Kentucky Security Deposit Laws: Limits, Deadlines, Penalties
Complete guide to Kentucky security deposit laws under KRS 383.580, including holding requirements, move-in checklists, and return timelines.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
Official Law Citation: KRS 383.580
Since its admission to the Union on June 1, 1792, Kentucky has developed specific property laws. Today, Kentucky's security deposit rules are codified in KRS 383.580 as part of the Uniform Residential Landlord and Tenant Act (URLTA). Notably, these provisions—effective July 13, 1984—only apply in cities and counties that have formally adopted them. These rules require landlords to hold deposits properly, provide move-in documentation, and return deposits within strict timelines - or face forfeiture penalties.
No Statutory Cap
Kentucky law places no limit on how much a landlord can charge for a security deposit. In practice, most landlords charge one to two months' rent.
Holding Requirements
Landlords must hold security deposits in a separate account at a federally insured financial institution (bank or lending institution) regulated by the Commonwealth of Kentucky or the United States government. This account must be used only for security deposits. Before accepting a deposit, the landlord must provide the prospective tenant with written notice of:
- The location of the financial institution.
- The account number of the separate account.
Move-in Checklist Requirement
When a security deposit is collected in a URLTA-adopting jurisdiction, the landlord must provide a comprehensive listing of then-existing damage to the unit before accepting the deposit. Upon termination of occupancy, the landlord must again inspect the premises and compile a list of damages and estimated repair costs. Both landlord and tenant must sign these lists, though the tenant has the right to dissent in writing. These documents are mandatory; failure to provide both the move-in and move-out lists forfeits the landlord's right to retain any portion of the deposit for damages.
Return Deadlines
Kentucky law does not set a fixed number of days for the initial return of a deposit. Instead, it establishes specific windows for claiming or applying funds:
If a tenant is due a refund, the landlord must send notification to the tenant's last known address. If the tenant does not respond to claim the funds within 60 days, the landlord may retain the deposit.
Permitted Deductions Landlords may deduct for:
- Unpaid rent (subject to the 30-day demand window if the tenant vacates owing rent).
- Damage beyond normal wear and tear - provided the required move-in and move-out lists were completed.
- Costs of non-compliance with the lease agreement.
Deductions for normal wear and tear are not permitted.
Penalties for Non-Compliance
If the landlord fails to use a separate bank account or fails to provide the required move-in and move-out damage lists:
- The landlord forfeits the right to retain any portion of the security deposit for damages (KRS 383.580(5)).
- The tenant may sue for the return of the deposit in District Court.
No Interest Required
Kentucky does not require landlords to pay interest on security deposits.
How Landager Helps
Landager tracks deposit holding accounts, move-in checklist completion, and return deadlines - automatically alerting you when the 30-day window begins and ensuring you maintain documentation for every deduction.
Sources & Official References
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