Indiana Security Deposit Law

Author: Kasee Godwin
Date: 10.30.2023

Indiana Security Deposit Law: A Comprehensive Guide

Ensuring clarity and fairness in landlord-tenant relationships is essential. One of the most common subjects of these relationships is the security deposit. If you’re a landlord or tenant in Indiana, you must be informed about Indiana security deposit law to prevent misunderstandings or disputes.

Indiana Security Deposit Law at a Glance

  • Maximum Deposit: No state-imposed limit.
  • Return of Deposit: This must be returned within 45 days of the termination of occupancy.
  • Deductions: Allowed for unpaid rent or damages beyond ordinary wear and tear.

No Statutory Limit on Security Deposit Amount:

Unlike some states that cap the amount a landlord can charge for a security deposit, the Indiana security deposit law doesn’t specify a maximum limit. This means the amount is often determined by mutual agreement between the landlord and tenant, typically influenced by market conditions and the property’s value.

Returning the Deposit

After a tenant moves out, landlords have 45 days to return the security deposit. This time frame allows the landlord to inspect the property and assess any damages that may have occurred during the lease term. If deductions are to be made, the landlord should provide the tenant with an itemized list of damages and their corresponding costs.

Deductions from the Deposit:

Landlords are permitted to make deductions from the security deposit under specific circumstances. These typically include:

  • Unpaid rent.
  • Charges specified in the lease agreement.
  • Damages to the property beyond ordinary wear and tear.

Landlords need to be transparent and fair when making these deductions. Providing detailed invoices or receipts for any repairs can help prevent disputes.

Non-compliance Penalties:

If landlords fail to comply with the Indiana security deposit law’s requirements, they might be liable for the entire security deposit amount and potentially additional penalties. On the other hand, tenants can seek legal recourse if they believe their deposit has been wrongfully withheld.

In Conclusion:

Indiana does not currently require a security deposit alternative to be offered, but many communities do provide these options- renters should always ask! 

Understanding the Indiana security deposit law’s intricacies is crucial for landlords and tenants. While the state provides flexibility in determining the deposit amount, it sets clear expectations regarding its return and possible deductions. Both parties should always ensure clear communication and documentation to ensure a smooth process and minimize potential disputes.


Remember, while this guide offers an overview, consulting with legal experts or professionals in property management can provide more in-depth insights tailored to specific situations.


Kasee Godwin

Position: Director of Marketing
Social Networks

Kasee is the Director of Marketing for Qira. She has nearly 15 years of experience in the real estate marketing industry, including 10 years on the client side. In her spare time, she enjoys reading science fiction, exploring new wineries, and fostering Golden Retrievers.

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