Security Deposits: The One-Month Cap and 21-Day Return Rule

What it requires

• Collect no more than one month’s rent as security, in addition to first month’s rent. A small landlord may collect two months, except from a service member (see Key Facts).
• Within 21 calendar days after the tenant vacates, return the balance with an itemized statement of deductions.
• Deduct only for unpaid rent, damage beyond ordinary wear and tear, cleaning back to move-in condition, and other lease obligations the law allows.
• If the tenant paid electronically, return the deposit electronically unless you both agree in writing to another method.
• Bad-faith retention can cost up to twice the deposit, plus actual damages.

Owner checklist

• Deposit amount checked against the cap before the lease is signed
• Move-out date logged the day keys come back
• Itemized statement, receipts, and required photos ready before day 21
• Refund sent by the method the law requires