlord with invoices for more than the deposit who filed on day 15 and kept part, and one who kept the deposit under a tenancy agreement addendum and paid double.
On April 30, 2024, a landlord in British Columbia walked through a condo for the move-out inspection with an agent for the departing tenant. The landlord, a realtor, brought an assistant to take photographs, and the tenant's agent signed the report agreeing the landlord could keep the $1,725 security deposit. Over the next weeks the paper piled up on the landlord's side: a cleaning invoice for $730.28, a handyman's invoice for $472.50, a $1,450 estimate to replace a bedroom carpet and a $200 strata fine. Together that was $2,852.78 against a $1,725 deposit.
On a busy week, that file looks closed: someone for the tenant signed, and the bills were bigger than the money held. The tenant saw it differently. When the landlord emailed a copy of the report a day or two later, the tenant wrote back that they did not agree with it.
What saved the landlord happened on the last possible day. The tenancy ended on April 30 and the forwarding address arrived in writing the same day, and section 38(1) of the Residential Tenancy Act gives a landlord 15 days from the later of those dates to repay the deposit with interest or "make an application for dispute resolution claiming against the security deposit". The application went to the Residential Tenancy Branch on May 15. Had it gone in a day later, section 38(6) says the landlord could no longer claim against the deposit and "must pay the tenant double".
At the hearing the signature did not hold. Section 38(4) lets a landlord keep an amount if, at the end of the tenancy, "the tenant agrees in writing the landlord may retain the amount", or if the director orders it. The arbitrator wrote, "I am not satisfied that the tenant's agent had the authority to agree that the landlord keep the security deposit." So it came down to an order, and every invoice was read line by line.
A phone call would have been a weaker paper than that signature. Section 38(4)(a) asks for the tenant's agreement in writing, so a tenant saying "take it off the deposit" on the phone does not count, however clearly the manager remembers it. The forwarding address works the same way: the 15 days in section 38(1)(b) start on the day the landlord receives the address in writing, and a tenant saying one is on its way starts nothing.
The cleaning invoice billed nine hours at $45 an hour, which it called a realtor rate, for the items the move-out report marked dirty. "I fail to see how it would take 9 hours," the arbitrator wrote, and a realtor rate "may be more convenient for a landlord or property manager, but the actual cost is required." The carpet estimate failed because the move-in report said nothing about the carpet and the photos showed no buckling. The wall patching failed because the move-in report already listed chips and scuffs. In the end the landlord kept $920.03, filing fee included, and was ordered to return $804.97.
Why a bill cannot settle it
I think the rule makes sense once you look at who wrote each paper. The landlord holds the money, and the landlord's own contractor wrote the invoice. If the bill alone decided it, the person holding the deposit would also decide how much of it to keep. Section 38 puts someone else between the bill and the money, either the tenant agreeing in writing to an amount or an arbitrator reading the bill. The 15 days and the doubling are there so nobody sits on the money while they put off that choice.
If the file holds a pet damage deposit as well, section 38(7) narrows it further. Where the landlord is entitled to keep an amount, that deposit "may be used only for damage caused by a pet to the residential property, unless the tenant agrees otherwise." A general repair bill does not turn into pet damage because it sits in the same folder as the pet deposit.
Two other paths are in the Act, and neither one is an invoice. A tenant who does not take part in the move-in or move-out inspection can lose the right to the deposit back, in the cases sections 24(1) and 36(1) set out, and section 38(2) says the landlord's 15-day duty does not apply then. Under section 39, a tenant who gives no forwarding address in writing within one year after the tenancy ends loses the right to the deposit too, and the landlord may keep it. Either way the file still needs the inspection record, or the date the tenancy ended with no address on it.
A July 2021 decision shows the other ending. An addendum to the tenancy agreement said cleaning would come out of the deposit, and the tenant had agreed by email to $100 for carpet cleaning. The landlord kept the whole $342.50 and never applied. Section 20(e) of the Act already forbids a term that lets a landlord automatically keep a deposit. "At no time does the landlord have the ability to simply keep the security deposit because they feel they are entitled to it or are justified to keep it," that arbitrator wrote, and ordered double the deposit back, less the $100 the tenant had agreed to.
After reading both, my view is that the 2024 landlord lost most of the claim and still came out well, while the 2021 landlord may have had a fair cleaning bill that nobody ever looked at. I would still not file on day fifteen the way the first landlord did.
On the deposit you are holding today, write two dates on the file, the day the tenancy ended and the day the forwarding address arrived in writing, and count 15 days from the later one. Before that day, get the tenant's own written agreement to a named amount, return the money, or file the application with the invoices attached.