As of Jan. 1, landlords in Alberta will be required to pay 1.6 percent interest on security deposits held in trust for tenants in residential and mobile homes tenancies.
Landlords must pay any interest owing to their tenants annually at the end of each tenancy year unless both parties agree in writing that the interest will not be paid annually, in which case the interest must be compounded annually and paid out at the end of the tenancy.
The minimum interest rates a landlord must pay on a security deposit is published online each year by Service Alberta and Red Tape Reduction. This will be the first time since 2008 that landlords will have to pay interest on residential security deposits.
“This is good news for tenants and is revenue-neutral for landlords. Landlords have been required to pay interest on security deposits since 2004 but only when interest rates reach a certain level. This year, for the first time in a long time, they’ve reached that level.”
For residential and mobile home tenancy agreements ending in 2024, the interest will only apply to the months the security deposit was held in that year.
Under the Security Deposit Interest Rate Regulation of the Residential Tenancies Act passed in 2004, interest paid on security deposits for an upcoming year is three per cent less than what the ATB Financial cashable one-year GIC rate was on the previous Nov. 1.
ATB’s rate on Nov. 1 was 4.6 per cent, so the interest rate for security deposits held under the Residential Tenancies Act or Mobile Home Sites Tenancies Act for 2024 will be 1.6 per cent – the first time in 15 years that the rate has been above zero per cent.
The web page also has a calculator that helps landlords and tenants determine the amount of interest that is owed on any specific security deposit based on the regulated interest rate.