Maine Security Deposit Law: What Renters & Property Managers Need to Know

Quick Reference: Maine Security Deposit Compliance Checklist

Maximum deposit: 2 months’ rent for most tenants, but only 1 month’s rent for tenants aged 62 or older—one of the few states with senior-specific protections.

Separate account required: You must hold deposits in a separate, interest-bearing account at a Maine financial institution and disclose this in writing to the tenant.

Interest payments: If you hold the deposit for more than one year, you must pay the earned interest to the tenant.

Return deadline: You have 30 days after the tenancy ends to return the deposit if there is a written rental agreement, or 21 days if there is not. Miss this deadline and you’re exposed to double damages plus attorney fees.

Itemized deductions required: Any withholding must be accompanied by an itemized list of deductions.

Double damages for violations: Wrongfully withhold a deposit and you could owe twice the amount wrongfully withheld, plus the tenant’s attorney fees.

Pro tip for property managers: Maine’s separate account requirement, interest calculations, and senior tenant protections make manual deposit management risky. Rentable automates security deposit compliance, tracks interest obligations, and ensures you never miss Maine’s strict deadlines—even across multiple properties.

Introduction: Why Maine Security Deposit Law Matters

Security deposits in Maine serve as financial protection for landlords while ensuring tenants receive fair treatment regarding their rental payments and potential damages. The state enforces strict regulations to govern their collection, storage, and return.

Maine security deposit law applies to most residential rental units, and both Maine landlords and Maine renters should understand their rights and obligations under their rental agreement or lease agreement.

Maine’s security deposit laws are governed by Maine Revised Statutes Title 14, §6031–6038. These laws establish clear rules for how landlords must collect, hold, and return security deposits to protect tenants from unfair practices. 

The laws set strict limits on the amount landlords may charge, mandate storage requirements, and define penalties for non-compliance. Following these rules ensures fair treatment for both parties and helps landlords avoid costly legal trouble.

This guide covers:

• How much landlords can charge
• Storage requirements for deposits
• Return deadlines and allowable deductions
• Penalties for non-compliance
• How modern property managers stay compliant

Related Statute:Me. Rev. Stat. Title 14, §6031–6038

For the most current information on Maine security deposit laws and recent updates, consult the 2025 Maine Security Deposit Laws guide.

Maine Security Deposit Limits & Storage Requirements

Maximum Security Deposit: 2 Months’ Rent (1 Month for Seniors)

Landlords may not charge more than two months’ rent as a security deposit for most tenants. However, Maine provides special protection for senior tenants: for tenants aged 62 or older, the maximum is one month’s rent.

This applies to:

• Unfurnished units
• Furnished units
• Single-family homes
• Multi-family properties
• All lease types (month-to-month and long-term)

Example: If your monthly rent is $1,200, your maximum allowable security deposit is $2,400 for tenants under 62, or $1,200 for tenants 62 and older.

What about pet deposits? Maine treats pet deposits as part of the overall security deposit limit. You cannot stack a $2,400 security deposit and a $500 pet deposit on top—the total cannot exceed the statutory maximum based on the tenant’s age.

This senior protection provision makes Maine unique. Property managers must track tenant ages and apply the correct deposit cap accordingly. Manual tracking across dozens or hundreds of units creates exposure if you accidentally overcharge a senior tenant.

Law Reference: Me. Rev. Stat. Title 14, §6038(2) – Treatment of Security Deposits

Storage Requirements: Separate, Interest-Bearing Account Mandated

Unlike many states, Maine requires landlords to hold security deposits in a separate, interest-bearing account at a financial institution located in Maine.

This means:

• You cannot commingle deposits with operating funds
• The account must earn interest
• The institution must be located in Maine (out-of-state banks don’t comply)
• You must provide written disclosure to the tenant with the name of the institution, and, if requested by the tenant, the account number where the deposit is being held

Why this matters:

Property managers who mix deposit funds with their operating accounts are violating Maine law from day one, even if they maintain perfect records. This isn’t a “best practice” recommendation—it’s a legal requirement with teeth.

Audit risk: If you face a dispute or legal claim, failure to maintain a separate Maine account exposes you to double damages and attorney fees.

Accounting complexity: Managing separate interest-bearing accounts for multiple properties requires precise tracking of which deposits are in which accounts, when they were deposited, and how much interest each tenant is owed.

Tenant notification requirement: Within a reasonable time after receiving the deposit, you must provide written disclosure to the tenant stating the name of the institution where the deposit is being held. If the tenant requests it, you must also provide the account number. Failure to provide this disclosure violates Maine law.

For property managers handling deposits across multiple Maine properties, maintaining compliant security deposit accounts becomes a significant operational burden without automation.

Law Reference:Me. Rev. Stat. Title 14, §6038(2) – Treatment of Security Deposits

Interest Payment Requirement

Maine requires landlords to pay interest earned on the security deposit to the tenant if the deposit is held for more than one year.

This creates additional compliance obligations:

• Track the exact date each deposit was received
• Calculate interest earned on each deposit annually
• Pay accrued interest to tenants who remain in the unit beyond one year
• Account for interest when processing refunds for tenants who stay long-term

Common mistakes:

• Forgetting to pay interest to long-term tenants (triggers violation)
• Using a non-interest-bearing account (violates the storage requirement)
• Calculating interest incorrectly or failing to track it per tenant
• Not separating interest obligations across multiple tenants in the same account

For property managers with high tenant turnover, the interest requirement may not impact many deposits. But for stable, long-term rental properties, tracking and paying interest across dozens of tenants becomes complex fast.

Law Reference: Me. Rev. Stat. Title 14, §6038(2) – Treatment of Security Deposits

Security Deposit Collection: Documentation Requirements

Maine’s security deposit law emphasizes transparency and documentation from the moment deposits are collected. Tenants should provide written notice for important communications, such as move-out or lease termination, to ensure proper documentation and legal compliance. Here’s what property managers must do:

If any deductions are made from the security deposit, landlords are required to provide a written statement itemizing each deduction. This written statement must be sent to the tenant’s last known address within the timeframe specified by law. Failure to provide a written statement itemizing deductions can result in penalties for the landlord.

Written Disclosure of Account Location

Maine law requires landlords to disclose in writing the name of the institution where the security deposit is being held. This disclosure must be provided to the tenant within a reasonable time after receiving the deposit.

What to include in your written disclosure:

• Name of the financial institution
• Statement that the deposit is held in a separate, interest-bearing account
• Confirmation that interest will be paid if the deposit is held over one year
• Property address and lease details

For added legal protection and proof of delivery, landlords or tenants may wish to send important written disclosures or notices using certified mail.

Why this matters:

Tenants have the right to know where their money is being held. Failure to provide written disclosure can be used against you in disputes and may result in penalties if the landlord is found to be in violation of Maine’s security deposit statutes.

Move-In Condition Documentation: Critical for Deductions

While Maine law does not explicitly require landlords to provide a move-in condition report, documenting the unit’s condition at move-in is essential for protecting yourself against disputes when you need to make deductions.

Move-in checklist best practices:

• Conduct a joint walkthrough with the tenant
• Document every room with timestamped photos or video
• Note existing damages in writing (e.g., “scuffed baseboard in living room, small stain on bedroom carpet”)
• Have the tenant sign the condition report
• Have the landlord sign the condition report to acknowledge its accuracy
• Provide the tenant with a copy

Failure to provide documentation: Without detailed move-in documentation, you will lose nearly every deduction dispute in small claims court. Judges consistently side with tenants when landlords cannot prove the damage didn’t exist at move-in.

Law Reference: Me. Rev. Stat. Title 14, §6031–6038

Security Deposit Returns & Allowable Deductions

This is where Maine security deposit law gets serious—and where most property managers expose themselves to penalties.

When the lease ends, the landlord must return the unused portion of the security deposit to the tenant within 30 days (or 21 days if the tenant was evicted). The deposit covers the rental unit, and landlords may only retain the entire security deposit under specific legal circumstances, such as when the tenant owes unpaid rent or has caused damage beyond normal wear and tear.

Allowable deductions landlords can make from the security deposit include unpaid rent, damages to the rental unit, utility charges, and a reasonable cleaning fee to restore the property to its original condition. 

Any landlord charge for repairs, cleaning, or other fees must be reasonable and based on the actual cause for withholding funds. The landlord is required to provide an itemized list specifying the actual cause for each deduction.

If only part of the deposit is withheld, the landlord must return the unused portion to the tenant. Failure to comply with these requirements can result in legal penalties for the landlord.

30-Day Return Deadline (21 Days Without Written Lease)

Landlords must return the security deposit within 30 days after the end of the tenancy. If there is no written lease, the deadline is shortened to 21 days.

What counts as the end of tenancy?

• The lease termination date
• The date the tenant surrenders possession of the unit
• The date keys are returned and the unit is available for inspection

The return deadline is triggered by the later of the lease termination date or the date the tenant surrenders possession, whichever occurs last.

Common mistakes that trigger penalties:

• Assuming you have 30 days when there’s no written lease (it’s actually 21)
• Waiting for the final utility bill before processing the refund (not an excuse under Maine law)
• Mailing the check on day 31 (the deposit or itemized statement must be delivered or postmarked within the deadline)
• Starting the clock from the wrong date (move-out vs. lease end)

Miss this deadline—even by one day—and you could owe double damages plus the tenant’s attorney fees.

Law Reference: Me. Rev. Stat. Title 14, §6033(2)

Itemized Statement Required for All Deductions

If you’re withholding any portion of the security deposit, Maine law requires you to provide a written statement itemizing all deductions to the tenant within the return deadline.

The written statement itemizing deductions must include:

• What you’re deducting for (e.g., “carpet cleaning,” “repair of damaged door”)
• The cost of each deduction
• Supporting documentation (receipts, invoices, before/after photos)

Permissible Deductions

Maine allows landlords to withhold portions of the deposit for:

✅ Unpaid rent✅ Damages beyond normal wear and tear✅ Other lease violations (e.g., unauthorized pets, smoking in non-smoking unit) ✅ Cleaning costs if the unit wasn’t returned in the same condition (excluding normal wear) ✅ Repair costs for tenant-caused damage

What Landlords Cannot Deduct

Maine law does not allow deductions for:

❌ Normal wear and tear (faded paint, minor scuffs, worn carpet from normal use). Minor damages such as small scuffs or faded paint are considered normal wear and cannot be deducted. ❌ Pre-existing damage not documented at move-in ❌ Improvements or upgrades to the property ❌ Routine maintenance (replacing air filters, lawn care) ❌ General cleaning if the unit was left in reasonably clean condition

The burden of proof is on the landlord. If you can’t prove the damage was caused by the tenant (through move-in photos, lease violations, or other documentation), you can’t deduct it.

Law Reference: Me. Rev. Stat. Title 14, §6033(2)

Interest Payments & Documentation Requirements

Maine’s requirement to pay interest on deposits held over one year creates unique compliance challenges for property managers. Upon lease termination, the landlord must provide the tenant with full payment of any remaining security deposit and interest owed, along with an itemized statement justifying any amounts withheld.

When Interest Must Be Paid

If a security deposit is held for more than one year, the landlord must pay the tenant any interest earned on that deposit.

Key considerations:

• Calculate interest from the date the deposit was received
• Pay interest annually or upon lease termination (whichever comes first)
• Use the actual interest rate earned on the account (typically savings account rates)
• Document all interest payments for your records

Example: A tenant signs a lease on January 15, 2024 with a $1,800 deposit held in an account earning 2% annual interest. If the tenant remains through January 15, 2025, you owe approximately $36 in interest. If the tenant stays another year, you owe interest on the original deposit plus any accumulated interest.

Move-Out Documentation Best Practices

Maine law doesn’t explicitly mandate a pre-move-out inspection, but conducting one protects both parties:

Pre-move-out inspection benefits:

• Allows tenants to address minor issues before final walkthrough
• Reduces disputes over deductions
• Provides clear expectations for both parties
• Creates additional documentation trail

Final walkthrough documentation:

• Take photos/video of every room
• Note any damages beyond normal wear
• Compare to move-in condition report
• Document cleaning status
• Record meter readings (if applicable)

Failure to provide documentation: If landlords do not provide sufficient documentation to support deductions, courts will typically order return of the full deposit plus penalties.

Law Reference: Me. Rev. Stat. Title 14, §6031–6038

Penalties for Mishandling Security Deposits

Double Damages for Wrongful Withholding

If a landlord wrongfully withholds a deposit or fails to return it within the required time frame, the tenant may be entitled to twice the amount wrongfully withheld.

What constitutes wrongful withholding:

• Missing the 30-day (or 21-day) deadline
• Failing to provide an itemized statement of deductions
• Making deductions for normal wear and tear
• Deducting for damages not documented at move-in
• Not holding the deposit in a compliant separate account
• Failing to pay required interest

Example: You withhold $800 from a $1,800 deposit for carpet damage, but you didn’t document the carpet’s condition at move-in. The tenant sues and wins. You now owe $1,600 (double the wrongfully withheld $800) plus you must return the $800, for a total of $2,400—more than the original deposit.

Attorney Fees

Maine courts may also award reasonable attorney fees to the tenant if the landlord is found to be in violation of security deposit laws.

This means if a tenant hires a lawyer to recover their deposit and wins, you’re paying their legal fees on top of double damages. For a $1,800 deposit dispute, you could end up paying:

• $1,800 (original deposit returned)
• $1,800 (double damages)
• $2,500+ (tenant’s attorney fees)
• Your own attorney fees

Total exposure: $6,000+ on an $1,800 deposit.

Legal Recourse for Tenants

Maine tenants who believe their deposit was wrongfully withheld can:

• File a small claims court action (for amounts under $6,000)
• File a district court action (for amounts over $6,000 or when seeking attorney fees)
• Contact Maine’s Attorney General’s Consumer Protection Division
• Pursue double damages plus attorney fees

Law Reference: Me. Rev. Stat. Title 14, §6034

How Rentable Solves Maine Security Deposit Compliance

Managing security deposits manually in Maine creates substantial operational and legal risk. Between separate account requirements, interest calculations, senior tenant protections, and strict deadlines, property managers need systems that eliminate compliance gaps.

Rentable’s automated account management tracks when the security deposit is deposited and ensures compliance with Maine security deposit law.

For digital returns, Rentable enables landlords to pay tenants directly any refunds owed, including providing itemized statements for any deductions.

Rentable also helps manage security deposit transfers when a property is sold to a new owner, ensuring all legal obligations are met.

Automated Account Management & Reconciliation

Rentable replaces spreadsheets and manual tracking with automated account management:

• Separate account compliance: Automatically segregate deposits by property and tenant
• Interest calculation: Track deposit hold periods and calculate interest obligations automatically
• Senior tenant tracking: Flag tenants over 62 and apply correct deposit limits
• Institution disclosure: Generate required written disclosures with institution names

Always-Updated Compliance

Maine’s security deposit laws can change. Rentable’s platform adapts automatically:

• Deadline tracking updates if statutes change
• Interest calculation rules adjust to new requirements
• Document templates stay current with legal standards
• Audit trails maintain compliant record-keeping

Digital, Documented Returns Process

Rentable generates itemized statements in minutes, not hours:

• Automated itemization: Create compliant deduction statements with line-item details
• Receipt attachment: Link invoices, photos, and documentation to each deduction
• Deadline alerts: Never miss Maine’s 30-day (or 21-day) return window
• Audit-ready records: Maintain complete documentation trail for every deposit

Guided Communications & Dispute Defense

When disputes arise, Rentable provides:

• Complete documentation timeline (move-in photos, lease terms, communications)
• Itemized deduction justifications with supporting evidence
• Proof of timely return and proper notice
• Account statements showing compliant separate account storage

Scalable, Low-Admin Workflow

As your Maine portfolio grows, Rentable scales effortlessly:

• Manage deposits across hundreds of units in multiple Maine locations
• Track interest obligations for long-term tenants automatically
• Generate required disclosures in bulk
• Maintain separate account compliance without manual reconciliation

Property managers using Rentable can offer flexible payment plans while maintaining full compliance with Maine’s strict requirements—improving both the tenant experience and operational efficiency.

Local Ordinances & Additional Considerations

While Maine state law governs most security deposit requirements, property managers should be aware of potential local ordinances that may impose additional requirements:

Maine security deposit law generally applies to most dwelling units, but there are exceptions. For example, the law may not apply to properties with no more than 5 dwelling units, including those occupied by the landlord.

Special rules may apply to mobile home parks and mobile home tenants, including specific deposit limits, interest requirements, and dispute resolution procedures that differ from standard rental units.

Additionally, when a rental property is sold or transferred, there are specific legal procedures regarding the handling and transfer of security deposits to the new owner.

City-Specific Rules

Some Maine municipalities may have additional tenant protection ordinances. Always verify local requirements in:

• Portland
• Bangor
• Augusta
• Lewiston
• Other cities where you operate

Tax Reporting for Retained Deposits

When you retain a portion of a security deposit for legitimate deductions, consider the tax implications:

• Retained deposits may be considered taxable income in the year received
• Interest earned on deposit accounts is taxable income to the landlord (unless paid to tenant)
• Consult with a tax professional for proper reporting

Financial Considerations for Property Managers

Maine’s separate account requirement and interest obligations create cash flow considerations:

• You cannot use deposit funds for operating expenses (unlike states allowing commingling)
• Interest payments reduce your net deposit return at lease end
• Maintaining multiple separate accounts may incur banking fees

Key Takeaways

Maine security deposit law provides strong tenant protections with strict requirements for landlords and property managers. Compliance isn’t optional—violations result in double damages plus attorney fees.

For Property Managers:

• Maximum deposit is 2 months’ rent (or 1 month for tenants 62+)
• Deposits must be held in separate, interest-bearing Maine accounts with written disclosure
• Return deposits within 30 days (or 21 days without written lease)
• Provide itemized deductions for any amounts withheld
• Pay interest on deposits held over one year
• Document move-in condition meticulously to defend deductions
• Wrongful withholding triggers double damages plus attorney fees

For Renters:

• You have the right to written disclosure of where your deposit is held
• Landlords must pay interest if your deposit is held over one year
• Deposits must be returned within 30 days (21 without written lease)
• Any deductions must be itemized with supporting documentation
• You can sue for double damages plus attorney fees if your deposit is wrongfully withheld
• Tenants 62 and older have lower maximum deposit limits

By understanding and following Maine security deposit laws, landlords can avoid costly legal issues, and tenants can ensure their rights are protected. For any legal disputes or questions about Maine security deposit law, it is recommended to consult a qualified attorney to ensure compliance and protect your interests.

Modern property management requires systems that eliminate manual compliance gaps. Rentable’s security deposit automation handles separate account management, interest calculations, deadline tracking, and itemization—so you can focus on growing your portfolio instead of managing spreadsheets.

Book a demo to see how Rentable protects Maine property managers

Related Resources

• Security Deposit Compliance Laws: Complete State-by-State Guide
• Security Deposit Accounts for Property Managers
• Security Deposit Payment Plans: Implementation Guide

Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.