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Part of Information for landlords and tenants

Starting a tenancy

Information on rental agreements, security deposits and sub-meters when starting a tenancy.

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Information for landlords and tenants

Types of rental agreements

Alberta has 2 types of rental agreements:

  • Fixed term agreement

    A fixed term tenancy begins and ends on specific dates.

    For example: a tenant and landlord may agree that the tenancy will be for a fixed term of 2 years from January 1, 2016 to December 31, 2018. On December 31, 2018 the tenancy will automatically end.

    No notice is required to end the tenancy by either the landlord or the tenant, even if the parties agree to provide each other with notice.

  • Periodic agreement

    A periodic tenancy has a start date but no end date. Either the landlord or tenant may end a periodic tenancy by giving notice. Most periodic tenancies are month-to-month, but they can also be week-to-week or year-to-year.

  • Hybrid tenancies

    Some tenancies, which are often referred to as ‘hybrid’ tenancies, begin as a fixed term tenancy and transition to a periodic tenancy after the expiry of the fixed term. These can arise through:

    • terms in the tenancy agreement, or
    • where the landlord and tenant by their conduct expressly or impliedly indicate that they intend that the tenancy be renewed or continued after the end of the fixed term tenancy

    The RTA provisions applying to fixed term and periodic tenancies apply to the respective parts of a hybrid tenancy.

Definitions

  • Tenancy week

    A tenancy week is a week defined between the landlord and tenant in the rental agreement to outline the length of the rental period, and can start on any day of the week. For instance, a tenancy week could be from Thursday until the following Wednesday.

  • Tenancy month

    A tenancy month is a month defined between the landlord and tenant in the rental agreement, and can start on any day of the month. For instance, a tenancy month could be from the 15th of the month until the 14th of the next.

  • Boarding and employer accommodations

    Boarding refers to accommodations where the landlord provides both the room and in some situations meals and the landlord does not live in the residence. The terms of the agreement determine whether the agreement will be a fixed or periodic term.

    Employer accommodations refers to when an employer rents a residence to an employee as part of the employment.

  • Sublease

    A tenant can sublet or assign their rental premises to someone else with the landlord’s written consent. The rental agreement would be between the subletter and tenant. A landlord cannot refuse permission without reasonable grounds, and must give the tenant their reasons in writing within 14 days after receiving the written request.

    If the landlord does not answer the request within 14 days, the tenant may assume the landlord agrees to the sublet or assignment. A landlord may not charge a fee for giving consent to a sublet.

    A tenant who sublets or assigns the rental premises may still be responsible for the remainder of the lease even if the subletter moves out, and may choose to seek legal advice on what their responsibilities are.

Drafting a tenancy agreement

The tenancy agreement is a contract of terms between the landlord and tenant, agreed on before the tenant moves in. The agreement may be written, verbal or implied, but written is always better because it provides evidence should there be a dispute.

A tenancy agreement cannot take away any of the tenant’s rights outlined in the Residential Tenancies Act (RTA). Anything in the agreement that waives any rights set out in the RTA is void.

A residential tenancy agreement should be in writing and contain the following information:

  • date of agreement
  • names and addresses of all parties
  • address or description of the location of the residential premises
  • term of the tenancy
  • rent amount, where, when and how it is to be paid
  • clauses about whether utilities, furniture, appliances, parking, etc. are provided and at whose expense
  • names of the people who are permitted to live in the residential premises
  • security deposit amount, interest, and what the landlord is allowed to deduct for at the end of the tenancy
  • care, maintenance and repair responsibilities
  • insurance requirements
  • rules for additional fees (such as NSF charges), guests, pets, etc.
  • signatures of landlord and tenant

Security (damage) deposit

Landlords usually ask tenants for a security deposit, sometimes called a damage deposit.

The amount of a security deposit cannot be more than one month's rent at the time tenancy starts.

The security deposit cannot be increased as rent increases, or for any other reason during the tenancy. Tenants can ask for a receipt for any fees paid, showing the amount, date and parties in the transaction.

Landlords must deposit all security deposits into an interest-bearing trust account in a bank, treasury branch, credit union or trust company in Alberta within 2 banking days of the time they collect them from the tenant.

Interest chart

The minimum annual interest rate that landlords must pay on security deposits is determined by a formula set out in the Security Deposit Interest Rate Regulation.

Time periodMinimum Annual Interest Rate
January 1, 2024 to December 31, 20241.6%
January 1, 2009 to December 31, 20230%
January 1, 2008 to December 31, 20080.5%
January 1, 2007 to December 31, 20070.3%
January 1, 2002 to December 31, 20060%
January 1, 2001 to December 31, 20011.75%
January 1, 2000 to December 31, 20001.15%

Calculate your security deposit interest

Security deposit interest calculator

Sub-meter for rental unit

A landlord will often use a master meter to measure all the natural gas and electricity used by a whole apartment building, and include utility costs in the rent. It does not measure the amount used by each rental unit.

A sub-meter measures the natural gas and electricity for a rental unit. Landlords may install a sub-meter for all rental units in a building.

These meters tell the landlord exactly how much energy each tenant uses. The landlord can bill each tenant for their own consumption, but this must be included as a term in any tenancy agreements. Sub-meters are different from master meters installed in an individual rental unit that allow a tenant to be billed directly from the utility provider.

Sub-meters:

  • help landlords to fairly and accurately divide the costs among their tenants.
  • allow tenants to pay for the energy they actually use
  • allow tenants to benefit from their own energy conservation efforts
  • encourage tenants to cut energy costs and usage, which helps the environment
  • shift energy price changes from the landlord to the tenant

Landlords may install sub-meters during a tenancy, but are not allowed to begin charging separate amounts for utilities unless the tenant consents or a fixed-term tenancy expires. Any increase in the total amount a tenant must pay to the landlord would constitute a rent increase under the RTA.

For more information, read the Sub-meters for rental units tip sheet.

Sub-meter resources

  • Energy providers

    Tenants using a sub-meter cannot choose their energy provider. Only customers who have master utility meters (such as landlords and tenants renting a self-contained unit or house) can choose which retailer they use.

  • What tenants will have to pay

    Either the landlord or sub-meter company can issue the utility bill. They both use a mathematical formula to calculate how much each tenant pays. Tenants have a right to know this formula and should insist that it be in their sub-meter contract.

    Tenants can see what rates other Albertans pay for utilities by comparing prices on the Office of the Utilities Consumer Advocate (UCA) website.

  • Deposits and fees

    Tenants may have to pay a deposit for heat or natural gas and/or electricity. The amount of the deposit and how long the landlord or sub-meter company will hold it should be in the sub-meter contract.

    Sub-meter contracts often include administration fees. These fees are applied to each bill to recover the cost of the equipment and the costs associated with collecting the data and producing bills.

    Tenants would have to agree to any changes in what they pay during a tenancy. Any increase in the total amount a tenant must pay to the landlord would constitute a rent increase under the RTA.

  • Common areas of a building

    Tenants should ask the landlord how common area utility costs are handled in their building before signing a tenancy agreement. Practices will vary from one landlord to another.

Contact

For more information on topics related to landlords and tenants, contact the Consumer Contact Centre.

For resolving a dispute, learn more about the Residential Tenancy Dispute Resolution Service.

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