A Maryland security deposit is any money that is
given to the landlord by the tenant to protect the landlord against unpaid rent
or damages to the premises. Any rent that is paid in advance is considered
part of the security deposit and is subject to all the restrictions listed
below. Usually the money is deposited with the landlord when signing the
lease and is invested and returned after the tenant moves out.
Maryland law provides the tenant strong
protection against landlord abuse of the security deposit. The laws and
penalties apply to deposits given under both oral and written leases. The
tenant should insist upon these rights and take follow-up action if the landlord
delays or improperly withholds the security deposit. Similarly, the tenant
cannot defeat the purpose of the security deposit by using it for the last
The total amount of the security deposit may not be more than two month’s rent
or $50; whichever is greater. If the tenant is charged more, s/he may
recover from the landlord up to three times the excess amount and reasonable
attorney’s fees. The tenant may demand refund of this excess at anytime
while s/he lives in the rental property or within 2 years after s/he moves away. For
example, if the rent is $200 per month and the landlord charges $200 security
deposit and 2 months’ advance rent, the total of $600 illegally exceeds the
two-month maximum of $400. The tenant may sue immediately for 3 times the
excess (3 x $200) and recover up to $600.
RECEIPT TO TENANT The tenant must receive a receipt for the security
deposit, although this may consist of a clause written into the lease. The
receipt (or statement in the lease) must inform the tenant of his/her right to
receive from the landlord a list of all existing damages (described below). The
tenant should ask for this receipt and look for such a clause in the lease
(although a request is not required). If the landlord fails to provide such
a receipt, state law entitles the tenant to $25.
LIST OF EXISTING DAMAGES
Money may be deducted from the security deposit at the
termination of the lease for damages to the property. In order to protect
the tenant from later paying for damages that already existed when the tenant
moved in, THE TENANT SHOULD, WITHIN 15 DAYS OF MOVING IN, MAKE A WRITTEN REQUEST
FOR A LIST OF EXISTING DAMAGES. Note that the tenant must ask for this
list. If the landlord does not give the list promptly s/he is liable for
three times the full security deposit. Even if the landlord does supply
such a list, it is a good idea for the tenant to prepare his/her own list
(including damaged or worn items), which should be witnessed and signed by a
third party and sent to the landlord. It is best to send this letter by
certified mail, requesting it be included in management files. If there is
any disagreement, both parties should check the property together. It's
also recommended that photographs be taken.
INTEREST ON THE SECURITY DEPOSIT
After the landlord receives a security deposit, they must deposit it in a
Maryland bank within 30 days. This deposit must be in a separate
interest-bearing account that contains only security deposit money. If the
deposit was $50 or more, simple interest of the current rate per year will accrue to the
tenant at six-month intervals from the time the tenant paid the deposit.
INSPECTION OF PREMISES WHEN MOVING OUT
The tenant has the right to be present when the landlord inspects the premises
for any damages at the end of the term. THE TENANT MUST NOTIFY THE LANDLORD
BY CERTIFIED MAIL OF HIS/HER INTENTION TO MOVE, THE DATE OF MOVING AND HIS/HER
NEW ADDRESS. NOTICE MUST BE SENT 15 DAYS PRIOR TO DATE OF MOVING. The
tenant should expressly request the landlord to inspect for cleanliness and
damage in the tenant’s presence.
WITHHOLDING THE DEPOSIT
The landlord is entitled to keep all or part of the deposit for expenses
actually incurred by him/her due to the fault of the tenant in damaging the
premises or failing to pay rent. Any unpaid rent for the remainder of the term
may usually be withheld.
Many tenants lose their security deposit by
moving out in the middle of the term or by not sending the required termination
notice within the proper time. (See Section 7). If the tenant, upon moving
out, does not give 30 days written notice when required, for example, s/he may
be held liable for rent even though s/he is no longer living in the apartment.
The tenant should notify the landlord through certified mail. In response, the
landlord should inform the tenant of the time and date of the moving our
inspection through certified mail. The inspection should be within 5 days
before or after the day the tenant actually moves out. The landlord, however,
cannot deduct the full amount of the unpaid rent if s/he later re-rents the
premises before the end of the rental period. In this case, rent received from
the new tenant reduces, dollar for dollar, the amount that the landlord can
deduct on the grounds of unpaid rent. In other words, the landlord cannot
charge twice during any overlapping terms, but rather can deduct only the cost
of his/her actual loss.
The landlord may also deduct for utility bills
owed by the tenant, damages caused by the tenant’s violation of lease terms,
or for unusual or unexpected damages to the property. The cost of repairing
broken windows or holes in the walls or floors, for example, may properly be
charged to the tenant and deducted from the deposit. However, the physical
deterioration claimed must be more than ordinary wear and tear (such as worn
rugs, rusted screens, or slightly frayed furniture) in order to be deductible
from the security deposit.
A security deposit may not be forfeited
automatically by breach of the lease by tenant. A landlord may only deduct
the amount by which s/he is actually damaged by the breach.
NOTICE OF WITHHOLDING TO TENANT
The landlord has a duty to promptly inform the tenant of the reasons why the
full amounts of the security deposit will not be returned. If the landlord
intends to withhold any part of the security deposit, s/he must send to the
tenant’s last known address within 30 days after the lease has ended, an
itemized list of his reasons and the actual cost for each item. The
landlord who fails to provide the list within 30 days loses his/her right to
keep any part of the security deposit for damages.
NOTE: The tenant should closely scrutinize
any list in which the cost of damages claimed exactly equals the amount of the
deposit plus interest to make sure the landlord is not attempting an illegal
RETURN OF DEPOSIT AND INTEREST
After the lease is terminated, the landlord has only 45 days in which to return
to the tenant the security deposit and interest minus any amount properly
withheld. Simple Interest of 4% per year is due on any deposit of $50 or
more. The landlord is liable to the tenant for up to 3 times the amount
withheld, plus reasonable attorney’s fees, if s/he fails to return any part of
the deposit within this period without good reason.
ADDITIONAL TIPS FOR GETTING BACK THE
The tenant should clean the apartment before leaving whether required to do so
by the lease or not. Be sure to clean the bathroom walls, the kitchen
appliances (including the range and oven), all floors, and all furniture. When
the landlord makes the final inspection of the premises, the tenant should
insist on being present and should try to get the landlord and/or witnesses to
sign a statement about the condition of the property. Taking photographs is
also a wise precaution. Before the tenant moves out, s/he should have a
friend check the condition of the apartment in case court witnesses are later
Many tenants may have serious problems
recovering all or part of their security deposit. The most frequent problem
involves proof of the condition of the rental property at the commencement of
the tenancy compared to the condition at the termination of the tenancy. The
best way to avoid this problem is to keep complete records of all transactions
between landlord and tenant. This is especially important if the tenant
finds it necessary to bring an action in Small Claims Court to recover the
Small Claims Court is designed to handle
lawsuits to recover sums of money up to $500 (may change). There is no need
to hire an attorney because the judges don’t follow the formal courtroom rules
and procedures. Both parties tell their stories to the judge informally.
However, it is important to be prepared and to
have your case documented. For this purpose, the tenant should keep the
following items in a safe place:
- The receipt and/or cancelled check showing
that the security deposit has been paid.
- A copy of any written lease or rental agreement.
- A copy of the written request for a list of existing damages made by the
tenant within 15 days after moving in.
- The landlord’s list of existing damages.
- The tenant’s own list of existing damages signed by the landlord and/or
- Any photographs taken of the property.
- A copy of the tenant’s notice to quit.
- Any signed statement by the landlord and/or witness concerning the condition
of the property upon the tenant’s termination.
In order to have records of correspondence
between the landlord and tenant, any letters sent to the landlord should be sent
Registered Mail, Return Receipt Requested. This will guarantee that the landlord
actually receives the letter. The tenant should keep the return receipts
with the above materials