A deposit is the one piece of money on your rental that is not really yours. You hold it for the tenant, you owe interest on it, and you have fixed deadlines when they move out. Get it right and a tenant leaving is a non-event. Get it wrong and a few hundred dollars becomes a dispute.
Here is how Manitoba's rules work, according to the Residential Tenancies Act and the Residential Tenancies Branch (RTB).
What you can charge
Security deposit
A security deposit cannot be more than half of the first month's rent. The RTB's example: if the rent is $800, the most you can take is $400. If you offer a rent discount, the deposit is still half of the full rent, not the discounted rent.
At the end of the tenancy it can be used for unpaid rent, damage, or extraordinary cleaning caused by the tenant. (If rent stops coming in during the tenancy, see our guide to what to do when a tenant is not paying rent.)
Pet damage deposit
If you allow a pet, you may also charge a pet damage deposit of up to one month's rent. Some rules to remember:
- You can only charge one pet damage deposit per tenancy, no matter how many pets you allow.
- It can only be used for pet-related damage, extraordinary cleaning, or other pet-related liability.
- You cannot charge a pet damage deposit for a service animal. A tenant who relies on a service animal and also keeps a separate pet can still be charged a pet deposit for that pet.
- You must tell the tenant a pet deposit is required before the agreement is signed, or when you give permission for the pet.
- If a tenant already paid a pet deposit, you cannot ask them to pay a higher amount later.
(A third kind, the tenant services security deposit, applies only where services like meals or housekeeping are included. It is unlikely to apply to your house or duplex.)
When and how you can collect
- Tell them before the tenancy agreement is signed that a security deposit is required.
- Do not require payment until the landlord and tenant have entered into the tenancy agreement. The Act says so directly, so a deposit is collected when the agreement is made, not before.
- Give a written receipt showing the amount, the date you received it, and the rental unit and residential complex it is for.
- Hold it for the whole tenancy. A tenant cannot use the deposit as last month's rent unless you agree in writing.
Take too much and the tenant can deduct the excess, with interest, from their rent.
Interest on the deposit
You owe the tenant interest from the date you receive the deposit until you give it back. The government sets the rate. The RTB's table shows 0.5 per cent for 2026, and the same rate in every year back to 2002. The RTB has a deposit interest calculator online. The 2027 rate was not posted when this was written, so check before you work out a refund.
Inspection reports: the move-in and move-out condition report
A rental unit condition report is a signed record of the unit's condition when the tenant moves in and again when they leave. In the regulation it is Form 5.
How it works in Manitoba:
- It is not required by law unless the landlord or tenant asks for one, but the RTB encourages doing it every time. Once either side asks, both must take part.
- You and the tenant inspect the unit on or before the day the tenancy starts, and again at the end. You complete the report in the prescribed form, you both sign and date it, and you make sure the tenant gets a signed copy.
- The same applies if you allow a pet partway through, or for a sublet or assignment.
- If a tenant leaves without signing, the RTB says complete the report anyway, and consider asking a neighbour to witness the condition.
- The Branch generally accepts a report as evidence if the tenant had a reasonable chance to sign it and it was not changed afterward.
Returning the deposit: the deadlines
This is the part with the clock.
| Situation | What the Act requires |
|---|---|
| No claim against the deposit | Return the full deposit plus interest within 14 days after the tenancy ends. |
| You have a claim | Within 28 days after the tenancy ends, send the tenant a written notice stating the amount of your claim, and return the unclaimed portion plus interest. |
| You cannot find the tenant | Within 28 days, pay the unclaimed amount to the RTB director. |
Send the notice to the tenant's last known address. If there is more than one tenant on the agreement, the RTB says to make the cheque payable to all of them unless they have told you otherwise in writing.
If you and the tenant disagree
Either of you can ask the RTB to decide. The Branch first tries to help you settle through mediation. If that fails, an officer decides based on what each side submits, or sometimes at a hearing. If you and the tenant agree in writing about what happens to the deposit, that settles it.
For a claim that is the deposit or less, the RTB's guidebook says there is no filing fee, and the tenant has 14 days to send their comments after the Branch passes along your claim. To succeed, you need to show a financial loss, that it happened during the tenancy, that the tenant is responsible, and the amount. You also need to show you took reasonable steps to keep the loss down.
Common mistakes
- Charging more than the limit. Half a month for the security deposit, one month for pets. Work out the numbers before you sign.
- No receipt, or no heads-up. Both are required.
- Skipping the condition report. Without one, damage claims turn into your word against theirs.
- Missing the 14 or 28 days. Put the date in your calendar the day move-out notice arrives.
- Forgetting interest. It is owed on every deposit, even when the amount is small.
- Claiming full replacement cost. The RTB awards the loss of value, not the price of a new item. Its example: a carpet that cost $1,000 to replace, was 10 years old, and has a 14-year useful life, results in an award of $285.72.
- Charging for normal wear. Damage must be more than ordinary wear and tear. A tenant is only responsible for shampooing carpets they stained, for example.
- Cleaning claims without proof. Tenants must leave a unit "ordinarily clean". If it was not clean at move-in, the Branch may not award cleaning costs.
- Charging a pet deposit for a service animal. Not allowed for that animal.
A simple deposit checklist
- Tell the applicant a deposit is required before the agreement.
- Collect the deposit only after the tenancy agreement is entered into.
- Keep the amount to half a month (security) and up to one month (pet damage, if pets are allowed).
- Give a written receipt with the amount, date, unit and complex.
- Do the move-in condition report together; sign, date and share a copy.
- Track the date the deposit came in so interest can be calculated.
- At move-out, inspect together and complete the final report.
- Return or send your claim notice within 14 or 28 days.
How Nate's Pro helps
Nate's Pro Property Management is a registered property management brokerage run by Nathan Knell in Steinbach, serving southeast Manitoba. Nate handles lease preparation and signing and rent deposit setup as part of getting a rental filled, and he can help you work through the RTB process if you need to make a claim for rent or damages. For owners, that means the front end is done properly and you are not left wondering what you were allowed to keep.
This is general information, not legal advice. Rules change, so check the Residential Tenancies Branch or talk to us about your situation.