Security Deposit Law
What Vermont 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 16, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
No statewide limit. Burlington caps deposits at one month's rent, plus an optional half-month pet payment.
Interest
Not required by state law. Burlington requires deposits to be held in an interest-bearing account at a Vermont passbook savings rate, with interest paid to the tenant.
Return deadline
14 days from when the landlord learns the tenant has vacated or abandoned the unit, with a written itemized statement; 60 days for seasonal rentals.
Vermont's security deposit statute, 9 V.S.A. § 4461, sets no maximum deposit amount, so outside Burlington landlords may charge what the market bears. In Burlington, the deposit 'may not exceed the amount of one month's rent for the unit rented' (Sec. 18-120(a)(1)), and the only permitted add-on is 'an additional payment equal to one-half (1/2) the amount of one month's rent' for pets (Sec. 18-120(a)(2)), which may not be charged 'for any animal that mitigates a disability.' Burlington also bars requiring any other payments or deposits beyond the first month's rent and these deposits as a condition of rental (Sec. 18-120(a)).
9 V.S.A. § 4461 · Burlington Code of Ordinances Sec. 18-120(a)
9 V.S.A. § 4461 imposes no interest obligation; subsection (g) says a municipal ordinance 'may authorize the payment of interest on a security deposit.' Burlington exercises that authority: under Sec. 18-120(a)(1) the deposit 'shall be held by the owner in an interest-bearing account, with an interest rate at least equivalent to a current Vermont bank passbook savings account,' and under Sec. 18-120(e) the tenant 'shall receive all remaining deposit monies and interest' beyond approved deductions.
9 V.S.A. § 4461(g) · Burlington Code of Ordinances Sec. 18-120(a)(1), (e)
The deposit and itemized statement are due 'within 14 days from the date on which the landlord discovers that the tenant vacated or abandoned the dwelling unit or the date the tenant vacated the dwelling unit, provided the landlord received notice from the tenant of that date.' For 'seasonal occupancy and rental of a dwelling unit not intended as a primary residence,' the deadline is 60 days. Delivery must be by hand or by mail to the tenant's last known address. In Burlington, the same 14-day deadline applies, and the itemized statement must also inform the tenant of the right to request a Housing Board of Review hearing within 30 days of receipt (Sec. 18-120(c)).
9 V.S.A. § 4461(c), (d) · Burlington Code of Ordinances Sec. 18-120(c)
State law imposes no separate-account, escrow, or trust requirement, and 9 V.S.A. § 4461(g) provides that a municipal ordinance 'may not limit how a security deposit is held.' However, Burlington's ordinance affirmatively requires that the deposit 'shall be held by the owner in an interest-bearing account, with an interest rate at least equivalent to a current Vermont bank passbook savings account' (Sec. 18-120(a)(1)) — so 'no account requirement' is only true outside Burlington, where landlords must place deposits in an interest-bearing account.
9 V.S.A. § 4461 · Burlington Code of Ordinances Sec. 18-120(a)(1)
Under 9 V.S.A. § 4461(e), 'If a landlord fails to return the security deposit with a statement within 14 days, the landlord forfeits the right to withhold any portion of the security deposit. If the failure is willful, the landlord shall be liable for double the amount wrongfully withheld, plus reasonable attorney's fees and costs.' In Burlington, if the Housing Board of Review determines the 14-day failure was willful, the landlord 'shall be liable for double the amount wrongfully withheld' (Sec. 18-120(c)) — the ordinance remedy clause does not itself add attorney's fees (state § 4461(e) supplies fees) — and noncompliance with the ordinance is also a minimum housing violation punishable under Sec. 18-31 (Sec. 18-120(g)).
9 V.S.A. § 4461(e) · Burlington Code of Ordinances Sec. 18-120(c), (g)
Burlington Code of Ordinances Sec. 18-120 (verified against the official Code Publishing Co. version) layers city rules on top of state law: the deposit may not exceed one month's rent and must be held in an interest-bearing account at a rate at least equivalent to a current Vermont bank passbook savings account; an optional additional pet payment of half a month's rent is allowed but never for an animal that mitigates a disability; no other payments beyond first month's rent and these deposits may be required as a condition of rental; a move-in damage list must be prepared and signed by both parties; the 14-day itemized statement must inform the tenant of the right to request a Burlington Housing Board of Review hearing within 30 days (44 days after vacating if no notice is given); a board finding of willful failure yields double the amount wrongfully withheld; and noncompliance is a minimum housing violation punishable under Sec. 18-31. Other Vermont municipalities may also adopt security deposit ordinances under 9 V.S.A. § 4461(g) — check the local code wherever you operate.
The deposit and a written statement itemizing any deductions are due within 14 days of the date the landlord discovers the tenant vacated or abandoned the unit (or the vacate date the tenant gave notice of). Seasonal rentals of non-primary residences get 60 days. Deliver by hand or mail to the tenant's last known address.
A landlord may retain the deposit only for: nonpayment of rent; damage to the landlord's property (excluding normal wear and tear and events beyond the tenant's control); unpaid utility or other charges the tenant was required to pay directly to the landlord or a utility; and the expense of removing articles the tenant abandoned.
A landlord who fails to return the deposit with the statement within 14 days 'forfeits the right to withhold any portion of the security deposit,' and a willful failure adds liability for double the amount wrongfully withheld plus reasonable attorney's fees and costs.
When the landlord's interest in the unit ends, the deposit must be transferred to the new landlord, who must give the tenant actual notice of the new landlord's name and address with a statement that the deposit has been transferred.
In Burlington, the deposit is capped at one month's rent and must sit in an interest-bearing account at a rate at least equivalent to a current Vermont bank passbook savings account; an optional pet payment of half a month's rent is allowed (never for an animal that mitigates a disability); the itemized statement must tell the tenant about the 30-day Housing Board of Review hearing right; and a board finding of willful failure yields double the amount wrongfully withheld.
Burlington Code of Ordinances Sec. 18-120 · 9 V.S.A. § 4461(g)
You forfeit the right to withhold any portion of the deposit — even for legitimate damage — and if a court finds the failure willful you owe double the amount wrongfully withheld plus the tenant's attorney's fees and costs.
Section 4461(b)(2) only allows deductions for damage that is NOT 'the result of normal wear and tear or the result of actions or events beyond the control of the tenant'; improper deductions are wrongfully withheld amounts that can be doubled if willful.
Burlington caps the deposit at one month's rent (plus an optional half-month pet payment) and requires it to be held in an interest-bearing account at a passbook-savings-equivalent rate; noncompliance is a minimum housing violation punishable under Sec. 18-31.
Sec. 18-120(c) requires the written statement to 'inform the tenant of the opportunity to request a hearing before the Burlington housing board of review within thirty (30) days of receipt'; failure to give that notice is itself an ordinance violation under Sec. 18-120(g), and without notice the tenant's window to demand a hearing extends to 44 days after vacating.
Section 4461(f) requires the deposit to move to the new landlord and the tenant to get actual notice of the new landlord's name and address; skipping this leaves the deposit obligation unresolved and exposes both parties to a wrongful-withholding claim at move-out.
State law sets no cap — 9 V.S.A. § 4461 does not limit the deposit amount. Burlington is the exception: city ordinance Sec. 18-120(a) caps the deposit at one month's rent for the unit, allows one optional additional payment of half a month's rent for pets (never chargeable for an animal that mitigates a disability), and bars landlords from requiring any other payments or deposits beyond the first month's rent and these deposits as a condition of rental.
14 days from the date you discover the tenant vacated or abandoned the unit (or the vacate date the tenant gave you notice of), together with a written statement itemizing any deductions, hand-delivered or mailed to the tenant's last known address. Seasonal rentals of units not intended as a primary residence get 60 days.
You forfeit the right to withhold any portion of the deposit, even for real damage or unpaid rent. If the failure is willful, you're liable for double the amount wrongfully withheld plus the tenant's reasonable attorney's fees and costs under 9 V.S.A. § 4461(e).
Four things only: unpaid rent; damage to your property that isn't normal wear and tear or the result of events beyond the tenant's control; unpaid utility or other charges the tenant was required to pay directly to you or a utility; and the cost of removing belongings the tenant abandoned. Every deduction must appear on the written itemized statement.
Not under state law. But in Burlington, the deposit must be held in an interest-bearing account with a rate at least equivalent to a current Vermont bank passbook savings account, and the tenant receives all remaining deposit monies and interest beyond approved deductions when they move out.
The tenant can request a hearing before the Burlington Housing Board of Review — within 30 days of receiving your itemized statement, or within 44 days of vacating if you never gave the required hearing notice. The board reviews the reasonableness of your deductions and orders how much of the withheld deposit you keep; if it finds your failure to return the deposit within 14 days was willful, you owe double the amount wrongfully withheld.
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 16, 2026.
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