A security deposit is an amount of money that the tenant gives to the landlord at the beginning of the lease, and it is held in trust by the landlord to ensure that the tenant meets their obligations under the tenancy agreement.

A landlord cannot require or accept a security deposit that is greater than the equivalent of one week's rent if the rent is paid weekly, or the equivalent of one month's rent if the rent is paid monthly.

When a tenant pays a security deposit, the landlord must give the tenant a written receipt that states the amount of the security deposit, the date of receipt, and the rental unit and residential property to which it applies.

When a landlord receives a security deposit, they must deposit it in an interest-bearing account within two banking days. If the landlord has three or more rental units, the interest-bearing account must be a trust account used exclusively for security deposits.

A landlord cannot require or accept more than one security deposit in respect of a tenancy agreement, and they cannot require, or include as a term of a tenancy agreement, that the landlord automatically keeps all or part of the security deposit at the end of the tenancy agreement.

PEI RTA s. 14-15