Maryland security deposit laws are detailed under the Maryland Code, Real Property § 8-203. These laws provide clear guidelines on how landlords must handle security deposits, ensuring both landlords and tenants are aware of their rights and responsibilities under Maryland law. Please note that rules and regulations may vary by municipality.
The maximum amount a landlord can require as a security deposit is two months' rent.
The security deposit must be placed in an escrow account in a federally insured financial institution, located in Maryland, and the account must earn interest.
The deposit cannot be commingled with other funds and must be held in trust for the tenant.
Landlords must provide tenants with a receipt for the deposit, which must include information about the tenant's rights to have the deposit held in an escrow account, the bank's name and address, and the amount deposited.
Landlords must pay interest on security deposits at a rate of 3% per year or at the rate published by the Department of Housing and Community Development.
Annually, the landlord must notify the tenant of the interest earned on the security deposit.
The interest must be paid to the tenant at the end of the tenancy or deducted from any amounts due for damages.
The landlord has 45 days after the end of the tenancy to return the deposit, along with any interest, minus any permissible deductions.
The landlord must inspect the property and document any damages that exceed normal wear and tear.
The landlord must notify the tenant in writing of their right to be present at the inspection. This notice must be provided at least 15 days before the inspection, and the tenant must confirm attendance.
If the landlord makes any deductions, they must provide an itemized list of damages, along with supporting documentation, within the same 45-day period.
Maryland landlords may deduct funds from a security deposit for:
Penalty for Overcharging: If a landlord charges more than this, the tenant may recover up to three times the excess amount plus reasonable attorney’s fees.
Failure to Return Deposit: If the landlord fails to return the security deposit within 45 days or fails to provide an itemized list of damages, the tenant can sue for up to three times the amount wrongfully withheld, plus reasonable attorney’s fees.
Bad Faith Retention: If a landlord is found to have retained the deposit in bad faith, they may be liable for additional damages.
Tenant’s Forwarding Address: Tenants must provide the landlord with a forwarding address to receive the security deposit refund. If the tenant fails to provide this address, the landlord is not obligated to return the deposit until the address is provided.
DISCLAIMER: Security deposit laws may vary by county or municipality. The information provided by Build Whale, Inc. is for general informational purposes only and should not be construed as legal advice. It is not a substitute for consultation with a qualified attorney. While we strive to provide accurate and up-to-date information, Build Whale, Inc. makes no guarantees or warranties regarding the accuracy, completeness, or reliability of the information presented.