Indiana law sets minimal limits on rental security deposits, and Indianapolis cannot add stricter rules. Landlords may charge any amount but must return the deposit within forty-five days with an itemized statement of deductions.
Indiana Code 32-31-3 governs security deposits statewide and preempts local variations. There is no statutory cap on deposit amount, so landlords commonly charge one to two months' rent. Within forty-five days after a tenant vacates and provides a forwarding address, the landlord must return the deposit or send an itemized list of damages and unpaid rent. Tenants who do not get a timely accounting can sue for the full deposit plus attorney fees. Indianapolis Tenant Assistance and Right to Counsel program (TARC) helps tenants navigate disputes but cannot raise the floor above state law.
Failure to itemize within forty-five days forfeits the landlord's right to deductions. Tenants can recover the deposit plus reasonable attorney fees in small claims court.
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See how Indianapolis's security deposit rules rules stack up against other locations.
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