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Indiana Security Deposit Laws

As a tenant, you make an agreement (a lease) with the landlord to take reasonable care of the property, pay your rent on time, and follow the rules set forth in the rental agreement. In order to secure their property interests, landlords typically require payment of a security deposit. Many states -- not including Indiana -- have laws restricting the amount a landlord may collect as a deposit. However, Indiana (like most states) does require the landlord to repay the deposit, minus any reasonable (and itemized) deductions.

Learn more about Indiana's security deposit laws, including return deadlines and what constitutes a reasonable deduction, in the following sections.

Indiana Security Deposit Laws at a Glance

When you're renting, it can be really difficult coming up with the cash to pay your first month's rent and deposit, even more so when you're waiting for the deposit from your last rental. The law doesn't have to be complicated, though, which is why we've provided the following legalese-free summary of Indiana's security deposit laws.


Indiana Code, Title 32:

Security Deposit Maximum

State law has no set limit for how much a landlord may require as a security deposit. Written notice after receipt of security deposit is not required.

However, city and county laws may impose such limits.

Storage of Security Deposit

State law doesn't require a tenant's security deposit to be stored in any particular manner.

Indiana law allows landlords to retain all (or a portion) of the security deposit as a lien on the tenant's motor vehicle.

Tenant Action for Nonpayment of Deposit

The tenant may claim up to the full amount of the security deposit, plus reasonable attorney's fees, if the landlord wrongfully withholds any of the deposit.

What Can A Landlord Deduct?

Landlords may deduct for reasonable fees and expenses incurred during the rental period, including:

  • The tenant's possible nonpayment of rent and costs for water or sewer services provided (it may be used to cover last month's rent if the landlord and tenant agree in writing);
  • Damage to the premises, including damage to or destruction of smoke alarms or carbon monoxide alarms;
  • Damages as the result of the nonfulfillment of the rental period (i.e. leaving before the end of the lease period), except where the tenant was forced to leave the property because of a landlord's violation;
  • Any unpaid bills that become a lien against the property due to the tenant's occupancy; and
  • The costs of re-renting the premises after breach by the tenant, including any reasonable fees or commissions paid by the landlord to a licensed real estate broker to re-rent the premises.

Note: Funds can't be deducted from the security deposit for "normal wear and tear" on the property.

Itemized List of Deductions

The landlord must provide a written, itemized list of deductions from the security deposit, including:

  • Description of the damaged item(s);
  • Cost of repairing or replacing damaged item(s); and
  • Amount deducted from the security deposit.

Note: Failure to include this list forfeits the landlord's right to make any deductions.

Deadline for Returning a Tenant's Security Deposit

The landlord must return the balance of the deposit (amount paid minus reasonable, itemized deductions) by check or money order within 45 days after termination of lease and vacancy of premises.

The landlord isn't liable for returning the security deposit (minus reasonable deductions) until the tenant provides a mailing address to the landlord, in writing.

The landlord isn't required to do a walk-through inspection prior to the tenant vacating the premises.

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Research the Law

  • Indiana Code - FindLaw's hosted version of the Indiana Code and Constitution.
  • Indiana Laws - FindLaw's summaries of select Indiana laws, including criminal, injury, employment, family, and small business laws.

Indiana Security Deposit Laws: Related Resources

Everyone's situation is a little different and you may have additional questions about security deposits in Indiana or you may need legal counsel as you prepare to take action. In any event, a skilled legal professional will be able to guide you toward a successful outcome. Get started today by contacting an Indiana landlord-tenant law attorney near you.

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