Connecticut Security Deposit Laws

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Connecticut for advice specific to your situation. Information last verified: March 2026.

Connecticut enforces some of the strictest security deposit regulations in the United States. Landlords must navigate specific deposit caps based on a tenant's age, strict escrow account requirements, and mandatory annual interest payments on the funds held.

Failure to follow the procedures outlined in Connecticut General Statutes § 47a-21 can result in severe penalties, including the landlord being liable for double damages.

Statutory Limits on Security Deposits

The maximum amount a landlord can charge for a residential security deposit in Connecticut depends entirely on the age of the tenant.

The "Turn 62" Rule: If a tenant paid a two-month security deposit at the start of their tenancy and later turns 62 during their lease, the tenant has the right to request the return of the amount exceeding one month's rent. The landlord must refund that portion upon receipt of the request.

Escrow and Interest Requirements

Connecticut law prohibits landlords from commingling tenant security deposits with their personal or business operating funds.

The Escrow Account

The landlord must deposit the security deposit into a dedicated escrow account at a financial institution located within Connecticut. The landlord must provide the tenant with written notice containing the name and address of the financial institution and the amount deposited within 30 days of receiving the funds.

Paying Annual Interest

Landlords must pay interest on a tenant's security deposit.

• The interest rate is not stationary; it is calculated and published annually by the Connecticut Banking Commissioner.
• The landlord must pay the accrued interest to the tenant every year on the anniversary of the lease signing (often credited toward the next month's rent).
• If the tenant is late on rent by more than ten days in any given month, the landlord is not required to pay interest for that specific month (unless the lease includes an active late fee applied to the balance).

Returning the Security Deposit

When a tenancy ends, the landlord faces a strict statutory deadline for returning the deposit and any unpaid accrued interest.

The Timeline

The landlord must return the full deposit, or provide a written, itemized statement of damages and the remaining balance, within:

• 30 days after the tenant moves out, OR
• 15 days after receiving the tenant's written forwarding address, whichever is later.

Permissible Deductions

Landlords may deduct funds from the security deposit for:

• Unpaid rent or utility charges.
• Damage to the property that exceeds normal wear and tear.
• Costs associated with the tenant breaking the lease early (if applicable).

If deductions are made, the landlord must provide a detailed list explaining the exact nature of the damage and the cost of repair.

Penalties for Non-Compliance

If a landlord fails to return the deposit or the itemized statement within the required statutory timeframe, the landlord forfeits the right to withhold any money for damages. Furthermore, the tenant can sue the landlord, and the court may award the tenant twice the original value of the security deposit.

How Landager Helps Connecticut Landlords

Calculating fluctuating state-mandated interest rates and tracking tenant ages for deposit caps is historically a nightmare for Connecticut landlords. Landager simplifies this process. Our ledger software allows you to strictly separate escrow funds, automatically calculates the Connecticut Banking Commissioner's annual interest rate to issue automatic rent credits on lease anniversaries, and triggers 30-day alerts when a tenant moves out to ensure you never face double-damage penalties.

Back to Connecticut Landlord-Tenant Laws Overview.