Overview
Indiana's security deposit laws are relatively straightforward. The state does not cap the amount a landlord may charge, but it does establish clear rules regarding the return timeline and the landlord's obligations for itemizing deductions. Indiana's 45-day return period is one of the longer timelines in the country.
This guide covers everything landlords and tenants need to know about security deposits in Indiana.
Deposit Limits
Indiana has no statutory limit on the amount a landlord may charge as a security deposit. Landlords are free to set any amount they consider appropriate. In practice, most landlords charge between one and two months' rent.
There is no separate statutory cap for pet deposits or other specialized deposits in Indiana.
Allowable Deductions
Landlords may deduct from the security deposit for the following reasons:
- Unpaid rent: Any rent owed at the time of move-out
- Damage beyond normal wear and tear: Repairs for tenant-caused damage to the property
- Cleaning: Costs to restore the unit to its move-in condition
- Unpaid utility charges: If the lease requires the tenant to pay utilities and there is an outstanding balance
- Other lease obligations: Any other charges permitted under the terms of the lease
What Constitutes Normal Wear and Tear?
Normal wear and tear includes:
- Minor scuffs on walls
- Small nail holes from hanging pictures
- Worn carpet from regular use
- Faded paint due to sunlight exposure
Damage beyond normal wear and tear includes:
- Large holes in walls or doors
- Stained, burned, or torn carpet
- Broken windows or fixtures
- Pet damage to flooring, walls, or doors
Return Timeline
Landlords must return the security deposit within 45 days of the termination of the tenancy and the tenant vacating the unit. The return must include:
- The remaining deposit amount (if any deductions were made)
- An itemized list of damages claimed by the landlord
- The estimated or actual cost of repairing each item of damage
If the landlord fails to return the deposit or provide the required documentation within 45 days, the tenant may recover the entire deposit amount plus reasonable attorneys' fees.
Dispute Resolution
If a tenant believes their deposit was wrongfully withheld, they can:
- Send a demand letter to the landlord requesting the return of the deposit
- File a claim in Small Claims Court (up to $8,000 in Indiana)
- Seek attorneys' fees: If the court finds the landlord wrongfully withheld the deposit, the tenant may recover the deposit amount plus reasonable attorneys' fees
- File a complaint with the Indiana Attorney General's Consumer Protection Division
Tenants should document the condition of the unit at both move-in and move-out with photographs and written records to support any potential claims.