Maryland Security Deposit Law for Landlords and Tenants
Under Maryland law, a security deposit is defined as any money that a renter pays to a landlord to protect against damages which may occur to a rental unit. It may also be used should there be a failure to pay rent or expenses to the landlord which occur when a tenant breaches a rental agreement for some reason. Here are the key points of the security deposit law that landlords and tenants are going to want to know.
1. The Security Deposit May Not Be More Than Two Months' Rent.
Tenants who are overcharged on their security deposit are entitled to seek out a recovery of up to 3x the extra amount they were charged plus tack on reasonable attorney's fees. If an apartment rents for $500 per month, then the maximum security deposit is $1,000. If a landlord charges a $1,200 deposit, then a tenant can seek $600 in damages plus fees.
2. A Receipt Is Required For a Security Deposit.
Landlords who fail to provide a receipt to tenants for the payment of a security deposit face a $25 penalty under Maryland law.
3. Landlords Must Provide Tenants With An Inventory Of Existing Damages.
Tenants can make a demand for a written inventory of all damages to the rental unit they've agreed to rent. This must be provided within 15 days of taking occupancy. If it is not provided to the tenant, then a landlord may be liable for up to 3x the amount charged for a security deposit, though they can still deduct unpaid rent or damages caused by the tenant from the amount.
4. Security Deposits Above $50 Earn Interest.
If a landlord holds a security deposit for longer than 6 months, then they must include interest on the amount held. The amount of interest required is the accrued daily US Treasury rate, a simple rate of 1.5% for any lease that began on January 1, 2015 or later, or 3% interest if the lease began before 2015.
5. A Security Deposit Only Covers Actual Damages.
A landlord cannot hold a security deposit in its entirety just because someone breaks their lease. Only actual damages can be withheld. Even ordinary wear and tear is exempted from being withheld from a security deposit. It must be returned within 45 days after the tenancy ends or a tenant may be able to sue for up to 3x the amount. Itemized deductions must be provided. The Maryland security deposit law for landlords and tenants is designed to provide clarity when disputes arise. If you have further questions after reading this guide, be sure to look at the law's statutes or seek professional legal advice.
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