Indiana sets no statutory limit on the security deposit amount. Under Indiana Code 32-31-3, a landlord must return the deposit, minus itemized lawful deductions, within 45 days after the rental agreement ends and possession is delivered. A landlord who fails to provide the required itemized notice forfeits the right to keep any of the deposit.
Indiana Code 32-31-3 governs residential security deposits and imposes no maximum amount. Under IC 32-31-3-12, a landlord "shall return" the deposit minus any sums for accrued rent, damages from the tenant's noncompliance, and unpaid utility or sewer charges, "itemized by the landlord with the amount due in a notice that is delivered to the tenant not more than forty-five (45) days after termination of the rental agreement and delivery of possession." Permitted deductions exclude ordinary wear and tear. IC 32-31-3-14 requires the itemized list of damages. Under IC 32-31-3-15, failing to provide that notice constitutes agreement that no damages are owed, requiring return of the full deposit. The landlord is not liable until the tenant gives a written mailing address.
Under Indiana Code 32-31-3-15 and 32-31-3-16, a landlord who fails to deliver the itemized damages notice within 45 days agrees no damages are due and must return the full deposit; a non-complying landlord is liable for the amount wrongfully withheld plus reasonable attorney's fees and court costs.
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