Delaware security deposit law

For a rental agreement of one year or more, a security deposit may not exceed one month's rent. For a month-to-month tenancy or one with no set term, the one-month limit applies once the tenancy has lasted a year, and you must then immediately credit the tenant any deposit above one month's rent (unless federally assisted housing regulations provide otherwise). The limits do not apply to furnished rental units.

25 Del. C. § 5514(a)

• Section 5514 sets no limit for a fixed-term lease shorter than a year. 25 Del. C. § 5514(a)
• A pet deposit is separate and may not exceed one month's rent, whatever the length of the lease. You may not require any pet deposit for a duly certified and trained support animal of a disabled resident. 25 Del. C. § 5514(i)
• A tenant may choose to buy a surety bond instead of paying all or part of the deposit, but you cannot require one and do not have to accept one. A bond plus any cash deposit may not exceed one month's rent, except as 5514(a)(3) allows. 25 Del. C. § 5514A(b), (d)
• If the lease says so, you may raise the deposit along with the rent. An increase of more than 10 percent of the monthly rent must be spread over the lease term, or over four months for a month-to-month tenancy. 25 Del. C. § 5514(j)
• You may not charge any nonrefundable fee as a condition of occupancy, except an optional service fee for actual services such as a pool fee. 25 Del. C. § 5311 See Application and screening fees on the Delaware page

Within 20 days after the rental agreement ends, return any deposit you are not entitled to keep. If you keep any of it for damage, send the tenant within the same 20 days an itemized list of damages with the estimated cost of repair for each, and pay the difference. If you send no list, you are treated as acknowledging that nothing is owed for damages.

25 Del. C. § 5514(e), (f)

• The deposit may cover damage beyond normal wear and tear (or that painting and ordinary cleaning cannot fix), unpaid rent including late charges and rent due for a premature termination or abandonment, and reasonable costs of renovating and re-renting after a premature termination. After an early termination under 5314, those re-renting costs are capped at one month's rent. 25 Del. C. § 5514(c)
• If the tenant accepts a payment sent with the itemized list, the tenant agrees to the damages unless the tenant objects in writing within 10 days of receiving it. 25 Del. C. § 5514(f)
• Failing to return the deposit, or the balance after the listed damages, within 20 days entitles the tenant to double the amount wrongfully withheld. 25 Del. C. § 5514(g)(1)
• Send the deposit and notices to the tenant's address in the lease or to a forwarding address the tenant gave in writing at or before the end of the tenancy. If the tenant gives no address, you are relieved of the notice duty and the double penalty, but you still owe any unused deposit if the tenant claims it in writing within one year. 25 Del. C. § 5514(h)
• A pet deposit follows the same account, 20-day and penalty rules, and pet damage comes out of the pet deposit first. 25 Del. C. § 5514(i)(1)
• When a sole tenant dies, the 20 days run from when you get possession back (or from the end of any storage of the tenant's property), and the deposit goes to the estate's representative. 25 Del. C. § 5719(d)

Keep each security deposit in an escrow account designated as a security deposits account at a federally insured bank with an office in Delaware that accepts deposits, do not use it in any business, and tell the tenant where the account is. The Landlord-Tenant Code does not require you to pay interest on the deposit.

25 Del. C. § 5514(b)

• If you fail to deposit the money in such an account, or fail to disclose its location within 20 days of the tenant's written request, the deposit is forfeited to the tenant, and failing to return it in full within 20 days of the forfeiture entitles the tenant to double the deposit. 25 Del. C. § 5514(g)(2)
• The tenant's claim to the deposit comes before any of your creditors, including a bankruptcy trustee, even if the money was mixed with other funds. 25 Del. C. § 5514(b)
• Chapters 51, 53, 55 and 57 were read in full; none requires interest on a security deposit. 25 Del. C. chapter 51 25 Del. C. chapter 53 25 Del. C. chapter 55 25 Del. C. chapter 57

Delaware's Landlord-Tenant Code does not require a move-in condition checklist or joint inspection. The only inspection it requires before renting is a visual check of the unit for bed bugs. At move-out, deductions still need the itemized list of damages with estimated repair costs within 20 days.

25 Del. C. chapter 51 25 Del. C. chapter 53 25 Del. C. chapter 55 25 Del. C. chapter 57 25 Del. C. § 5317(a)

• Deductions may not cover normal wear and tear or anything painting and ordinary cleaning can correct, so a dated record of the unit's condition at move-in helps you show what changed. 25 Del. C. § 5514(c)(1) See Returning the deposit on the Delaware page