Security Deposits in Maryland: What Both Sides Should Know

Maryland sets specific limits on security deposits, the interest owed, and the timeline for returning funds. Both landlords and tenants benefit from understanding these rules up front to avoid disputes and the penalties that can follow a misstep.

Security deposits are one of the most common sources of friction between Maryland landlords and tenants — and most disputes come down to rules that both sides simply did not know. Maryland sets specific limits on how much can be charged, what must happen to the money, and how and when it has to be returned. Getting these right protects landlords from penalties and helps tenants recover what they are owed.

How Much Can Be Charged

Maryland law caps the security deposit a landlord may collect. A landlord who charges more than the legal maximum can be liable to the tenant. Because the cap is set by statute and has been adjusted over time, both landlords and tenants should confirm the current limit before signing a lease rather than relying on what was true in years past.

The Receipt Requirement

When a landlord collects a security deposit, Maryland law requires giving the tenant a written receipt. The receipt must include certain information about the tenant's rights, including the right to request a move-in inspection and the consequences for a landlord who fails to comply. Skipping the receipt can expose a landlord to penalties, so it is not a formality to ignore.

Holding the Deposit

The deposit is the tenant's money being held, not the landlord's to spend. Maryland requires landlords to maintain security deposits appropriately, and tenants are generally entitled to interest on deposits held for a qualifying period. The interest rate and how it accrues are set by law, so the amount owed at move-out is not arbitrary.

Inspections: Move-In and Move-Out

Tenants have the right to be present at a move-in inspection and to receive notice of a move-out inspection. These inspections matter because they document the condition of the unit at the start and end of the tenancy — which is exactly what disputes over damage turn on. Tenants should take dated photos; landlords should keep thorough records.

Returning the Deposit

After a tenant moves out, Maryland law gives the landlord a limited window to return the deposit, along with any interest owed, minus permitted deductions. If the landlord withholds any part of the deposit, the law requires a written, itemized list of the damages claimed and the cost of repairs, sent within the required timeframe.

What can — and cannot — be deducted

• Permitted: unpaid rent, damage beyond ordinary wear and tear, and other charges the law allows.
• Not permitted: ordinary wear and tear — the normal aging of a unit from everyday living.

Penalties for Getting It Wrong

Maryland takes these rules seriously. A landlord who withholds a deposit without following the required procedure — for example, failing to send a timely itemized statement — can face liability beyond simply returning the money, in some cases up to a multiple of the amount wrongfully withheld. That is a strong incentive for landlords to document carefully and meet every deadline.

Practical Steps for Both Sides

For tenants: get your receipt, document the unit's condition at move-in and move-out, provide a forwarding address in writing, and keep copies of everything. For landlords: issue the required receipt, hold the deposit properly, conduct and document inspections, and send any itemized deductions within the legal timeframe.

When to Get Advice

If a deposit dispute is heading toward a standoff — a tenant who believes a deposit was wrongfully withheld, or a landlord facing a claim — an attorney can review the lease, the timeline, and the documentation, and advise on rights and obligations under current Maryland law before the matter escalates.