The Security Deposit at Move-In: How Much, Where to Hold It, and What to Document
Every deposit dispute at move-out was decided at move-in. The landlord who collected the right amount, held it the way the state requires, gave the tenant the receipt and disclosures the statute names, and walked the unit with a camera on day one wins the argument a year later without arguing. The landlord who skipped one of those steps often forfeits the deduction — and in a dozen states, pays the tenant two or three times the deposit for the trouble.
This guide is the move-in half of the deposit story. The move-out half — what you can deduct and how to send the itemised statement — is in Can a Landlord Keep the Security Deposit for Carpet Stains? and on the deposit return letter pages.
How Much You Can Collect
About half the states cap the deposit, most often at one or two months' rent; the rest leave it to the market, where one month is standard and two is the ceiling a good applicant will accept. Four things to know about the cap:
- It usually includes everything refundable. A "pet deposit" or "key deposit" on top of a capped security deposit is still part of the deposit in most capped states. Non-refundable fees are a separate question, and several states (California, Montana, Washington in part) restrict or forbid them.
- Some caps move. California's one-month cap (since July 2024) rises to two for small landlords; New York's is one month flat; Massachusetts one month; North Carolina depends on the lease term.
- Last month's rent is rent, not deposit — but where it is collected up front, some states count it toward the cap and most require it to be treated as prepaid rent, not a deduction fund.
- Furnished units get a higher cap in a handful of states.
| State | Max deposit | Return deadline | Interest | Itemized list |
|---|---|---|---|---|
| California | 1 month’s rent | 21 days | No | Required |
| Texas | No limit | 30 days | No | Required |
| Florida | No limit | 15 days | Depends | Required |
| New York | 1 month’s rent | 14 days | Yes | Required |
| Illinois | No limit | 30 days | Yes | Required |
| Pennsylvania | 2 months’ rent | 30 days | Yes | Required |
| Ohio | No limit | 30 days | Depends | Required |
| Georgia | No limit | 1 month | No | Required |
| North Carolina | Varies by term | 30 days | No | Required |
| Arizona | 1.5 months’ rent | 14 business days | No | Required |
| Washington | No limit | 30 days | No | Required |
| Colorado | 2 months’ rent | 60 days | No | Required |
| Massachusetts | 1 month’s rent | 30 days | Yes | Required |
| Virginia | 2 months’ rent | 45 days | No | Required |
| Oregon | No limit | 31 days | No | Required |
Every state, with the statute, on the deposit return letter pages and the state law pages.
Where It Has to Be Held
The deposit is the tenant's money that you are holding, not income. States enforce that idea to very different degrees:
- Separate account required — Massachusetts, New York (for buildings of six or more), New Jersey, Connecticut, Florida, Maryland, Iowa, Kentucky, Michigan, Pennsylvania (above a threshold), Washington, North Carolina and others. Commingling with your own funds can forfeit the right to deduct at all.
- Interest owed to the tenant — Massachusetts, Connecticut, New Jersey, Maryland, Iowa, Minnesota, Illinois (larger buildings), New York (six or more units), Pennsylvania (after two years) and a few cities. The rate is small; the penalty for skipping it is not.
- Disclosure of the bank — where a separate account is required, the tenant usually has to be told the bank's name and address, in writing, within a set number of days.
- No rule — Texas, Georgia (with an exception), Arizona, Colorado, Ohio and most of the rest. You may still want a separate account: it keeps the money from being spent, and it makes the ledger obvious in court.
Massachusetts is the state to be careful in: a deposit held in the wrong account, without the statutory receipt, or without the condition statement can cost the landlord three times the deposit plus the tenant's attorney fees — and courts award it routinely. If you own in Massachusetts, follow the statute to the letter or do not take a deposit.
The Paperwork the Tenant Must Get
- A receipt — amount, date, what it is for, where it is held (bank name and address where required). Give one even where the statute is silent.
- The deposit terms in the lease — amount, what it may be applied to, the return deadline and the itemisation the state requires.
- The move-in condition report — signed by both sides, with photos, within the state's window (many require it at or within days of move-in; some require the landlord to offer it).
- Any state disclosure — for example the tenant's right to an itemised list and to be present at the move-out inspection (California), or the statutory notice of deposit rights (Florida, Massachusetts, New Jersey).
The Condition Report That Decides the Refund
Every deduction you will ever want to make depends on proving the unit was in better condition on day one than on the last day. The report is that proof. Do it before the tenant's furniture arrives, with the tenant present if at all possible, and:
- Photograph every room from the doorway, then every wall, floor, ceiling and fixture. Wide shots first for context, close-ups for existing marks. Time-stamped. Two hundred photos of a two-bedroom is not too many.
- Note every existing defect in writing — the nail holes in the hallway, the chip in the tub, the scuffed baseboard. A report with no defects listed looks like a report nobody filled in.
- Record the age of finishes — carpet installed 2023, paint 2025, appliances by model and year. Depreciation is how a court decides what a stain or a scratch is actually worth, and you cannot depreciate something whose age you cannot show.
- Test everything that switches on — every outlet, burner, tap, window latch, smoke and CO alarm — and note it.
- Both sign, both keep a copy. Give the tenant a few days to add anything you missed and sign the amended version.
How it works in My Rental Spot: the move-in inspection is a room-by-room checklist with photos taken in the app, signed by both parties on the phone; the deposit sits on the tenant's ledger with its receipt; and at move-out the same photos sit side by side with the new ones. See the move-in day checklist.
Frequently Asked Questions
How much security deposit can a landlord charge?
Roughly half the states cap it — most at one or two months' rent — and the rest leave it to the lease, where one month is standard. The table above has fifteen states and the state pages have all fifty.
Does the deposit have to be in a separate bank account?
In about a third of states, yes, and several of those also require the tenant to be told the bank's name. Even where it is not required, a separate account keeps the money intact and makes the ledger clear if there is ever a dispute.
Do I have to pay interest on a security deposit?
In about ten states and a few cities. The rate is small — often tied to the bank's passbook rate — and it is paid or credited annually or at move-out. Skipping it where required can forfeit the right to deduct.
Can I charge a non-refundable move-in fee instead of a deposit?
Some states allow non-refundable fees if the lease clearly calls them non-refundable; California, Montana and others prohibit or restrict them. Where allowed, a fee cannot be relabelled a deposit later — it is one or the other.
What if the tenant will not sign the move-in condition report?
Send it to them in writing with the photos, note the date it was delivered and that they were invited to add to it, and keep that record. An unsigned report with dated photos and proof of delivery is still strong evidence; no report is not.
A move-in report that holds up a year later
Room-by-room checklist, photos in the app, both signatures — and the deposit on the ledger with its receipt.
100% free forever. No monthly fees, unlimited properties.
Get Started Free →No credit card required • 5 minute setup
Want more getting started articles?
← Explore More Articles