Maryland Security Deposit Law

Maximum Security Deposit Amount

Maximum amount: As of 2025, in most cases, landlords in Maryland cannot charge a security deposit that exceeds one month’s rent.

However, landlords can charge up to two months’ rent as a Maryland security deposit only if the tenant fulfills all three of the following conditions:

• The tenant qualifies for utility assistance from the Department of Human Services
• The tenant must make utility payments directly to the landlord rather than a third party
• The tenant and the landlord agree to the security deposit amount in writing

For more information on maximum security deposit amounts in Maryland, take a look at MD Code, Real Property § 8-203(b)(1) and MD Code, Real Property § 8-203(b)(2).

Pet deposits: Maryland landlord-tenant law does not limit the amount landlords can charge as a pet deposit. However, the pet deposit is considered part of the security deposit, which, as mentioned, generally cannot exceed one month’s rent in total.

Furthermore, under the federal Americans with Disabilities Act, landlords cannot charge a pet deposit for emotional support animals (ESAs) or service animals.

Penalties: If a landlord in Maryland charges a security deposit greater than legally allowed, the tenant may sue the landlord and recover an amount up to three times the extra amount charged and reasonable attorney’s fees (MD Code, Real Property § 8-203(3)).

Handling Damage Deposits

Like some other states, Maryland law requires landlords to collect and store security deposits in a specific manner. Landlords must adhere to the following statewide regulations to store tenant security deposits properly.

Security deposit storage: Within 30 days of receiving a security deposit in Maryland, the landlord must store it in a federally insured account to be used solely for this purpose. Alternatively, landlords may hold the security deposit as an insured certificate of deposit (MD Code, Real Property § 8-203 (d)(1-2); 1-101).

Interest-bearing account: Maryland landlords must store security deposits in an interest-bearing account. The amount of interest must be equal to either the U.S. Treasury curve rate or 1.5% per year, whichever is greater.

As long as the security deposit is more than $50, the tenant is entitled to receive that interest when the landlord returns the security deposit (MD Code, Real Property § 8-203 (h)(2)(iii)).

Receipt: Under Maryland landlord-tenant law, landlords must provide tenants with a detailed receipt for the security deposit. The receipt must include written information regarding Maryland security deposit laws, such as the tenant’s right to be present for the property inspection at the end of the tenancy and the right to receive an itemized statement of deductions. If the landlord fails to provide this receipt, the landlord must pay $25 to the tenant (MD Code, Real Property § 8-203.1).

Documentation: MD Code, Real Property § 8-203.1 requires landlords to maintain a copy of the security deposit receipt for at least two years after the tenant departs the rental unit. Also, landlords should maintain detailed records of all other documents related to the security deposit collection.

Although Maryland law does not explicitly require landlords to utilize a move-in checklist, these forms help prevent disputes between landlords and tenants. Move-in checklists detail the property’s condition when the tenancy starts, allowing landlords to track any property damages the tenant may have caused.

Ownership transfer: If the landlord sells the rental property, ownership of the security deposits and detailed information regarding each deposit and interest transfers to the new owner. The new owner is then responsible for returning security deposits and interest to tenants at the time tenancies end (MD Code, Real Property § 8-203 (d)(3)(i)).

Deductions

What landlords can deduct: Landlords cannot deduct funds from the security deposit to cover damages caused by normal wear and tear, which we’ll explain in further detail shortly.

However, landlords in Maryland can use security deposits to pay for repairing damages that exceed normal wear and tear, additional property cleaning requirements, and damages caused by smoking. Landlords can also use these funds to cover unpaid utilities and store abandoned tenant property if necessary.

Finally, while landlords can collect rent online, they may draw from security deposits if the tenant departs the dwelling unit with unpaid rent still outstanding (MD Code, Real Property § 8-203 (f)(1)(i)).

Reasons landlords cannot deduct: It is essential to note that landlords cannot deduct funds from security deposits to repair damages caused by ordinary wear and tear to the property (MD Code, Real Property § 8-203 (f)(1)(i)).

Generally speaking, ordinary wear and tear encompasses common, mainly cosmetic issues such as loose tiles, fading or chipped paint, and worn or faded carpet caused by typical use rather than negligence or action on the tenant’s part.

Return Timeline

Timeframe: Per Maryland security deposit laws, landlords must refund the security deposit, plus interest and minus any deductions made for the reasons outlined above, within 45 days of the tenant moving out of the dwelling unit (MD Code, Real Property § 8-203).

Deduction tracking: Should the landlord withhold any amount of the security deposit, Maryland security deposit law requires that the landlord provide the tenant with an itemized statement of deductions when they return the remainder of the deposit. The statement must include a thorough explanation of each deduction and receipts from completing the repair or copies of future repair estimates.

In the latter case, if the actual costs of the repair are less than the amount that was initially withheld from the deposit, the landlord must return the excess amount to the tenant within 30 days after completing the repair (MD Code, Real Property § 8-203(k)(3)).

Itemized deduction notification: Landlords must return the security deposit (as well as the itemized statement of deductions if needed) to the tenant via first-class mail (MD Code, Real Property § 8-203(g)(1)).

Penalties: If the landlord fails to comply with these requirements of Maryland security deposit law, the tenant may take legal action and receive up to three times the amount withheld, in addition to reasonable legal fees (MD Code, Real Property § 8-203 (e)(4)).

Handling Disputes

Move-in/move-out checklist: As mentioned above, Maryland law does not explicitly require landlords to utilize a move-in or move-out checklist. However, landlords typically use these forms to thoroughly document all aspects of the property’s condition, both when a tenant moves in and when they move out.

As part of this process, landlords may take photos and videos to serve as evidence of the property’s condition. The move-in and move-out checklists may also include detailed descriptions of certain aspects of the dwelling unit as needed.

Tenant challenge: If the tenant challenges how the landlord returns the security deposit or the amount withheld from the deposit, the landlord must first obtain and present proof to the contrary. However, if the tenant continues to press the issue or takes legal action against the landlord, the landlord should immediately seek civil legal assistance from a qualified attorney experienced in Maryland security deposit laws.