Security Deposit Law
What Maryland landlords must do with security deposits — the cap, interest, return deadline, account rules, and penalties — with citations to the statute itself.
Verified as of June 11, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
1 month's rent (since Oct. 1, 2024), with a narrow 2-month exception.
Interest
Yes — simple interest at the greater of the 1-year Treasury yield curve rate or 1.5% per year.
Return deadline
45 days after the end of the tenancy, with accrued interest.
A landlord 'may not impose a security deposit in excess of the equivalent of 1 month's rent per dwelling unit, regardless of the number of tenants' — lowered from two months by the Renters' Rights and Stabilization Act of 2024 (Ch. 124), effective October 1, 2024. A deposit of up to 2 months' rent is allowed only if the tenant qualified for utility assistance through the Department of Human Services, the lease requires utility payments directly to the landlord, and both parties agree in writing. Overcharging lets the tenant 'recover up to three times the extra amount charged, plus reasonable attorney's fees' (§ 8-203(b)(3)).
Md. Code, Real Prop. § 8-203(b) · 2024 Md. Laws ch. 124 (HB 693, Renters' Rights and Stabilization Act of 2024)
On return, the landlord owes 'simple interest which has accrued at the daily U.S. Treasury yield curve rate for 1 year, as of the first business day of each year, or 1.5% a year, whichever is greater.' Interest accrues at monthly intervals, is not compounded, is owed only if the deposit was held at least 6 months (no interest for any period less than a full month), and 'shall be payable only on security deposits of $50 or more.' The Department of Housing and Community Development maintains an online rate list/calculator that landlords are entitled to rely on (§ 8-203(m)-(n)).
'Within 45 days after the end of the tenancy, the landlord shall return the security deposit to the tenant together with simple interest..., less any damages rightfully withheld.' If anything is withheld, a written list of damages with an itemized cost statement must go to the tenant's last known address by first-class mail within the same 45 days (§ 8-203(g)(1)). A separate demand-triggered scheme applies to tenants who were evicted or abandoned the premises (§ 8-203(h)).
Deposits must be maintained 'in federally insured financial institutions... which do business in the State,' in in-state branches, in accounts 'devoted exclusively to security deposits' that bear interest; each deposit must be banked 'within 30 days after the landlord receives it' (§ 8-203(d)(1)). Alternatively, deposits may be held in insured certificates of deposit at in-state branches or in federal or Maryland government securities (§ 8-203(d)(2)). Deposits cannot be attached by the landlord's or tenant's creditors.
Withholding without a reasonable basis exposes you to 'an action of up to threefold of the withheld amount, plus reasonable attorney's fees' (§ 8-203(e)(4)); over-cap charges carry the same treble exposure on the excess (§ 8-203(b)(3)). Three forfeiture traps eliminate your right to withhold for damages entirely: failing to advise the tenant in writing of the subsection (f) inspection rights at the time the deposit is paid ('Failure by the landlord to comply with this requirement forfeits the right of the landlord to withhold any part of the security deposit for damages,' § 8-203(f)(1)(vii)), failing to send the 45-day itemized damage list (§ 8-203(g)(2)), and failing to send the damage list to an evicted/abandoning tenant who demands the deposit (§ 8-203(h)(3)). Failing to provide the written deposit receipt costs $25 (§ 8-203.1(c)).
Md. Code, Real Prop. § 8-203(b)(3), (e)(4), (f)(1)(vii), (g)(2), (h)(3) · Md. Code, Real Prop. § 8-203.1(c)
Maryland's security deposit rules in Real Prop. § 8-203 are statewide and cannot be waived in any lease (§ 8-203(l)). Counties and Baltimore City layer on separate landlord-tenant regimes — rental licensing and inspection programs, and in some jurisdictions (e.g., Montgomery and Prince George's Counties, Baltimore City) local landlord-tenant or rent stabilization ordinances — but the deposit cap, interest, holding, and return rules above come from state law. Check your county's rental licensing requirements before leasing.
'The landlord shall give the tenant a receipt for the security deposit as specified in § 8-203.1' and 'The receipt shall be included in a written lease' (§ 8-203(c)) — this is an affirmative requirement, not an option. The receipt must recite the tenant's seven statutory rights listed in § 8-203.1(a) (move-in and move-out inspection rights, the 45-day list and refund obligations, and the treble-damages warning), you must keep a copy for 2 years after the tenancy ends, and omitting it costs $25.
Md. Code, Real Prop. § 8-203(c) · Md. Code, Real Prop. § 8-203.1
'The tenant shall be advised of the tenant's rights under this subsection in writing at the time of the tenant's payment of the security deposit,' and 'Failure by the landlord to comply with this requirement forfeits the right of the landlord to withhold any part of the security deposit for damages' (§ 8-203(f)(1)(vi)-(vii)). The compliant § 8-203.1 receipt in the lease covers this — which is why skipping the receipt is so dangerous.
If the tenant gives certified-mail notice of intent to move at least 15 days before moving (with move date and new address), the tenant has the right to be present at the inspection, and 'the landlord shall notify the tenant by certified mail of the time and date when the premises are to be inspected.' The inspection must occur within 5 days before or after the tenant's stated move date (§ 8-203(f)(1)(ii)-(v)).
Every deposit must go into a federally insured institution doing business in Maryland within 30 days of receipt, in an in-state account devoted exclusively to security deposits that bears interest; insured CDs or government securities are the only alternatives (§ 8-203(d)).
If you withhold anything, send 'a written list of the damages claimed... together with an itemized statement of the cost incurred' by first-class mail to the tenant's last known address within 45 days of termination, or forfeit the right to withhold for damages (§ 8-203(g)). The itemized statement must include supporting documentation identifying materials or services; if you use an estimate, you must later send the final invoice and refund any excess within 30 days of completing repairs (§ 8-203(j)-(k)).
'No provision of this section may be waived in any lease' (§ 8-203(l)). Lease clauses purporting to shrink the interest obligation, the 45-day deadlines, or the inspection rights are void.
Since October 1, 2024 the cap is one month's rent (absent the narrow utility-assistance exception); the tenant may recover up to three times the extra amount charged plus reasonable attorney's fees, any time during the tenancy or within 2 years after it ends.
You forfeit the right to withhold any part of the deposit for damages — the statute's harshest trap — plus $25 liability for the missing receipt itself.
Md. Code, Real Prop. § 8-203(f)(1)(vi)-(vii) · Md. Code, Real Prop. § 8-203.1(c)
The statute requires you to 'notify the tenant by certified mail of the time and date when the premises are to be inspected'; informal notice doesn't satisfy § 8-203(f)(1)(iv) and undermines any damage withholding tied to that inspection.
Interest at the greater of the 1-year Treasury yield curve rate or 1.5% per year is part of the required return; shorting it without a reasonable basis feeds the same up-to-threefold remedy. Use the DHCD calculator, which § 8-203(n) entitles you to rely on.
Failure to send the list within 45 days forfeits the right to withhold for damages; the statute lets you send an estimate (with documentation) and true it up with the final invoice and a 30-day refund of any excess instead of waiting.
One month's rent per dwelling unit, regardless of the number of tenants — lowered from two months effective October 1, 2024 by the Renters' Rights and Stabilization Act (2024 Ch. 124). Up to two months is allowed only when the tenant qualified for utility assistance through the Department of Human Services, pays utilities directly to the landlord under the lease, and agrees to the amount in writing. Overcharging exposes you to up to three times the excess plus attorney's fees.
Yes, on deposits of $50 or more held at least 6 months. The rate is the greater of the daily U.S. Treasury yield curve rate for 1 year (as of the first business day of each year) or 1.5% per year, accruing at monthly intervals, simple (not compounded). DHCD maintains an official online calculator that § 8-203(n) entitles landlords to rely on.
45 days after the end of the tenancy, together with accrued interest, less any damages rightfully withheld. Withholding without a reasonable basis past 45 days gives the tenant an action for up to three times the withheld amount plus reasonable attorney's fees.
If the tenant requests by certified mail at least 15 days before moving (stating the move date and new address), they have the right to be present at the inspection. You must then notify the tenant by certified mail of the time and date of the inspection, which must occur within 5 days before or after the stated move date. Critically, the tenant must be advised of these rights in writing at the time they pay the deposit — failure forfeits your right to withhold any part of the deposit for damages.
In a federally insured financial institution doing business in Maryland, in an in-state branch account devoted exclusively to security deposits that bears interest, deposited within 30 days of receipt. Insured CDs at in-state branches or federal/Maryland government securities are the only alternatives.
Yes. The Renters' Rights and Stabilization Act of 2024 (HB 693, Ch. 124) cut the maximum deposit from two months' rent to one month effective October 1, 2024, added the narrow utility-assistance exception, and separately required every residential lease to include the Maryland Tenants' Bill of Rights. No 2025 or 2026 legislation has further amended § 8-203.
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Statute facts on this page were verified against the cited official sources on June 11, 2026.
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