How to Hold and Return a Security Deposit in Maryland

Managing a Security Deposit in Maryland

You may not legally charge your subtenant more than two months' rent as a security deposit. If you attempt to charge more than this, your subtenant has the right to recover up to three times the amount they were overcharged plus attorney's fees.

Storing the Deposit

The security deposit must be kept in an escrow account. You also must give your subtenant a receipt when you receive the security deposit. Failure to do so may result in a $25 fine. The receipt must outline your subtenant's right to receive from you a list of existing damages to the unit. If your subtenant requests such a list within 15 days of occupying the unit and you don't provide it, you may be held responsible for up to three times the security deposit.

Returning the Deposit

In Maryland, when you return a security deposit, you must include 1.5% yearly interest. If you return the security deposit in full, you must do so within 45 days of the end of the sublease term. You can withhold any or all of the security deposit to cover damages or unpaid rent as long as you provide a written and itemized list of damages by first class mail to your subtenant's last known address within 45 days of the end of the sublease term. If you fail to return the security deposit in full within 45 days, your subtenant can sue you for up to three times the security deposit plus attorney's fees. If you fail to send your subtenant an itemized list via the above instructions when withholding any amount from the security deposit, you lose your right to withhold any of it.