Maximum deposit, return deadlines, and interest rules under Ind. Code § 32-31-1-6
| Metric | Value | Source |
|---|---|---|
| Maximum security deposit | No statewide cap | Ind. Code § 32-31-1-6 |
| Return deadline after move-out | 45 days | Ind. Code § 32-31-1-6 |
| Interest required on deposit | No | Ind. Code § 32-31-1-6 |
| Itemized statement required | Yes, for all deductions | Ind. Code § 32-31-1-6 |
| Nonpayment notice period | 10 days pay-or-quit | Ind. Code § 32-31-1-6 |
| Statewide average gross rent | $924/mo | ACS 2023 |
Indiana does not set a statewide maximum on security deposits — landlords may collect any amount they can justify as reasonable, provided no local ordinance applies. The deposit must be returned within 45 days after the tenancy ends, together with a written, itemized list of any deductions.
Landlords in Indiana may lawfully deduct from the security deposit for: unpaid rent, damage to the unit beyond normal wear and tear, required professional cleaning not performed by the tenant, and unreturned keys or access devices. Deductions for ordinary wear and tear — scuff marks, minor carpet wear, faded paint — are generally not permitted under Indiana law.
Tenants who do not receive their deposit (or an itemized statement) by the deadline may be entitled to penalties — sometimes double or triple the withheld amount, plus attorney fees. Courts take deposit violations seriously; failure to provide an itemized list within the statutory period often forfeits the landlord's right to make any deductions at all.
A high security deposit limit can increase tenant financial barriers at move-in, contributing to housing instability and higher eviction rates. Indiana's lack of a deposit cap is one factor in our overall landlord risk score for the state.
Cities with the highest median rents — and therefore the largest absolute deposit amounts — in Indiana include:
Indiana has no statewide cap on security deposits. Landlords may charge any "reasonable" amount, though local ordinances in some cities may impose limits.
Landlords in Indiana must return the security deposit within 45 days after the tenant vacates, along with an itemized list of any deductions.
No, Indiana does not require landlords to pay interest on security deposits. (Some municipalities may have stricter rules.)
Landlords in Indiana may typically deduct for unpaid rent, damage beyond normal wear and tear, and cleaning costs required to restore the unit to its original condition. They must provide an itemized written list of deductions. Deductions for ordinary wear and tear are generally prohibited.
NextGen Properties handles security deposit accounting, itemization, and return deadlines to keep Indiana landlords compliant and out of court.
Informational only, not legal advice. Consult a licensed attorney for your specific situation. Source attribution in the Sources band below.
