Security Deposit Law
What Pennsylvania 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 10, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
Two months' rent in the first year of the lease; one month's rent from year two onward.
Interest
Only on deposits held more than two years. The landlord may keep 1% per year as an administrative fee; the rest belongs to the tenant.
Return deadline
30 days from lease termination or surrender and acceptance of the unit, whichever comes first.
Section 511.1 caps the escrow deposit at two months' rent during the first year and one month's rent during the second and subsequent years or any renewal. Once a tenant has been in possession five years or more, rent increases cannot trigger any increase in the security deposit, and a tenant cannot waive these limits.
Landlord and Tenant Act of 1951, § 511.1 (68 P.S. § 250.511a)
Section 511.2 is titled 'Interest on Escrow Funds Held More Than Two Years,' and subsection (c) states the section's provisions 'shall apply only after the second anniversary of the deposit of escrow funds.' Once that applies, the landlord may retain 1% per annum as administrative expenses and must pay the balance of interest to the tenant annually on the lease anniversary; § 511.1(c) also requires escrow funds 'together with interest' to be returned at the end of a tenancy that runs into a third or later year.
Landlord and Tenant Act of 1951, § 511.2 (68 P.S. § 250.511b) · Landlord and Tenant Act of 1951, § 511.1(c) (68 P.S. § 250.511a(c))
Within 30 days the landlord must deliver a written, itemized list of damages claimed and pay the difference between the deposit (plus any unpaid interest) and actual damages. The statute expressly lets the landlord keep deposit funds for nonpayment of rent or breach of any other lease condition. If the tenant fails to give the landlord a new address in writing on moving out, the landlord is relieved of liability under § 512.
Under § 511.2(a), deposit funds over $100 must be held in an escrow account at an institution regulated by the Federal Reserve Board, FHLBB, Comptroller of the Currency, or the PA Department of Banking, with written notice to the tenant of the bank's name and address and the amount held — but § 511.2(c) provides that 'the provisions of this section shall apply only after the second anniversary of the deposit of escrow funds,' so on the statute's literal text these duties attach only to deposits held past two years. Conservative practice is to escrow (and send the bank notice) from day one rather than tracking the anniversary. Alternatively, § 511.3 lets the landlord post a guarantee bond from a bonding company authorized to do business in Pennsylvania instead of depositing escrow funds.
Landlord and Tenant Act of 1951, §§ 511.2, 511.3 (68 P.S. §§ 250.511b, 250.511c)
Under § 512(b), failing to provide the written damage list within 30 days forfeits all rights to withhold any portion of the escrowed sums and to sue the tenant for damages to the premises. Under § 512(c), failing to pay the difference within 30 days makes the landlord 'liable in assumpsit to double the amount' by which the deposit (plus unpaid interest) exceeds actual damages, and the burden of proving actual damages is on the landlord. Tenants cannot waive these protections, but a tenant who never provides a written forwarding address relieves the landlord of § 512 liability.
Landlord and Tenant Act of 1951, § 512(b)-(e) (68 P.S. § 250.512)
We are not aware of any Pennsylvania city-level residential security-deposit cap, escrow, or return ordinance (including in Philadelphia or Pittsburgh); the Landlord and Tenant Act of 1951 supplies the deposit rules statewide. We did not verify every municipal code, so confirm locally before relying on this.
§ 511.1 limits the escrow deposit to two months' rent during the first year and one month's rent in the second and later years or renewals. After five years of possession, rent increases cannot increase the deposit, and tenants cannot waive any of this.
§ 511.2(a) requires deposit funds over $100 to sit in an escrow account at a regulated banking institution, with written notice to the tenant of the bank's name and address and the amount — and § 511.2(c) limits these duties to deposits held past their second anniversary. Escrowing from day one is the conservative way to never miss that trigger; § 511.3 allows a guarantee bond from an authorized Pennsylvania bonding company as an alternative.
§ 512(a) requires a written list of claimed damages within 30 days of lease termination or surrender and acceptance, whichever is first, accompanied by payment of the difference between the deposit (plus unpaid interest) and actual damages. The same subsection preserves your right to apply the deposit to unpaid rent or any other lease breach.
After the second anniversary of the deposit, § 511.2(b) entitles you to keep 1% per annum as administrative expenses and obligates you to pay the balance of earned interest to the tenant each year on the lease anniversary.
§ 512(e) relieves the landlord of liability under § 512 if the tenant fails to provide a new address in writing on termination or surrender. Make the written forwarding address part of your move-out checklist so the 30-day clock and double-damages exposure are well defined.
Under § 512(b) you forfeit all rights to withhold any portion of the deposit AND the right to sue the tenant for damages to the premises — even legitimate damage claims are lost.
§ 512(c) makes you liable for double the amount by which the deposit (plus unpaid interest) exceeds actual damages, and the burden of proving those damages is on you, not the tenant.
Once a deposit has been held past its second anniversary, § 511.2 requires the funds to be in a regulated escrow account with written notice of the bank's name, address, and amount (unless you post a § 511.3 bond) — commingling at that point violates the section. Escrowing from day one avoids ever tripping the two-year trigger.
§ 511.1 voids these demands: deposits cannot exceed one month's rent from year two onward, and after five years of possession rent increases cannot increase the deposit at all. Waivers in the lease are unenforceable.
Up to two months' rent during the first year of the lease, and no more than one month's rent during the second and subsequent years or any renewal (68 P.S. § 250.511a). Once a tenant has been in possession five years or more, you cannot increase the deposit when you raise the rent.
30 days from lease termination or from surrender and acceptance of the unit, whichever happens first. Within that window you must deliver a written, itemized list of claimed damages and pay back the difference between the deposit (plus any unpaid interest) and your actual damages (68 P.S. § 250.512).
No. The § 512 list must cover damages for which the tenant is actually liable, and the landlord bears the burden of proving actual damages in court — over-withholding risks double damages. The deposit does secure more than physical damage, though: § 512(a) expressly preserves the landlord's right to keep deposit funds for nonpayment of rent or breach of any other lease condition.
Only on deposits held more than two years. After the deposit's second anniversary, § 250.511b entitles the landlord to keep 1% per year as an administrative fee and requires the rest of the earned interest to be paid to the tenant annually on the lease anniversary.
By the statute's literal terms, the escrow requirement applies to deposits held past two years: § 250.511b requires funds over $100 to be in an escrow account at a regulated bank with written notice to the tenant of the bank's name, address, and amount held, and subsection (c) says the section applies 'only after the second anniversary of the deposit.' Many landlords escrow from day one as conservative practice, and § 250.511c allows a guarantee bond instead of escrow.
If the tenant fails to provide a new address in writing upon termination or surrender of the lease, § 250.512(e) relieves you of liability under the deposit-return section. Still document the move-out and keep the itemized list ready — the relief depends on the tenant's failure being genuine and documented.
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 10, 2026.
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