A security deposit is any payment of money, including payment of the last month’s rent in advance of the time it is due, given to a landlord by a tenant in order to protect the landlord against the tenant's failure to pay rent, expenses incurred due to a breach of the lease, or damage to the rental property.
Every landlord is required to provide the tenant with a receipt for the security deposit, which must be included in the written lease. If the landlord fails to provide the tenant with a receipt for the security deposit, the landlord is liable to the tenant for $25.
The deposit must be accompanied by a written receipt notifying the tenant of the following:
1. The tenant’s right to have the dwelling unit inspected by the landlord in the tenant’s presence for the purpose of making a written list of damages that exist at the commencement of the tenancy if the tenant so requests by certified mail within 15 days of the tenant’s occupancy;
2. The tenant’s right to be present when the landlord inspects the dwelling unit at the end of the tenancy in order to determine if any damage was done to the premises. The tenant must notify the landlord of the following items by certified mail at least 15 days prior to the date of the tenant’s intended move:
a. The tenant’s intention to move;
b. The date of moving; and
c. The tenant’s new address;
3. The landlord’s obligation to conduct the inspection within 5 days before or after the tenant’s stated date of intended moving;
4. The landlord’s obligation to notify the tenant in writing of the date of the inspection;
5. The tenant’s right to receive a written list of the charges against the security deposit claimed by the landlord and the actual costs delivered by first class mail to the last known address of the tenant within 45 days after the termination of the tenancy;
6. The obligation of the landlord to return any unused portion of the security deposit delivered by first class mail to the tenant’s last known address within 45 days after the termination of the tenancy; and
7. A statement that failure of the landlord to comply with the security deposit law may result in the landlord being liable to the tenant for a penalty of up to three times the security deposit withheld, plus reasonable attorney’s fees. Read the Law: Md. Code, Real Prop. § 8-203 ; 8-203.1
Return of the Security Deposit
Within 45 days after the end of the tenancy, the landlord must return the security deposit to the tenant together with simple interest. Interest accrues at monthly intervals from the day the tenant gives the landlord the security deposit, and the interest is not compounded. The landlord does not have to return the security deposit with interest if:
- The landlord did not hold the security deposit for at least six months; or
- The tenancy was less than a full month.
At the termination of the tenancy, the landlord may withhold all or part of the security deposit for unpaid rent, damage due to breach of lease, or damage by the tenant in excess of ordinary wear and tear.
When a tenant has been evicted or ejected the tenant must send a request for return of the security deposit by first class mail. Within 45 days of receiving the request, the landlord must return the deposit with simple interest, minus any damages.
A copy of the receipt for security deposit must be retained by the landlord for a period of two years after the termination of the tenancy, abandonment of the premises or eviction of the tenant. Read the Law: Md. Code, Real Prop. §§ 8-203 ; 8-203.1
Other Required Receipts and Records
Every landlord is required to keep records showing the dates and amounts of all rent paid to him by each tenant, and showing also the fact that a receipt was given to each tenant for each cash payment of rent. Read the Law: Md. Code, Real Prop. § 8-208.3
For Anne Arundel County Only
In Anne Arundel County, if property is leased for any definite term or at will, the landlord shall give the tenant a receipt showing payment and the time period which the payment covers. If the landlord fails to provide a receipt as required by this section, s/he is liable to the tenant for $25, in addition to any other penalty imposed by the courts. This requirement does not apply if the tenant makes payment by check or rents the property for commercial or business purposes. Read the Law: Md. Code, Real Prop. § 8-205
Information to be Posted or Provided by the Landlord
The landlord of a residential rental property must include in the written lease OR on a posted sign conspicuously placed on the rental property, the following information:
- The name, address and phone number of the landlord; or
- The person, if any, who is authorized to accept notice or service of process on the landlord's behalf.
If the landlord fails to provide the information in this manner, then notice or service of process can be sent by the tenant to:
- The person to whom the rent is paid;
- The address where the rent is paid; or
- The address where the tax bill is sent. Read the Law: Md. Code, Real Prop. § 8-210
Disclosure by Landlord
State law does not require a property owner or the owner's agent to disclose any of the following facts about property offered for rent:
- An owner or occupant of the property is, was, or is suspected to be infected with human immunodeficiency virus (HIV), or diagnosed with acquired immunodeficiency syndrome (AIDS); or
- A homicide, suicide, accidental death, natural death, or felony occurred on the property.
These matters are not considered material facts or latent defects relating to the property.
A landlord or landlord's agent who did not disclose any of the above is immune from civil liability or criminal penalty for the failure to disclose. Read the Law: MD Real Prop. § 2-120
Edits by Regina Strait, Esq.