There is an important update from the Alberta government on security deposit interest payments to tenants, which will come into effect on Jan. 1, 2024.
Since Jan. 1, 2009, the interest rate on tenants’ security deposits has been 0%, and there have been no changes to this until the recent announcement. As of Jan. 1, 2024, the interest rate on security deposits will increase to 1.6% as prescribed under the Residential Tenancies Act and Mobile Home Sites Tenancies Act (Section 2).
With this recent change, we would like to refresh our members on some of the rules on the interest payments to tenants.
- Interest must be paid out to the tenants annually unless otherwise agreed to in writing by the tenant and landlord. Payment of the security deposit can be compounded annually and paid out to the tenant at the end of the lease agreement.
- The landlord can agree to a higher interest rate in the lease agreement. Please remember that the landlord will be bound to pay the tenant’s interest on the security deposit and the compounding interest at the agreed-upon higher interest rate.
Please ensure that your residential lease agreements are revised to reflect the changes to the interest rate payments.
The Government of Alberta has provided an online calculator which will assist you in calculating interest payments.
You can find the link to the calculator here: Service Alberta: Interest chart.
For further information on changes to the interest rates, please visit Security deposit interest rate change | Alberta.ca