| Support Center
What happen to a damage deposit if a tenant terminate or cancel the contract before move-in?
Once they signed the lease, it's a binding contract, even if they never moved in.
I'd keep the deposit but apply it only against actual losses: re-advertising, showings, vacancy until re-rented. Keep receipts. You can't pocket it as a penalty, and you must e-list promptly to mitigate.
Check your province's deposit rules too, since you're in Canada.
You can generally only keep the deposit against actual losses — not as a penalty. If you re-rent quickly with no gap, most of it should go back. Document your mitigation (listing dates, showings) — that's what a tribunal asks about. Canadian provinces differ, so check your province's tenancy rules before you decide.
A signed lease is generally a binding contract, so a tenant can't just cancel because they haven't moved in yet. Whether you can keep any of the deposit usually comes down to your lease wording and your province's rules — most provinces don't let you keep it as a windfall; you'd hold it against actual losses like re-listing costs, vacancy, and re-screening. In practice: tell the tenant in writing that you're holding them to the lease, start re-listing right away, and document every dollar spent. Courts look kindly on landlords who moved fast to re-rent. And for next time, a clear clause stating the deposit is forfeited if the tenant backs out before move-in saves a lot of grief.
