City of Edmonton Recommended Actions from the Homelessness Task Force Report - Impact of Security Deposits

Recommendation:
That the following report be received for information.

Report Summary

  • This report discusses the relationship between security deposits and housing. It lists options available to the Landlord and Tenant Advisory Board (LTAB), municipalities and interest groups.

Previous Council/Committee Action

  • At the August 31, 1999 City Council meeting the following motion was passed.

“That the Landlord and Tenant Advisory Board be requested to report to City Council regarding the impact that security deposits have on the provision and access to affordable housing, and options available to alleviate this impact (Task Force Recommendation 3.3 –Attachment 1 of the July 12, 1999 Community Services Department report).”

Report

  • Affordable Housing: The Landlord and Tenant Advisory Board is defining the term “affordable housing” for the purposes of this response as being rental housing for lower income individuals.
  1. Impact of security deposits on the provision of affordable housing:
  • Security deposits have traditionally been an important means for landlords to provide protection against damage to rental accommodations caused by some tenants.
  • In order to remain commercially viable many landlords require security deposits to minimize the impact created by repair costs and the associated loss of revenue.
  • In the event landlords could not rely upon security deposits from tenants, a likely result would be a general rental increase passed on to all tenants to offset expenses created by some tenants. This in turn would negatively impact upon the provision of affordable housing to lower income tenants by making even more units less affordable to them.
  1. Impact of security deposit on access to affordable housing:
  • The requirement for a security deposit can impair a tenant’s access to some rental accommodations. For lower income tenants without the financial means to pay both a security deposit and the first month’s rent, a security deposit may render otherwise affordable housing unaffordable to them.
  • Further difficulties can arise for some tenants otherwise able to meet the rent commitment during the transition period between one rental accommodation and another. Under the present legislative scheme, the landlord has 10 days after the tenant gives up possession of the premises within which to refund the security deposit. In practical terms this time period may extend beyond the 10 day period, for example, where there is a disagreement about any deductions made from the deposit. The tenant’s access to affordable housing may then be impaired when the tenant needs the existing security deposit in order to acquire the new rental unit and is unable to pay both the first month’s rent and the security deposit required by the new landlord.
  • Many tenants lack the basic skills needed to properly care for and maintain the rental units to the standards required of them. This in turn often results in a more frequent loss of all or part of the security deposit during a move out.
  • Some tenants lack basic financial or social skills needed to preserve a security deposit from one tenancy intact for use in connection with the next one.
  • Many tenants are neither educated about nor understand their rights in relation to the security deposit and what deductions constitute permissible or proper deductions by the landlord. As a consequence these tenants are in greater jeopardy of losing their deposits thereby creating more financial pressures and possibly affecting their access to affordable housing.
  • The court-based remedies available to tenants to recover improperly withheld security deposits tend to be costly in relation to the amounts involved, slow and too sophisticated for many tenants.
  1. Options available to alleviate this impact:
  • The LTAB will continue to educate landlords, tenants and agencies working with them as to the rights and responsibilities associated with suite maintenance and security deposits.
  • The LTAB will continue to offer mediation services to both landlords and tenants aimed at resolving disputes regarding security deposits.
  • The municipalities and interested agencies / interest groups could write a letter to the Province to reinstate payment of security deposits for Supports For Independence recipients. A new program could include an element of accountability for the security deposit between the landlord and the Province.
  • A security deposit trust program could be established to guarantee payments of security deposits for tenants involved in the program.
  • A trust fund could be established to provide a pool of money available to be paid as security deposits for eligible program participants. A participating tenant unable to come up with a lump sum security deposit could access these funds in the form of a loan from the program, repaying the amount to the fund over time.
  • Tax incentives or rebates could be provided to landlords willing to forego some or all security deposits for qualifying tenants.

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