Security Deposit Grant must be a reasonable amount

MSD must be satisfied that the amount of a Security Deposit Grant a supplier or provider requires is reasonable. When considering what amount a client’s Security Deposit Grant should be, MSD uses the following general guidelines:

General guidelines on what is a reasonable security deposit

Supplier/Provider	Reasonable security deposit
Emergency housing supplier e.g. hostels or motels, when an Emergency Housing Grant has been granted to the client for emergency accommodation.	7 times the nightly rate of the accommodation that has been granted.
Transitional and contracted emergency housing providers.	Up to $1,000.

For emergency housing, the security deposit is generally based on 7 times the nightly rate of the accommodation for which an Emergency Housing Grant has been granted, even for longer grants of more than 7 nights.

For example an Emergency Housing Grant granted for 21 nights should still have a security deposit of no more than 7 times the nightly rate of the accommodation.

When general guidelines for amount of security deposit grant can be exceeded

The amount of a security deposit grant for emergency housing, which is generally based on 7 times the nightly rate of the accommodation for which the Emergency Housing Grant has been granted, can be exceeded in some circumstances.

Example MSD may be unable to find an emergency housing supplier that will take the client without a higher security deposit amount. In these circumstances, MSD may grant a security deposit of more than 7 times the nightly rate.

Note the amount of a security deposit cannot be increased after the original date it was approved, unless the cost of the client’s emergency housing accommodation has increased during the clients stay in emergency housing. The client must be advised of and agree to the new security deposit grant amount.

Claim paid during a client's stay

If part of a security deposit is paid during a client's stay, for example, to fix a broken window, the security deposit will be reduced by that amount, and the remaining amount will be available for the rest of the client's stay.

The amount of a security deposit would generally not be increased back to the original amount approved at the beginning of the client's stay, unless the provider will not allow the client to remain in the accommodation with the reduced security deposit, and there are no other suitable options available for the client.

If the amount of security deposit is increased, the client must agree to the new amount.

Damage or loss is above the amount approved for the security deposit

When the value of the damage or loss is above the amount approved for the security deposit, the provider may seek:

reimbursement of the remainder directly from the client (this may involve taking the client to the Disputes Tribunal) or
compensation from their insurance company

If you are unsure about the level of security deposit that is reasonable for a certain situation, talk to a manager.

Example 1

A client has been granted an Emergency Housing Grant to cover 7 nights in a motel at $140 per night.

The case manager advises the motel that a security deposit of $980 could be paid. The motel agrees and a Security Deposit Grant is approved for this amount.

Example 2

A client has been granted an Emergency Housing Grant to cover 15 nights in a motel at $140 per night.

The case manager advises the motel that a security deposit of $980 could be paid (based on 7 times the nightly rate, even though the client's grant is for 15 nights). The motel agrees and a Security Deposit Grant is approved for this amount.

Example 3

A client with 1 child has been granted an Emergency Housing Grant to cover 7 nights in a motel at $980. This is the client's second placement in a motel, as they were evicted for recklessly damaging the property at their previous emergency housing accommodation.

The new supplier is prepared to let the client stay but is aware $1,500 worth of damage occurred at the last motel. The client has no other accommodation options and a Security Deposit Grant is approved for $1,500.

Example 4

A client and their partner have been accepted into transitional housing. The provider requests a security deposit for the couple before they can stay.

The case manager advises the provider a security deposit of $1,000 can be approved. The provider agrees and a Security Deposit Grant is approved for this amount.

Example 5

A client's children caused significant damage to the motel room they were staying in. The Security Deposit Grant of $880 that was approved at the start of the client's stay was paid in full to the supplier for the cost of the damage. Now, the supplier will only accept the client and their children for a further stay with a higher security deposit.

When granting the next Emergency Housing Grant for 7 nights' accommodation, the case manager advises the provider that a new security deposit of $1,500 can be approved. The provider agrees and accepts to extend the stay for the client and their children.

Example 6

A client was accepted into transitional housing on 1 November and a Security Deposit Grant was approved for $1,000. On 5 November, the provider made a claim against the security deposit for $200 to fix a broken window, which was granted and paid on the client's behalf. This means that when the client checks out on 10 November, the amount of security deposit available to be claimed by the provider is $800.

When the client was checking out, the provider identified damages of $1,000, which the client agreed to.

A security deposit payment can only be granted for $800, which is the amount remaining from the original amount approved at the beginning of the client's stay, and the provider will need to follow up the remaining $200 directly with the client or through their insurance company.