Maryland Security Deposit Laws

Maryland security deposit laws exist as part of the statewide landlord-tenant laws. They are there for one particular reason, to minimize disputes between landlords and tenants.

As a landlord, you must follow all security deposit laws to avoid possible financial repercussions. The following is a basic overview of the security deposit rules in Maryland.

Is there a limit to how much landlords in Maryland can ask their tenants as a security deposit?

Yes, there is a limit. Maryland landlords must not ask for a security deposit amount exceeding the equivalent of two months' rent. So, if the monthly rent is $1,500, then the most you can ask for as a deposit would be $3,000.

If you collect a deposit exceeding the required limit, you risk getting fined up to 3X the excess amount plus attorney fees.

How should you store a tenant’s security deposit?

You must store your tenant’s deposit in a particular way in Maryland. You must place your tenant’s deposit in a separate account. In other words, you must not commingle the tenant’s security deposit with your own personal funds. Furthermore, you must deposit it within 30 days of receiving it.

If the deposit exceeds $50, you must place it in an interest-bearing account. The account must earn interest at the rate of 3% annually and must accrue interest every 6 months from the date you received it.


Another option for storing your tenant’s deposit is by holding the deposit in an insured certificate of deposit. Your tenant may also be able to purchase a surety bond and post it as a security deposit. Keep in mind that you don’t have to accept this form of deposit.

Do you have to notify the tenant after receiving their security deposit in Maryland?

Yes, you must provide your tenant with a written receipt after receiving their security deposit.

You can include the receipt as part of the lease agreement, but you must state the following information:

  • Within 15 days of moving in, a tenant can request a move-in inspection checklist. They must make this request by notifying you via certified mail.
  • Tenants have a right to be present during a walk-through inspection. To be present, the tenant must notify you through a written notice delivered by certified mail. They must do this at least 15 days before the move-out day. In the notice, the tenant must state when they intend to move out and their new address.
  • The tenant is entitled to $25 if you fail to provide them with a security deposit receipt.

What’s more, you must keep a copy of the tenant’s deposit for at least 2 years after the tenant moves out. The same applies if you evict them or if they abandon their rental premises.


What can make a landlord withhold part or all of their tenant’s security deposit?

Tenants have various responsibilities bestowed upon them by the lease or rental agreement, these include:

  • Caring for the unit from the start.
  • Serving the landlord proper notice when looking to move out.
  • Not leaving behind any of their belongings when moving out.
  • Completing minor repairs by themselves.
  • Leaving their rental premises in a clean condition.
  • Sadly, this sometimes doesn’t happen. The tenant may:
  • Cause damage exceeding normal wear and tear.
  • Leave a large mess on their premises.
  • Leave some personal items behind.
  • Leave without clearing their rent or other fees.
  • Break their lease early.

In these cases, as a landlord, you may have a right to make the appropriate deductions from your tenant's security deposit.

Do Maryland tenants have a right to a walk-through inspection?

Yes, Maryland tenants have a right to a walk-through inspection so long as they request it. The inspection must be done within 5 days before or after the tenant moves out.

You must notify your tenant in writing of their right to be present during the walk-through inspection. In the notice, you must indicate the inspection date.

If you fail to notify the tenant of their right in this regard, you’ll forfeit your right to withhold any amount of the deposit.


When should you return a tenant’s security deposit?

Once your tenant moves out, you have 45 days to return part or all of their deposit. And this should also include any accrued interest if you stored it in an interest-earning account.

You must send the deposit via first-class mail to the tenant’s last known address. If you made any deductions to their deposit, you must include a written itemized list of the deductions.

Wrongfully withholding a tenant’s deposit can have some financial repercussions. You may lose up to 3X the amount wrongfully withheld, plus reasonable attorney fees.

What happens if you sell your Maryland rental property?

There are certain steps to follow if you sell your Maryland rental property or the property otherwise changes hands. You must:
Transfer all the security deposits to the incoming landlord.

Provide the incoming landlord with a written list that has crucial details, such as the name and address of the tenant, and the amount of security deposit held.

If you fail to transfer all or a portion of the deposit, you’ll remain liable for that portion you haven’t transferred.


It’s important to follow the security deposit laws to protect yourself and your tenants. You must also stay informed on leasing laws, squatter's rights, the legal eviction process and other rental laws.

If you would like help staying up-to-date on these laws or would like assistance managing your property reach out to the experts at Wayson Enterprises today!

Disclaimer: This blog isn’t intended to be a substitute for professional legal advice. Laws change and this information may become obsolete at the time you read it. For further help, please get in touch with a qualified attorney or an experienced property management company.

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