Maryland Security Deposit Law

Maximum deposit

Landlords may not charge a security deposit of more than one month's rent per unit, except up to two months for a tenant receiving state utility assistance who pays utilities to the landlord by written agreement (Md. Code, Real Prop. § 8-203(b)). (Md. Code, Real Prop. § 8-203(b), 2024 Md. Laws ch. 124 (HB 693), Renters' Rights and Stabilization Act of 2024)

One month's rent per dwelling unit

Return deadline

Landlords must return the deposit with interest, less damages rightfully withheld, within 45 days after the tenancy ends (Md. Code, Real Prop. § 8-203(e)(1)). (Md. Code, Real Prop. § 8-203(e)(1))

Itemized statement of deductions

If any of the deposit is withheld, the landlord must mail a written list of damages with an itemized statement of costs and supporting documentation within 45 days after the tenancy ends (Md. Code, Real Prop. § 8-203(g), (j)). (Md. Code, Real Prop. § 8-203(g), (j))

Interest on the deposit

Landlords must pay simple interest on deposits of $50 or more held at least six months, at the greater of the one-year Treasury yield curve rate or 1.5% a year (Md. Code, Real Prop. § 8-203(e)(1)-(3)). (Md. Code, Real Prop. § 8-203(e))

Simple interest at the greater of the 1-year U.S. Treasury yield curve rate (as of the first business day of each year) or 1.5% a year; accrues monthly; only on deposits of $50+ held at least 6 months.

Penalty for wrongful withholding

A landlord who unreasonably fails to return the deposit within 45 days may owe up to three times the amount withheld plus attorney's fees, and loses the right to withhold for damages if no itemized list is sent (Md. Code, Real Prop. § 8-203(e)(4), (g)(2)). (Md. Code, Real Prop. § 8-203(b)(3), (e)(4), (g)(2))

Where the deposit is held

Maryland landlords must keep deposits in interest-bearing accounts used only for security deposits, at in-state branches of federally insured financial institutions (Md. Code, Real Prop. § 8-203(d)). (Md. Code, Real Prop. § 8-203(d))

Deposits must go into the account within 30 days of receipt, and the accounts in total must cover every deposit the landlord owes. Instead of accounts, a landlord may hold insured certificates of deposit at in-state branches or U.S. or Maryland government securities; deposits cannot be attached by the landlord's creditors.

Receipt or written notice of the deposit

A Maryland landlord must give a written deposit receipt, included in the written lease, that spells out the tenant's statutory deposit rights (Md. Code, Real Prop. §§ 8-203(c), 8-203.1, 8-208(c)(3)). (Md. Code, Real Prop. § 8-203(c), Md. Code, Real Prop. § 8-203.1, Md. Code, Real Prop. § 8-208(c)(3))

The receipt must explain the tenant's right to a move-in inspection, the move-out inspection procedure, the 45-day deadlines for the damage list and the refund, and the up-to-3x penalty. The landlord keeps a copy for 2 years and owes the tenant $25 for failing to provide one.

Move-in condition checklist

Maryland tenants may demand, by certified mail within 15 days after moving in, a joint inspection and a written list of damage already in the unit (Md. Code, Real Prop. § 8-203.1(a)(1)). (Md. Code, Real Prop. § 8-203.1(a)(1), Md. Code, Real Prop. § 8-203(i)(5))

The landlord must make the inspection and a written list of existing damages in the tenant's presence when the tenant asks by certified mail within 15 days of moving in. The tenant must be told of this right in the deposit receipt, and tenants who buy a surety bond have the same right (§ 8-203(i)(5)).

Pet deposits

In Maryland any pet deposit counts toward the one-month security-deposit cap, though monthly pet rent is not restricted (Md. Code, Real Prop. § 8-203(a)(3), (b)). (Md. Code, Real Prop. § 8-203(a)(3), (b))

A pet deposit is still a 'security deposit' (money held to protect against damage), so pet and regular deposits together may not exceed one month's rent (two months only in the utility-assistance exception). DHCD notes the 2024 law does not bar monthly pet fees or pet rent.

Nonrefundable fees

Maryland limits nonrefundable charges two ways: move-in costs cannot exceed the deposit plus first month's rent, and application fees over $25 must be refunded except for actual screening costs (Md. Code, Real Prop. §§ 8-208(d)(11), 8-213(b)). (Md. Code, Real Prop. § 8-208(d)(11), Md. Code, Real Prop. § 8-213(b)-(c), 2024 Md. Laws ch. 124 (HB 693))

Since Oct. 1, 2024 a lease may not require more than the deposit plus first month's rent to move in (§ 8-208(d)(11)). Landlords with 5+ units at one location who charge more than $25 in non-deposit application fees must refund the fees within 15 days of move-in or of a decision not to rent, keeping only actual credit-check and application costs, or owe twice the fees.

Small-landlord exemptions

Maryland's application-fee refund rule does not apply to landlords offering four or fewer units on one parcel or at one location, or to seasonal or condominium rentals (Md. Code, Real Prop. § 8-213(c)). (Md. Code, Real Prop. § 8-213(c), Md. Code, Real Prop. § 8-208(a))

The core deposit rules in § 8-203 (cap, escrow, receipt, interest, 45-day return) apply to every landlord. Separately, landlords with 5 or more units must use a written lease (§ 8-208(a)).

Deposit alternatives and installments

Maryland lets a tenant buy a surety bond in place of all or part of the deposit, but a landlord may not require one and need not accept one (Md. Code, Real Prop. § 8-203(i)). (Md. Code, Real Prop. § 8-203(i))

The bond can replace all or part of the deposit; the bond plus any deposit may not exceed two months' rent. The surety must give written disclosures (premium nonrefundable, not insurance for the tenant, tenant may have to reimburse). Before claiming, the landlord must send an itemized damage list at least 10 days in advance, and the tenant may pay directly instead. Bonds must come from an admitted carrier licensed by the Maryland Insurance Administration. Installments cannot be used to exceed the one-month cap.