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Maryland security deposit process

Last updated: Apr 29, 2015

What’s the deal with security deposit laws in Maryland?

In the state of Maryland, the law states that landlords or property managers can’t charge more than two months’ rent for a security deposit, no matter how many tenants are on the lease. Doing so can cost you dearly, as one hapless landlord found out.

A student who rented in a room in a house in College Park discovered his landlord had charged him a security deposit of $900, twice the legal amount. Authorities eventually ruled in the student’s favor, awarding him a generous graduation gift of $2,700, three times the amount of his $900 deposit.

Clearly, the state of Maryland takes security deposit violations seriously. Many Maryland leases state that the landlord must give tenants, if they ask for it in writing, a list of existing damages to the rental unit within 15 days of moving in. Failure to do so can trigger a penalty as harsh as that for overcharging for a deposit: three times the amount of the deposit (minusless unpaid rent or damages).

Do landlords need to charge tenants a security deposit in Maryland?

It’s an excellent idea, because you never know how responsible tenants are until they’ve lived under your roof. In Maryland, security deposits offer protections some other states do not. For example, security deposits not only safeguard landlords against damage to their rental units, they also protect against nonpayment of rent and any costs that result from tenants’ violations of the lease.

What are the limits on rental deposits in Maryland?

A security deposit cannot be more than two months’ rent, no matter how many tenants are listed on the lease.

For example: for a Baltimore apartment that rents for $1,300/month, landlords cannot ask for more than $2,600 as the deposit.

Do landlords need to provide a receipt for a security deposit?

Yes. A landlord must give a tenant a receipt for a deposit or include the receipt within the language of the lease. Failure to do so results in a penalty of $25.

Does the money need to be kept in a separate account to allow it to accrue interest?

Yes. Within 30 days of receiving the security deposit, the landlord must deposit the money into an escrow account at a federally insured bank that does business in the state of Maryland.

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When returning a security deposit of $50 or more, the landlord also must provide the tenant with simple annual interest of 1.5 percent or the U.S. Treasury Daily Yield Curve Rate, whichever is higher.

What can security deposit money be used for?

Security deposits can be used to pay for any damages that exceed normal wear and tear. Considered a cost of doing business, wear and tear includes things like worn carpets, small holes from hanging pictures, and walls that need repainting.

Deposits also can be used to cover:

  • Nonpayment of rent
  • Costs resulting from breaches of a lease

What is the deadline to return a security deposit in Maryland?

The security deposit (minus the cost of cleaning or repairs, if applicable) must be returned to the renter no later than 45 days after the tenant moves out.

Do landlords need to notify renters of security deposit money used to fix damages?

Yes. Landlords must send tenants a written list of all the damages and the costs to fix them by first-class mail within 45 days after the end of the lease. Landlords who fail to do so give up the right to withhold any deposit funds to repair damages.

In cases where a landlord evicts a tenant, or the tenant abandons the rental property before the lease ends, the tenant has 45 days to ask for the return of the security deposit. Landlords who don’t return the deposit within 45 days of the request (along with simple, annual interest of 3 percent minus funds withheld for damages) may be subject to a penalty of three times the amount of the security deposit.

Where can I learn more about Maryland Security Deposit laws?

If you have any questions, or think you may want to learn more about security deposit laws in Maryland, please consult a lawyer.

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Disclaimer: The materials on this database provide general information related to the law and are intended to provide a layman’s summary of the law. The information provided does not constitute legal advice and the manager of this database is not a law firm. These materials are intended, but cannot be promised or guaranteed to be current, complete or up-to-date. All of the information offered are intended for general informational purposes only. You should not act or rely on any of the information contained on this database without first seeking the advice of a qualified attorney.

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