Security Deposit Law
What Tennessee 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
No statutory cap — Tennessee does not limit how much you can charge.
Interest
No. Tennessee does not require landlords to pay interest on security deposits.
Return deadline
No fixed return deadline — but a 60-day unclaimed-deposit rule and a 30-day damage-discovery cutoff apply.
Tennessee's security deposit statute regulates how deposits are held, itemized, and disposed of, but sets no maximum amount. Market practice and the lease govern the deposit size.
Section 66-28-301 requires deposits to be kept in a dedicated account but says nothing about interest. Any interest the account earns is not statutorily owed to the tenant unless the lease says otherwise.
Tennessee sets no specific number of days to return a deposit. If the tenant leaves owing no rent with a refund due, the landlord must send notification of the refund amount to the tenant's last known or reasonably determinable address; if the tenant does not respond within 60 days of that notice, the landlord may remove the deposit from the account and keep it free of the tenant's claim (§ 66-28-301(f)). Separately, additional physical damage may be charged only if discovered before the earlier of 30 days after the tenant vacated/abandoned or 7 days after a new tenant takes possession (§ 66-28-301(g)). Note: the Uniform Residential Landlord and Tenant Act, including this section, applies only in counties with population over 75,000 per the 2010 federal census (§ 66-28-102(a)).
Tenn. Code Ann. § 66-28-301(f), (g) · Tenn. Code Ann. § 66-28-102(a)
Deposits must be held in an account used only for security deposits, at a bank or lending institution regulated by the state or a federal agency. You must also tell tenants the location of that account when they sign the lease and pay the deposit (the account number itself is not required). Failure to use a compliant account, combined with failure to provide the damage listing, costs you the right to retain any of the deposit.
Under § 66-28-301(c), a landlord may not retain any portion of the deposit if it was not held in the required dedicated account and an itemized damage listing was not provided. Tenants who dissented from the damage listing can sue in circuit or general sessions court over the disputed items. Tennessee's statute imposes no multiplier or fixed statutory penalty beyond loss of the deposit claim.
None. In covered counties the URLTA expressly occupies and preempts the entire field of landlord-tenant regulation, and county governments may not enact conflicting or additional rules (Tenn. Code Ann. § 66-28-102(e), as amended by 2021 Tenn. Acts ch. 182). No Nashville or Memphis deposit ordinances apply.
Section 66-28-301 and the rest of the Uniform Residential Landlord and Tenant Act apply only in counties with more than 75,000 residents under the 2010 federal census (this covers metro counties like Davidson, Shelby, Knox, Hamilton, Rutherford and others). In smaller counties, the lease and general common law govern deposits.
Hold all deposits in an account used only for that purpose at a regulated bank or lending institution, and tell each tenant where the account is located when they sign the lease and pay the deposit. You do not have to give the account number.
Before charging the deposit for damage, the landlord must compile a comprehensive listing of ascertainable damage with estimated repair costs, and the tenant generally has a right to a mutual inspection. Signatures on the listing are conclusive evidence of its accuracy; a tenant who refuses to sign must specify dissented items in writing, and may only sue over those items.
The tenant has no right to inspect if they vacated without written notice, abandoned the unit, were judicially removed, never responded to the inspection notice, failed to appear at the arranged inspection, or never requested a mutual inspection / are inaccessible. In those cases the landlord inspects alone but must mail the damage listing on the tenant's written request.
When a tenant leaves owing nothing with a refund due, send written notice of the refund amount to their last known or reasonably determinable address. If they do not respond within 60 days of the notice, you may remove the deposit from the account and keep it.
You can recover the cost of physical damage discovered after the move-out inspection only if you found it before the earlier of 30 days after the tenant vacated/abandoned, or 7 days after a new tenant took possession. After that window, late-discovered damage cannot be charged.
Violates § 66-28-301(a); if you also failed to provide the itemized damage listing, subsection (c) bars you from retaining any portion of the deposit at all.
The listing is the statutory basis for any charge against the deposit; without it (and a compliant account) you lose the right to retain the deposit, and disputed charges collapse in general sessions court.
It is a damage-discovery cutoff, not a refund deadline — Tennessee sets no fixed day count for returning deposits. Conflating the two leads landlords either to rush unnecessary forfeitures or to miss the real rule: damage found later than 30 days after vacancy (or 7 days after a new tenant moves in) cannot be charged.
Subsection (f) lets you retain an unclaimed deposit only after you have sent notice of the refund amount to the tenant's last known or reasonably determinable address and received no response for 60 days; skipping the notice leaves the tenant's claim alive.
Since January 1, 2025 (Public Chapter 907), URLTA landlords must disclose in writing, at or before the start of the tenancy, the name and address of the managing agent and of an owner/agent for service of process and notices, plus a phone number or email for maintenance or an online landlord-tenant portal; this applies to agreements entered, amended, or renewed on or after that date.
Tenn. Pub. Ch. 907 (2024) (HB 1814), amending Tenn. Code Ann. § 66-28-302(a)
No. Tennessee law sets no cap on the security deposit amount. The statute (Tenn. Code Ann. § 66-28-301) controls how you hold, itemize, and dispose of the deposit, not how much you charge.
Tennessee sets no fixed return deadline. If the tenant leaves owing nothing, you must send notice of the refund due to their last known address; if they don't respond within 60 days you may keep the unclaimed deposit. Practically, refund promptly — damage you discover more than 30 days after the tenant vacates (or 7 days after a new tenant moves in, if earlier) can't be charged against the deposit. (Tenn. Code Ann. § 66-28-301(f)-(g))
Yes — in counties where the URLTA applies, deposits must sit in an account used only for security deposits at a state- or federally-regulated bank or lending institution, and you must tell the tenant the location of the account (not the number) at lease signing. Failing the account rule plus failing to provide a damage listing forfeits your right to keep any of the deposit. (Tenn. Code Ann. § 66-28-301(a), (c), (h))
No. Section 66-28-301 requires a dedicated account but does not require it to bear interest or that any interest be paid to the tenant.
No. The Uniform Residential Landlord and Tenant Act, including the deposit statute, applies only in counties with more than 75,000 residents under the 2010 federal census — the metro counties such as Davidson (Nashville), Shelby (Memphis), Knox, and Hamilton. In smaller counties your lease terms and general law govern, though following the URLTA process is still best practice. (Tenn. Code Ann. § 66-28-102(a))
Before charging the deposit for damage you must compile a comprehensive itemized list of ascertainable damage with estimated repair costs, and the tenant generally has the right to a mutual inspection. Both parties sign the list; a tenant who refuses must specify their objections in writing and can later sue only over those items. Tenants lose the inspection right in six cases, including abandonment, eviction, or failing to show up. (Tenn. Code Ann. § 66-28-301(b))
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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