Overview
Maryland’s security deposit laws are governed by the Maryland Code, Real Property § 8-203. These laws establish clear standards for the amount a landlord may charge, how the deposit must be held, and the process for returning it to tenants.
The law also requires landlords to pay interest on security deposits and imposes penalties for failing to follow the rules. Tenants and landlords alike should understand these protections and responsibilities to ensure fair handling of deposits.
This guide covers:
How much landlords can charge
Where deposits must be stored
Interest and return requirements
Penalties for non-compliance
Related Statute: Md. Code, Real Prop. § 8-203
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords may not charge more than two months’ rent as a security deposit.
Storage requirements: Deposits must be held in a federally insured financial institution licensed to do business in Maryland. The account must be exclusively for security deposits.
Written receipt: Landlords must provide a written receipt for the deposit, which can be included in the lease.
Law Reference: Md. Code, Real Prop. § 8-203(b)-(e)
2. Security Deposit Returns & Allowable Deductions
Return deadline: The security deposit must be returned within 45 days after the end of the tenancy.
Permissible deductions: Landlords may deduct for unpaid rent, damage beyond normal wear and tear, and any breach of the lease agreement.
Itemized statement required: An itemized list of deductions, along with any remaining portion of the deposit, must be mailed to the tenant’s last known address.
Law Reference: Md. Code, Real Prop. § 8-203(g)
3. Interest Payments & Documentation Requirements
Interest payments: Landlords must pay simple interest on deposits at a rate of 1.5% per year or the U.S. Treasury yield curve rate, whichever is higher. Interest must be paid for any tenancy longer than six months.
Move-in condition report: Tenants have the right to request an inspection at move-in and again at move-out.
Law Reference: Md. Code, Real Prop. § 8-203(e)(4), (i)
4. Penalties for Mishandling Security Deposits
Triple damages: If a landlord withholds a deposit in bad faith, they may be liable for up to three times the amount wrongfully withheld, plus reasonable attorney fees.
Failure to provide receipts or interest: Landlords who do not comply with notice or interest rules may also be penalized.
Law Reference: Md. Code, Real Prop. § 8-203(e)-(j)
Key Takeaways
Maryland caps security deposits at two months’ rent.
Landlords must store deposits in a separate, insured account and provide written receipts.
Deposits must be returned within 45 days, with interest and an itemized list of any deductions.
Bad-faith withholding of a deposit may result in triple damages and attorney fees.
By following Maryland’s rules, landlords can stay in compliance and tenants can ensure their deposits are returned fairly and on time.
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.
