Security Deposits
Written in plain language for general understanding. This is educational content, not legal advice. Based on federal statutes and official sources.
What is this right?
When you move out, your landlord must return your security deposit within a specific timeframe set by your state's law. They can only deduct for legitimate reasons: unpaid rent, damage beyond normal wear and tear, or cleaning costs specifically allowed by your lease.
Your landlord cannot keep your deposit for normal wear (scuffed floors, faded paint, minor nail holes). Most states require landlords to provide an itemized list of any deductions.
When does it apply?
This right applies when:
- You paid a security deposit at the start of your tenancy
- You are moving out (whether your lease ended, you gave notice, or you were evicted)
- Your landlord deducts money from your deposit or refuses to return it
Common misconceptions:
- "My landlord can keep the deposit for any reason" — No. Deductions must be for specific, documented damages beyond normal wear and tear.
- "Normal wear and tear means the place should look new" — No. Landlords cannot charge for gradual deterioration from normal use: paint fading, carpet wearing down, minor scuffs.
- "I can use my security deposit as last month's rent" — Not unless your lease specifically allows it. Withholding rent and claiming "use my deposit" can lead to eviction for nonpayment.
What should you do?
Step 1: Before moving out, take photos and video of every room. Date-stamp them. This documents the condition of the unit.
Step 2: Do a walkthrough with your landlord if possible. Get them to sign off on the condition of the unit, or note any disputes in writing.
Step 3: Provide your forwarding address in writing so the landlord knows where to send the deposit.
Step 4: If your landlord doesn't return the deposit within your state's deadline, send a demand letter via certified mail requesting the return.
Step 5: If they still won't return it, file in small claims court. Many states allow you to recover 2-3x the deposit amount as a penalty for wrongful withholding.
What should you NOT do?
Don't leave without documenting. Without move-out photos, it's your word against the landlord's about the unit's condition.
Don't skip the demand letter. Courts want to see that you tried to resolve it before suing. A certified letter creates a paper trail.
Don't wait too long. Most states have a statute of limitations (2-6 years) for security deposit claims. File promptly.
Don't accept a partial return without reserving your rights. If you cash a partial refund check, note in writing that you're still disputing the deductions.
How Indiana differs from federal law
Indiana regulates security deposits under state landlord-tenant law:
- Maximum deposit: no statutory maximum for security deposits in Indiana
- Landlords are not required to hold the deposit in a separate account or pay interest
- Deposit must be returned within 45 days after the tenant moves out
- An itemized list of damages must be provided if any amount is withheld
- Allowed deductions: unpaid rent, damage beyond normal wear and tear, unpaid utility charges
- If the landlord fails to return the deposit or provide a list of damages within 45 days, the tenant may recover the entire deposit plus attorney fees
- Tenants must provide a forwarding address in writing
Additional Steps in Indiana
If your landlord fails to return your deposit within 45 days, send a written demand. You can file in Indiana small claims court (up to $10,000). Contact Indiana Legal Services at (317) 631-9410 or indianalegalservices.org.
Relevant Law: IC § 32-31-3-12 (security deposit return). IC § 32-31-3-13 (itemized damages). IC § 32-31-3-16 (remedies for wrongful withholding).
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