Maryland Security Deposit Rules: 2-Month Cap & Return Laws

Maryland enforces some of the strictest security deposit regulations in the country. From hard caps on the maximum amount to strict banking and interest requirements, landlords must adhere perfectly to the Real Property Article to avoid severe financial penalties.

Maximum Security Deposit Limit

In Maryland, a landlord cannot require a security deposit that exceeds the equivalent of two months' rent per dwelling, regardless of the number of tenants.

• Any pet deposit is considered part of the total security deposit, meaning the combination of the base deposit and pet deposit cannot exceed the two-month maximum.

If a landlord charges more than the permitted two months' rent, the tenant can recover up to three times the extra amount charged, plus reasonable attorney's fees.

Trust Account & Receipt Requirements

Landlords must provide tenants with a written receipt for the security deposit. This receipt must inform the tenant of their right to:

• Receive a written list of all existing damages if they request it via certified mail within 15 days of occupancy.
• Be present during the final move-out inspection if they request it in writing at least 15 days before moving.

Where the money is held: The security deposit must be deposited into a separate, interest-bearing account in a Maryland-based, federally insured financial institution within 30 days of receipt. It cannot be commingled with the landlord's personal or business funds.

Interest Requirements

If the landlord holds a security deposit of $50 or more for at least six months, they must pay interest on that deposit to the tenant.

Under current Maryland law, the interest must accrue at a rate based strictly on the daily U.S. Treasury yield curve rate for one year, as of the first business day of each year. The interest must be paid to the tenant when the deposit is returned at the end of the tenancy.

The 45-Day Return Deadline

A landlord has 45 days from the termination of the tenancy (which may differ from physical move-out in cases of abandonment or eviction) to return the security deposit, plus any accrued interest, to the tenant's last known address via first-class mail.

If the landlord makes deductions for damages, unpaid rent, or a breach of the lease, they must provide an itemized list of charges along with the remaining balance of the deposit within the same 45-day window.

Penalties for Withholding

If a landlord fails to return the deposit or the itemized list within 45 days, they automatically forfeit the right to withhold any part of the deposit for damages. Furthermore, the tenant may sue the landlord and recover up to three times the withheld amount, plus attorney's fees.

Staying Compliant Automatically

Calculating the exact U.S. Treasury yield curve rate for interest on move-out can be an administrative burden. Landager automates this calculation for Maryland properties, ensuring your 45-day return letters include mathematically perfect interest additions and itemized deduction ledgers.

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How Landager Helps

Landager tracks lease terms, payments, and compliance document dates - making it easy to stay compliant with Maryland regulations.

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