Maryland security deposit law

A Maryland landlord may not charge a security deposit of more than one month's rent per dwelling unit, no matter how many tenants live there. A security deposit is any payment meant to protect the landlord against nonpayment of rent or damage, and it includes last month's rent paid in advance.

Md. Code, Real Prop. § 8-203(a), (b)

• You may charge up to two months' rent if the tenant has qualified for utility assistance through the Department of Human Services, the lease has the tenant pay for utility service directly to you, and you both agree in writing to the deposit amount. Md. Code, Real Prop. § 8-203(b)(2)
• A tenant charged more than the limit may recover up to three times the extra amount, plus reasonable attorney's fees. Md. Code, Real Prop. § 8-203(b)(3)
• A lease may not require the tenant to pay more than the security deposit and the first month's rent to start the lease and move in. Md. Code, Real Prop. § 8-208(d)(11)
• You may not require a tenant to buy a surety bond in place of a deposit, and you do not have to accept one; the section sets separate rules when a tenant buys a bond instead of paying all or part of the deposit. Md. Code, Real Prop. § 8-203(i)

Within 45 days after the tenancy ends, you must return the deposit with the interest it has earned, less any damages rightfully withheld. If you keep any part for damages, you must send the tenant, by first-class mail to the last known address within the same 45 days, a written list of the damages with an itemized statement of the costs.

Md. Code, Real Prop. § 8-203(e)(1), (g)

• If you do not send the itemized list on time, you lose the right to withhold any part of the deposit for damages. Md. Code, Real Prop. § 8-203(g)(2)
• The itemized statement must include documentation of the materials or services. You may use an estimate, but then you must tell the tenant in writing when the repairs are done, include the final invoice, and refund any amount withheld above the actual cost within 30 days after completing the repairs. Md. Code, Real Prop. § 8-203(j), (k)
• A landlord who fails to return the deposit without a reasonable basis can owe up to three times the amount withheld, plus reasonable attorney's fees. Md. Code, Real Prop. § 8-203(e)(4)
• Section 8-203(h) addresses eviction or ejectment for a lease breach, or abandonment, before the tenancy ends. The tenant may demand return by first-class mail within 45 days and provide a new address. Within 45 days of receiving that notice, send the required itemization and return the balance with interest, subject to lawful withholding. Md. Code, Real Prop. § 8-203(h)
• A lease term that waives these deposit rules is void. Md. Code, Real Prop. § 8-203(l)
• Withholding may cover unpaid rent, actual breach losses or tenant-related damage beyond ordinary wear. A deposit is not an automatic breach charge, and replacement rent reduces claimed future-rent losses. Compare dated condition records, photos and repair evidence before charging for painting, cleaning or replacement. Md. Code, Real Prop. § 8-203(f)

Within 30 days of receiving it, you must put the deposit in an interest-bearing account used only for security deposits at a Maryland branch of a federally insured financial institution, or hold it in insured certificates of deposit or certain government securities. The deposit earns simple interest at the one-year U.S. Treasury yield curve rate as of the first business day of the year, or 1.5 percent a year, whichever is greater.

Md. Code, Real Prop. § 8-203(d), (e)

• Interest accrues at monthly intervals, is not owed for a partial month, is not owed unless you held the deposit for at least six months, and applies only to deposits of $50 or more. It is paid with the deposit at the end of the tenancy. Md. Code, Real Prop. § 8-203(e)
• The Department of Housing and Community Development keeps the yearly rates, or a calculator, on its website, and you may rely on it. Md. Code, Real Prop. § 8-203(m), (n)
• The lease must contain a receipt for the deposit with the notices the law lists. Keep a copy for two years after the tenancy ends; a landlord who gives no written receipt owes the tenant $25. Md. Code, Real Prop. § 8-203(c) Md. Code, Real Prop. § 8-203.1(b), (c) Md. Code, Real Prop. § 8-208(c)(3)
• On transfer, provide the deposit and an accounting of original amount/date, applicable rates and tenant contact. The transferor remains liable for amounts not delivered with that accounting; successors also have statutory return liability. Reconcile funds and records at closing. Md. Code, Real Prop. § 8-203(d)(3)–(4)

If the tenant asks by certified mail within 15 days of moving in, you must inspect the home with the tenant and make a written list of damage that already exists. At the end, a tenant who tells you by certified mail at least 15 days before moving, with the move date and a new address, has the right to be present at your move-out inspection.

Md. Code, Real Prop. § 8-203.1(a) Md. Code, Real Prop. § 8-203(f)

• On receiving the tenant's notice, you must tell the tenant by certified mail the time and date of the move-out inspection, which must fall within five days before or after the tenant's stated move date. Md. Code, Real Prop. § 8-203(f)
• If you did not tell the tenant in writing, when the deposit was paid, about the right to be present at the move-out inspection, you lose the right to withhold any part of the deposit for damages. Md. Code, Real Prop. § 8-203(f)
• These notices belong in the deposit receipt that the lease must include. Md. Code, Real Prop. § 8-203.1(a) Md. Code, Real Prop. § 8-208(c)(3) See Deposit account and interest on the Maryland page