Overview
Maryland has detailed security deposit laws that provide significant protections for tenants. The state caps deposits at two months' rent, requires landlords to hold deposits in separate accounts, mandates interest payments, and imposes a 45-day return timeline. Maryland's laws are among the more comprehensive in the country regarding deposit handling.
This guide covers everything landlords and tenants need to know about security deposits in Maryland.
Deposit Limits
Maryland law limits security deposits to a maximum of 2 months' rent. This cap applies to most residential rental units.
Additional Requirements
- Landlords must hold the deposit in a separate account at a Maryland financial institution
- The deposit may not be commingled with the landlord's personal funds
- Landlords must provide a written receipt that includes the amount of the deposit, the name and address of the financial institution, and a summary of the tenant's rights
- Landlords must pay simple interest on the deposit at the rate of 3% per year (or the daily U.S. Treasury yield curve rate, whichever is higher) if the deposit is held for more than six months
cite: Md. Code, Real Prop. § 8-203
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 that exceeds ordinary wear
- Cleaning: Costs to restore the unit to the same level of cleanliness as at move-in
- Breach of lease: Costs directly related to a breach of the lease agreement
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
Damage beyond normal wear and tear includes:
- Large holes in walls
- Stained or burned carpet
- Broken windows or fixtures
- Damage caused by pets or negligence
Return Timeline
Landlords must return the security deposit within 45 days of the tenant vacating the unit or the termination of the lease, whichever occurs later. The return must include:
- The remaining deposit amount (if any deductions were made), plus accrued interest
- An itemized written statement listing each deduction and the amount
If the landlord fails to return the deposit or provide the required documentation within 45 days, the tenant may be entitled to recover up to three times the amount wrongfully withheld plus reasonable attorney's fees.
cite: Md. Code, Real Prop. § 8-203(e)
Pre-Move-Out Inspection
Maryland law requires landlords to provide a move-in checklist documenting the condition of the unit before the tenant takes possession. While there is no statutory requirement for a pre-move-out inspection, the move-in checklist serves as the baseline for determining whether damage occurred during the tenancy.
Tenants are encouraged to:
- Complete and retain a copy of the move-in checklist
- Document the condition of the unit with photos at move-in and move-out
- Request a walk-through with the landlord before turning over the keys
- Keep copies of all communication regarding the deposit
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 with an itemized explanation
- File a claim in Small Claims Court (District Court, for amounts up to $5,000)
- Contact Maryland Legal Aid or another legal aid organization for assistance
If the landlord acts in bad faith by failing to return the deposit or provide the required itemized statement, the court may award the tenant up to three times the amount wrongfully withheld plus reasonable attorney's fees. This treble damages provision makes Maryland one of the more punitive states for landlord noncompliance.