Security Deposit Rules by State: What Landlords Need to Know in 2026
State-by-state security deposit limits, return deadlines, and itemization requirements for independent landlords — updated for 2026.
By Marlo · June 11, 2026 · 8 min read
Security deposits are where more landlord-tenant disputes originate than anywhere else. Miss the return deadline by one day and you may forfeit the entire deposit — even if the tenant caused thousands in damage. Know your state's rules cold.
The Four Things Every State Regulates
Every state's security deposit law covers four things:
- Maximum deposit amount — how much you can charge
- Holding requirements — where and how the deposit must be kept
- Return deadline — how long you have to return it after move-out
- Itemization requirements — what you must provide in writing if you make deductions
The consequences for violating these rules vary by state — from forfeiting the deposit to paying double or triple damages plus attorney fees.
Security Deposit Rules — Key States
Tennessee
Maximum: No cap — landlord may charge any amount
Holding: Must be in a separate bank account in URLTA counties (over 75,000 population). No separate account required in smaller counties, but recommended.
Return deadline: 30 days after move-out with itemization, or up to 60 days if written itemization is provided within 30 days
Penalty for violation: Tenant may recover the deposit plus damages
Texas
Maximum: No cap
Holding: No separate account required
Return deadline: 30 days
Penalty: Landlord liable for $100 plus 3x the wrongfully withheld amount plus attorney fees
Florida
Maximum: No cap
Holding: Must be in a separate non-interest-bearing account, OR post a surety bond, OR hold in an interest-bearing account with interest paid to tenant
Return deadline: 15 days if no deductions; 30 days with written notice of deductions
Penalty: Forfeiture of right to make deductions plus damages and attorney fees
Georgia
Maximum: No cap
Holding: Must be in a separate escrow account or post a surety bond
Return deadline: 30 days
Penalty: 3x the deposit amount plus attorney fees for bad-faith withholding
North Carolina
Maximum: 2 months rent for month-to-month or longer leases; 1.5 months for week-to-week
Holding: Must be in a trust account at a licensed financial institution, OR post a surety bond
Return deadline: 30 days (45 days if itemization is needed)
Penalty: Forfeiture of deposit plus damages
Virginia
Maximum: 2 months rent
Holding: Must be in a separate escrow account
Return deadline: 45 days
Penalty: Court may award damages and attorney fees
Ohio
Maximum: 2 months rent (first month); after first year, only 1 month
Holding: Must be in a separate account at a financial institution
Return deadline: 30 days
Penalty: Twice the deposit amount wrongfully withheld plus attorney fees
Indiana
Maximum: No cap
Holding: No separate account required
Return deadline: 45 days
Penalty: Landlord liable for deposit plus reasonable attorney fees
Kentucky
Maximum: No cap
Holding: Must be in a separate escrow account
Return deadline: 30 days (60 days if itemization is provided within 30 days)
Penalty: Actual damages plus attorney fees
Missouri
Maximum: 2 months rent
Holding: No separate account required
Return deadline: 30 days
Penalty: Twice the deposit amount wrongfully withheld
Arkansas
Maximum: 2 months rent
Holding: No separate account required
Return deadline: 60 days
Penalty: Actual damages
Mississippi
Maximum: No cap
Holding: No separate account required
Return deadline: 45 days
Penalty: Actual damages
What You Can Deduct
Regardless of state, the rules on deductions follow a consistent pattern:
You CAN deduct for:
- Unpaid rent or fees
- Cleaning beyond normal cleanliness
- Damage beyond normal wear and tear
- Broken or missing fixtures, appliances, or keys
- Unauthorized alterations
- Early termination fees if specified in the lease
You CANNOT deduct for:
- Normal wear and tear
- Pre-existing damage (document at move-in)
- Repainting for normal fading
- Carpet replacement for normal wear
- Minor scuffs or nail holes
The definition of "normal wear and tear" is where most disputes arise. A move-in inspection with photos — signed by both landlord and tenant — is the best evidence in any deposit dispute.
The Itemization Letter
When making deductions, every state requires a written itemized statement. Best practice regardless of state:
Include:
- Date of move-out
- Amount of deposit received
- Itemized list of every deduction with dollar amount
- Receipts or estimates for repair/cleaning costs
- Balance being returned (or statement that the full deposit is being applied to damages)
Send the itemization letter by certified mail with return receipt — you want proof the tenant received it.
The Move-In Inspection — Your Best Protection
The single most important thing you can do to protect yourself in a deposit dispute is a thorough move-in inspection:
- Walk the property with the tenant before they move in
- Document every existing condition — walls, floors, appliances, fixtures
- Take timestamped photos of every room
- Have the tenant sign the inspection report
- Give them a copy
At move-out, compare the move-out condition to the move-in report. Any damage beyond what was documented at move-in is attributable to the tenant.
Managing Security Deposits Automatically
TameRent tracks every security deposit, sends automatic reminders 5 days before the return deadline, and generates the itemization letter when you document deductions.