Short answer: Maryland security deposit law limits most deposits to one month’s rent per unit under Md. Code, Real Prop. § 8-203(b). The landlord has 45 days after the tenancy ends to return the deposit with interest and mail an itemized list of damages, under § 8-203(e) and (g). A landlord who withholds money “without a reasonable basis” faces up to three times the withheld amount plus reasonable attorney’s fees, under § 8-203(e)(4).
Maryland also does something few states do: it pays you interest at a floor rate, and it gives you the right to be standing in the apartment when the landlord inspects for damage. Both rights depend on paperwork. The interest is automatic, but the move-out inspection right only kicks in if you send a certified letter at least 15 days before you leave. Miss that letter and you lose one of the strongest protections in the statute.
Maryland security deposit law: the key numbers
| Rule | Maryland | Statute |
|---|---|---|
| Deposit limit | 1 month’s rent per unit (up to 2 months in one narrow utility-assistance case) | RP § 8-203(b) |
| Return deadline | 45 days after the tenancy ends, by first-class mail | RP § 8-203(e)(1) |
| Itemized statement | Written list of damages plus itemized costs and supporting documentation, within 45 days | RP § 8-203(g), (j) |
| Interest / separate account | Interest at the 1-year Treasury rate or 1.5%, whichever is greater; Maryland bank account used only for deposits | RP § 8-203(d), (e) |
| Penalty | Up to 3x the amount withheld without a reasonable basis, plus attorney’s fees | RP § 8-203(e)(4) |
| Small claims limit | $5,000 in District Court, exclusive of interest, costs and attorney’s fees | CJP § 4-405 |
The one-month cap, and what counts toward it
Under § 8-203(b)(1), a landlord “may not impose a security deposit in excess of the equivalent of 1 month’s rent per dwelling unit, regardless of the number of tenants.” Four roommates splitting a $2,400 unit cannot each be asked for $2,400; the whole unit’s cap is $2,400.
The definition in § 8-203(a)(3) is broad. It covers “any payment of money, including payment of the last month’s rent in advance,” given to protect the landlord against unpaid rent or damage. Prepaid last month’s rent therefore counts toward the cap.
The only exception, in § 8-203(b)(2), allows up to 2 months’ rent when the tenant qualified for utility assistance through the Department of Human Services, the lease requires paying utilities directly to the landlord, and both sides agree to the amount in writing. If a landlord overcharges, § 8-203(b)(3) lets you recover up to three times the extra amount plus attorney’s fees, and § 8-203(b)(4) allows that claim during the tenancy or within 2 years after it ends.
Surety bonds instead of cash
Section 8-203(i) lets a tenant buy a surety bond in place of all or part of a deposit, though a landlord can neither require one nor be forced to accept one. A bond, or a bond plus a cash deposit, may not exceed two months’ rent per unit. The surety must disclose in writing that the premium is nonrefundable and that the bond is not insurance for you.
Receipt, move-in list and the $25 penalty
The landlord must give you a written receipt, included in a written lease, under § 8-203(c). Section 8-203.1 spells out what it must say, including your right to a move-in inspection with a written list of existing damage if you request it by certified mail within 15 days of moving in. A landlord who gives no receipt owes you $25 under § 8-203.1(c), and must keep a copy of the receipt for 2 years after the tenancy ends.
Ask for that move-in inspection. A signed list of pre-existing damage is far stronger evidence than your memory 18 months later.
How Maryland deposit interest works
Under § 8-203(d), deposits must be held in federally insured institutions doing business in Maryland, in in-state branch accounts “devoted exclusively to security deposits” that “bear interest,” within 30 days after the landlord receives the money. Certificates of deposit or U.S. or Maryland government securities are an allowed alternative. Creditors of the landlord or the tenant cannot attach the deposit.
At move-out, § 8-203(e)(1) requires simple interest at “the daily U.S. Treasury yield curve rate for 1 year, as of the first business day of each year, or 1.5% a year, whichever is greater.” Three limits apply under § 8-203(e)(2) and (3): interest accrues monthly and is not compounded, nothing is owed unless the landlord held the deposit at least 6 months or for any partial month, and interest applies only to deposits of $50 or more.
You don’t need to look up Treasury rates yourself. The state’s DHCD Rental Security Deposit Calculator does the math from your start date, end date, county and deposit amount. It notes that leases before January 1, 2015 used a flat 3% rate. Compare other states on our deposit interest page.
Deductions: “in excess of ordinary wear and tear”
Section 8-203(f)(1)(i) allows withholding for unpaid rent, damage due to breach of lease, or damage by you, your family, agents, employees, guests or invitees “in excess of ordinary wear and tear” to the unit, common areas, major appliances and the landlord’s furnishings. The statute does not define ordinary wear and tear further.
Two further limits matter. The deposit “is not liquidated damages,” so § 8-203(f)(2) bars forfeiting it for a lease breach beyond the landlord’s actual damage. And if you break the lease, § 8-203(f)(3) requires any rent the landlord collects from a new tenant to reduce what you owe for lost future rent.
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Your right to attend the move-out inspection
To be present at the final inspection under § 8-203(f)(1)(ii)-(v), mail the landlord a certified letter at least 15 days before you move, stating that you are moving, your moving date and your new address. The landlord must then reply by certified mail with the inspection time, which must fall within five days before or after your moving date. A landlord who ignores this process “forfeits the right” to withhold any part of the deposit for damages under § 8-203(f)(1)(vii). Our move-out checklist includes a reminder for this letter.
The 45-day list, receipts and estimates
Within 45 days after the tenancy ends, § 8-203(g)(1) requires a written list of damages and an itemized statement of costs, mailed first-class to your last known address. Under § 8-203(j), that statement must include supporting documentation identifying the materials or services. A landlord may use an estimate, but § 8-203(k) then requires written notice when repairs are done, a copy of the final invoice, and a refund within 30 days of any amount withheld above the actual cost. Skipping the 45-day list forfeits the right to withhold for damages under § 8-203(g)(2).
Worked example: a Baltimore move-out
Priya rents in Baltimore for $1,800 a month with an $1,800 deposit and moves out after exactly two years. She sent the certified 15-day notice, attended the inspection, and left a burned countertop.
- Interest: if the 1.5% floor applied both years, $1,800 x 1.5% x 2 = $54. Her real figure could be higher, so she runs the DHCD calculator.
- Day 40: the landlord mails $1,100 and a list claiming $250 for the countertop, with an invoice, and $450 for “general repainting” with no documentation and no damage beyond ordinary wear. No interest is included.
- Withheld without a reasonable basis: the $450 plus the $54 interest, or $504.
- Exposure under § 8-203(e)(4): up to 3 x $504 = $1,512, plus reasonable attorney’s fees.
Abandonment, eviction and a sold building
If you were evicted for a lease breach or abandoned the unit before the tenancy ended, § 8-203(h) changes the order of steps. You must send written notice by first-class mail within 45 days, including your new address, and the landlord then has 45 days from receiving it to send the damage list and refund with interest. The same treble-damages remedy applies.
When a building is sold or transferred, including in receivership or bankruptcy, § 8-203(d)(3) keeps the original landlord liable for any part of the deposit not delivered to the buyer with a proper accounting, and § 8-203(d)(4) makes “any successor in interest” liable too. No lease clause can waive these rules under § 8-203(l).
Taking it to District Court
Maryland’s District Court has exclusive jurisdiction over small claims, defined in Courts and Judicial Proceedings § 4-405 as actions where the amount claimed “does not exceed $5,000 exclusive of interest, costs, and attorney’s fees.” Larger treble-damages claims can still go to District Court on its regular civil docket. See our deposit lawsuit guide for how to frame the claim.
Frequently Asked Questions
Does prepaid last month’s rent count toward Maryland’s cap?
Yes. Section 8-203(a)(3) defines a security deposit to include “payment of the last month’s rent in advance of the time it is due.” A landlord who collects one month’s deposit plus last month’s rent is over the § 8-203(b)(1) limit.
What rate of interest do I get?
The greater of the 1-year U.S. Treasury yield curve rate on the first business day of each year or 1.5%, as simple interest, under § 8-203(e)(1). The DHCD calculator applies the right rate for each year.
My landlord never gave me a receipt. Is that a violation?
Yes. Section 8-203.1(c) makes the landlord liable for $25 if no written receipt was provided. The receipt is also where you should have been told about your inspection rights.
Can a landlord keep the deposit because I broke my lease?
Only to the extent of actual damage. Section 8-203(f)(2) says the deposit is not liquidated damages, and § 8-203(f)(3) credits you with rent the landlord collects from a replacement tenant.
Can my landlord estimate repair costs instead of sending invoices?
Yes, but § 8-203(k) then requires a final invoice once repairs are done and a refund within 30 days of any amount held above the actual cost.
Nothing on this page is legal advice. The federal LSC legal help directory can connect you with a Maryland legal aid program, and our tenant rights by state hub covers related topics. If you are moving within the next few weeks, mail the certified 15-day notice now so the inspection right is preserved.