Province doesn't know what it makes from tenants' damage deposits
The New Brunswick government says it has no idea how much money it has grabbed by skimming the interest generated by apartment tenants' security deposits.
That's because the so-called "fund" that holds the money doesn't exist as a separate account, officials say, making it impossible to calculate the interest generated.
Instead, the deposits are being dumped into the province's general account, known as the consolidated fund and are paid out of that account when tenants claim them.
The consolidated fund "fluctuates due to the normal day-to-day business of depositing and remitting security deposits, which makes it difficult to provide an exact figure on total interest," Service New Brunswick spokesperson Judy Cole said.
The dollar value of the deposits in the fund reached $24.3 million in 2015-16, according to Service New Brunswick's most recent annual report.
The Residential Tenancies Act says the office of the rentalsman "shall deposit all money received by him in respect of the security deposit fund … in one or more interest bearing accounts in one or more chartered banks or trust companies within the Province."
The act says interest from those deposits "shall be paid into the Consolidated Fund."
But Cole said putting all the money in the consolidated fund complies with the act "as it only states the money needs to be in a fund."
The province says it keeps the interest to help defray the $1.7 million cost of operating the Residential Tenancies Tribunal, formerly known as the office of the rentalsman.
A 'contribution' from tenants
Service New Brunswick said this week that landlords pay a fee on property tax bills to help fund the tribunal and to avoid a pro-landlord "bias," tenants are expected to contribute too.
"Rather than charge a fee for the use of the program, the interest is seen as a means for the tenant to also contribute towards the service without any out of pocket expense," Kim Snow, the province's chief residential tenancies officer, said in an email statement Wednesday.
But because the province can't track the interest, it has no way of measuring the tenant "contributions," Cole's email acknowledged on Thursday.
Snow refused to do an interview with CBC News.
In several other provinces, landlords must return security deposits when tenants move out as well as the interest those deposits earned.
New Brunswick is the only province where the money must be held in a government account.
Tenants can reclaim deposits anytime
It's not clear how much of the $24.3 million in 2015-16 was deposits from tenants who have moved out and who could have claimed the money they're entitled to.
Cole said Thursday there is no time limit on when a tenant can reclaim their deposit.
Larry Chippin, a Fredericton landlord, discovered during a court case that Service New Brunswick has unclaimed deposits from some of his former tenants dating back to 1986.
Service New Brunswick said earlier this week in a written statement that lawmakers decided the province should collect the money "to provide a level playing field to both parties."
The agency has been overseeing the fund since 2008-09, but the fund dates back to 1983, when the Residential Tenancies Act was passed.
In some other provinces, the landlord keeps the deposit or must put it into a bank account until the tenant moves out.
