Delaware Security Deposit Law

Maximum deposit

For leases of one year or more, landlords may not require a security deposit above one month's rent, and month-to-month tenants must be credited any excess over one month after a year; furnished units are exempt (25 Del. C. § 5514(a)). (25 Del. C. § 5514(a), (i); § 5514A(d))

One month's rent for leases of one year or more, and for month-to-month or open-ended tenancies once they have lasted one year; no cap for furnished units; separate pet deposit up to one month's rent

Return deadline

Landlords must return the deposit, or send an itemized list of damages with any balance, within 20 days after the lease ends or terminates (25 Del. C. § 5514(e), (f)). (25 Del. C. § 5514(e), (f), (h))

Itemized statement of deductions

A landlord keeping any of the deposit must give an itemized list of damages with estimated repair costs within 20 days, or is treated as acknowledging that nothing is owed (25 Del. C. § 5514(f)). (25 Del. C. § 5514(f))

Interest on the deposit

Delaware law does not require landlords to pay interest on security deposits, but deposits must be held in a separate escrow account at a federally insured bank with an office in Delaware (25 Del. C. § 5514(b)). (25 Del. C. § 5514(b) (escrow account; silent on interest))

Penalty for wrongful withholding

A landlord who does not return the deposit or balance within 20 days owes the tenant double the amount wrongfully withheld (25 Del. C. § 5514(g)(1)). (25 Del. C. § 5514(g))

Where the deposit is held

Delaware landlords must park every security and pet deposit in an escrow account at a federally insured bank that has a deposit-taking office in Delaware (25 Del. C. § 5514(b), (i)(1)). (25 Del. C. § 5514(b), (g)(2), (i)(1))

The account must be designated a security deposits account at a federally insured bank with a Delaware office that accepts deposits, and may not be used in the landlord's business; pet deposits follow the same rule. Failing to use such an account forfeits the whole deposit to the tenant, and double the deposit is owed if it is not then returned within 20 days.

Receipt or written notice of the deposit

A Delaware landlord must tell the tenant where the security-deposit account is located, and ignoring a written request for that information for 20 days forfeits the deposit (25 Del. C. § 5514(b), (g)(2)). (25 Del. C. § 5514(b), (g)(2))

The statute requires disclosure of where the account is held but does not prescribe a written receipt for the deposit itself. If the landlord does not disclose the account location within 20 days of a tenant's written request, the deposit is forfeited to the tenant.

Move-in condition checklist

Delaware's deposit statute does not require a move-in inspection or condition checklist, though deductions are limited to damage beyond normal wear and tear (25 Del. C. § 5514(c)). (25 Del. C. § 5514 (no move-in inspection requirement))

Pet deposits

Delaware landlords may take a separate pet deposit of up to one month's rent regardless of lease length, but none for a certified support animal of a disabled resident (25 Del. C. § 5514(i)). (25 Del. C. § 5514(i))

The pet deposit is separate from and in addition to the security deposit, follows the same escrow, 20-day return and double-damages rules, and pet damage must be charged against it first. It may not be charged for a certified, trained support animal of a disabled resident.

Nonrefundable fees

Apart from optional amenity fees such as a pool or tennis-court fee, a Delaware landlord may not charge any nonrefundable fee as a condition of occupancy (25 Del. C. § 5311). (25 Del. C. § 5311, 25 Del. C. § 5514(d))

Only optional service fees for amenities the tenant chooses (the statute's examples are pool and tennis-court fees) may be nonrefundable. A capped, receipted application fee (greater of 10% of monthly rent or $50) is separately allowed under § 5514(d).

Small-landlord exemptions

Delaware does not exempt small landlords, but furnished units escape the deposit cap and short nonrenewable beach-area rentals of 120 days or less are outside the Landlord-Tenant Code (25 Del. C. §§ 5514(a)(4), 5102(4)). (25 Del. C. § 5514(a)(4), 25 Del. C. § 5102(4))

There is no exemption by number of units or owner-occupancy. Furnished units are exempt from the one-month cap, and nonrenewable rentals of 120 days or less per year in the Broadkill, Lewes-Rehoboth, Indian River, Baltimore and Cedar Creek Hundreds (coastal Sussex County) fall outside the Landlord-Tenant Code entirely.

Deposit alternatives and installments

A Delaware tenant may buy a surety bond in place of all or part of the deposit if the landlord agrees, and a new owner must honor an existing bond (25 Del. C. § 5514A). (25 Del. C. § 5514A, 25 Del. C. § 5311)

The landlord need not accept a bond and may not require one; the bond plus any cash deposit may not exceed one month's rent, the surety must make written disclosures (including that the premium is nonrefundable), and the tenant may pay a claim directly or have the cash deposit used first. Bonds must come from an admitted carrier licensed by the Delaware Department of Insurance.