N.S. company requires deposit of half-month's rent before it will review applications

Aaron Stevens is running out of time to find a new apartment.

In just over a month, he'll need to leave his current place in Spryfield, N.S., and says he's had nothing but trouble navigating Halifax's increasingly cutthroat rental market.

Those frustrations were amplified after discovering Paramount Management, a Halifax rental company, will only consider new applications if prospective tenants are willing to pay a holding deposit of half a month's rent. 

"I have to send them $647 just for the privilege of them reviewing the application?" he said in an interview with CBC News. "This doesn't sound legal at all." 

But the answer to whether landlords and management companies can request such a deposit isn't absolute. 

According to the Residential Tenancies Act: "No person shall demand, accept or receive, from an individual who may, or applies to, become a tenant of that person, a sum of money or other value in consideration of or respecting the application by the individual to become a tenant of that person." 

Katie Brousseau, a community legal worker with Dalhousie Legal Aid, believes a holding deposit violates the act, but it really depends on how the province's Residential Tenancies Program rules if the practice is challenged in a hearing. 

"I think you can argue that that constitutes an application fee and that's not legal," she said. 

Added difficulties, says legal aid worker

Even more problematic, she said, is how requiring potential tenants to provide a deposit further increases the barriers to finding housing for those already marginalized.

"To throw this into the mix, to say you need to have half a month's rent prepared now just for the privilege ... to be considered, not only is it unreasonable, it's just adding to the harm that hundreds if not thousands of Nova Scotians are experiencing as they're trying to secure any kind of housing." 

In 2022, Halifax saw the highest year-over-year increase in average rental prices in all of Canada.

Meanwhile, as of last October, the city had a one per cent vacancy rate. 

As he continues his search, Stevens, 27, says he's growing increasingly worried that despite making around $30 an hour as a 3D modeller – which he believes should be enough to afford an apartment that meets his needs – he may not have a place to live by June. 

"The longer I go without finding an apartment, the more the realization that I might become homeless sinks in," he said.

Application fees not permitted, says province

A spokesperson for the province told CBC News that landlords are not permitted to charge those applying to rent a home. 

"Under the [Residential Tenancies] Act, landlords are not allowed to ask for money to have an application reviewed at all, whether it's called a deposit or an additional fee," Blaise Theriault said in an e-mail to CBC News on Monday. 

"If a tenant has paid money to a landlord before signing a lease, they should apply to the Residential Tenancies Program to have their money returned."

Paramount Management, meanwhile, said via email that it does not charge an application processing fee. 

"Paramount does require a holding deposit for applications submitted," wrote Joanne Lawen Mrackic, communications manager for the Lawen Group, Paramount's parent company.

"The holding deposit in the form of a cheque or e-transfer is not deposited until the tenant agrees to rent the apartment."

But this explanation does little to curb Stevens's frustrations.

Time a factor

He believes the company is exploiting a loophole in the Residential Tenancies Act. He says it doesn't matter if an e-transfer isn't deposited by the recipient right away because it still leaves the bank account of the person sending it.

In a competitive market, he says renters need to act fast, and an e-transfer would be the quickest way to ensure a rental application delivered to Paramount is processed quickly.

"If this loophole isn't closed, I can see this becoming a very normal and regular thing."

As someone who estimates he's already sending around 10 applications per week, the costs could add up quickly.

"Nova Scotians don't have the money to be sending out $600 to 10 different [applications] every week trying to find a place to live," he said.