Short answer: Indiana security deposit law sets no maximum deposit, and cities may not create one, but under IC 32-31-3-12(a) the landlord must deliver the deposit, minus itemized deductions, within 45 days after the lease ends and you deliver possession. If the landlord sends no itemized list of damages in that time, IC 32-31-3-15 treats it as agreeing that no damages are due. The remedy is the deposit owed plus reasonable attorney’s fees and court costs, not a multiple (IC 32-31-3-12(b), -16).
Indiana’s rule has one condition that decides many cases: the landlord is “not liable under this chapter until the tenant supplies the landlord in writing with a mailing address,” according to IC 32-31-3-12(a). A tenant who moves out without leaving a written address can lose leverage before the 45 days even start to matter. Give that address first, then count.
Indiana security deposit law: quick reference
| Rule | Indiana | Statute |
|---|---|---|
| Deposit limit | No statutory maximum; local regulation of deposits barred | IC 32-31-1-20(c)(2) |
| Return deadline | 45 days after termination and delivery of possession | IC 32-31-3-12(a), -14 |
| Itemized statement | Mailed list with estimated repair cost per item, plus check for the balance | IC 32-31-3-14 |
| Interest / separate account | Neither required | IC 32-31-3 |
| Penalty | Deposit withheld plus reasonable attorney’s fees and court costs | IC 32-31-3-12(b), -16 |
| Small claims limit | $10,000 | Indiana Small Claims Manual |
No cap, statewide
Nothing in Indiana’s security deposit chapter, IC 32-31-3, limits how much a landlord may charge. And IC 32-31-1-20(c)(2) prohibits any city, town or county from regulating security deposits for privately owned rental property unless the General Assembly authorizes it. The same section bars local regulation of screening, lease applications, leasing terms and required disclosures.
What counts as a deposit is defined broadly in IC 32-31-3-9. It includes any required prepayment of rent beyond the first full rental period, any rent in a period above the average rent for the term, and any money or property returnable on condition that you return the unit in the required condition. So a “last month’s rent” prepayment or a refundable “cleaning deposit” is a security deposit under Indiana law. Payments for a purchase option, and cooperative membership fees, are excluded.
A landlord may accept, but may not require, a lien on your car as security under IC 32-31-3-13.5. If it does, the deposit chapter’s rules apply.
What an Indiana deposit can pay for
IC 32-31-3-13 lists four, and only four, permitted uses:
- actual damage to the unit or an ancillary facility that is not the result of ordinary wear and tear;
- rent in arrears, and rent due because you ended the lease early;
- the last month’s rent, but only if a written agreement says the deposit will serve as the final payment; and
- utility or sewer charges that were your obligation under the lease and that the landlord paid.
Unless you agreed otherwise, IC 32-31-3-12(a) says you cannot apply your deposit to rent yourself. Withholding the last month’s rent and telling the landlord to “keep the deposit” gives it a claim for that rent.
The statute uses the phrase “ordinary wear and tear” but does not define it. Faded paint and carpet worn by normal walking are the classic examples on the landlord’s side of the line. Our wear and tear guide covers more. Indiana’s chapter does not require a move-in inspection, so record the unit’s condition yourself with dated photos; our move-out checklist helps at the other end.
The 45-day itemized list
Two sections set the deadline. IC 32-31-3-12(a) requires the deposit, minus itemized deductions, to be delivered with a written notice no more than 45 days after the rental agreement ends and you deliver possession. IC 32-31-3-14 requires the landlord, within 45 days after occupancy ends, to mail an itemized list of damages that shows the estimated repair cost for each damaged item, and to include a check or money order for the difference between the damages claimed and the deposit.
The consequence for silence is spelled out in IC 32-31-3-15: failure to provide the notice of damages “constitutes agreement by the landlord that no damages are due,” and the landlord must remit the full deposit immediately. Our deadline checker can count the 45 days.
Worked example: Jordan in Indianapolis
Jordan rents a $1,100-a-month apartment and paid a $1,500 deposit, which Indiana allows. The lease ends May 31 and he returns the keys that day, then emails and mails his new address on June 3.
Forty-five days after May 31 is July 15. Suppose nothing arrives by then. Under IC 32-31-3-15, the landlord is treated as agreeing that no damages are due and must immediately send the full $1,500.
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If the landlord still keeps the money, IC 32-31-3-16 makes it liable for the $1,500 withheld plus reasonable attorney’s fees and court costs. Had the landlord instead mailed a list on July 10 deducting $300 for a broken blind and wall holes, with a $1,200 check, it would have complied, and Jordan’s dispute would be only over whether the $300 was ordinary wear and tear.
Why Indiana’s penalty is about fees
Indiana does not double or triple the deposit. IC 32-31-3-12(b) lets a tenant recover “all of the security deposit due the tenant and reasonable attorney’s fees,” and IC 32-31-3-16 adds court costs when the landlord fails to send the list or refund. Fee-shifting is the real incentive: a landlord that ignores the statute pays your lawyer, too. IC 32-31-3-12(c) preserves other damages either side may be owed, and IC 32-31-3-17 voids any waiver of the chapter.
Sale of the building and landlord disclosures
IC 32-31-3-12(d) binds whoever owns the unit when your lease ends. If the landlord sells to a good-faith buyer, IC 32-31-3-19 releases it from later events once you get written notice, but for one year it stays liable for your deposit unless the buyer gives you notice that it assumed the liability and the seller transfers the deposit to the buyer.
At or before move-in, IC 32-31-3-18 requires the landlord to give you, in writing, the names and addresses of an Indiana resident authorized to manage the unit and an Indiana resident agent for legal papers and notices. If it fails to, you may recover reasonable expenses spent finding that information. Knowing exactly where to send your forwarding address and demand matters in a deposit dispute.
Small claims in Indiana
Under IC 32-31-3-11, a deposit case may be filed on the small claims docket of any court with jurisdiction. The Indiana Small Claims Manual from the Office of Court Services lists claims of $10,000 or less, including landlord-tenant disputes where rent due at filing is $10,000 or less. Send a written demand first, citing IC 32-31-3-14 and -15; our demand letter template can help.
Frequently Asked Questions
Is there a cap on security deposits in Indiana?
No. The deposit chapter sets none, and IC 32-31-1-20(c)(2) bars local governments from regulating security deposits without legislative authorization.
When does the 45-day clock start?
When the rental agreement ends and you deliver possession. But the landlord is not liable under the chapter until you give it a mailing address in writing, so send that address right away.
Can I tell my landlord to keep the deposit as my last month’s rent?
Only if you both agree in writing. IC 32-31-3-12(a) says a tenant is not entitled to apply a deposit to rent unless otherwise agreed, and IC 32-31-3-13 allows it only under a written agreement.
What happens if my landlord never sends a list of damages?
IC 32-31-3-15 treats the silence as the landlord’s agreement that no damages are due, and the full deposit must be returned immediately. If it is not, you can recover the deposit plus attorney’s fees and court costs.
Does Indiana require interest on deposits?
No. The chapter contains no interest or separate-account requirement.
Your next step: send your landlord a dated written mailing address today, then mark day 45 after you handed back the keys. This guide is general information, not legal advice; free resources are available from Indiana Legal Help and through LSC’s legal aid finder.