Tennessee sets no statutory cap on security deposits. Under Tenn. Code Ann. § 66-28-301, landlords in counties over 75,000 must hold deposits in a separate account, let the tenant inspect at move-out, and provide an itemized damage list. If a refund notice goes unanswered for 60 days, the landlord may keep the balance.
Tenn. Code Ann. § 66-28-301, part of the Uniform Residential Landlord and Tenant Act, applies only in counties with a population over 75,000 (§ 66-28-102); smaller counties fall under general law. The statute imposes no dollar cap on the deposit. Landlords must deposit funds in an account "used only for that purpose." At move-out the tenant has a right to inspect within four days, and the landlord and tenant "shall inspect the premises and compile a comprehensive listing of any presently ascertainable damage" and both sign it. The landlord must give an itemized damage list on the tenant's written request. If the landlord sends a refund notice and the tenant does not respond within 60 days, the landlord may keep the balance free of the tenant's claim.
Under Tenn. Code Ann. § 66-28-301, a landlord who fails to keep the deposit in a separate account and to provide the required itemized listing of damages forfeits the right to retain any portion of the security deposit. The tenant may then recover the full deposit.
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