Security Deposits: Maryland Has Strict Laws, and Property Managers and Landlords Must Know Them!
The last thing any property manager needs is to end up in a lawsuit over a security deposit.
In Maryland, security deposits must be returned to tenants within 45 days of vacating. Also, within 30 days, the landlord must send to the tenants at their last known address a detailed statement itemizing anything that is being charged to the tenants from their security deposit. The more detail the better. A record of the condition of the property via a signed walkthrough document at the beginning of the lease is very important to keep on record. This can be compared to the condition of the property at lease end. Failure of the landlord at lease end to actually inspect the property and to send a notice to the tenants will forfeit the landlord’s right to withhold any portion of the security deposit. This is true even if the tenants left the property totally trashed.
It is also illegal for any landlord or property management company to charge tenants more than twice the monthly rental rate for the security deposit. If tenants are charged a security deposit that is more than twice the rental rate, the landlord is liable to pay back to the tenants three times the extra amount charged plus reasonable attorney's fees.
The property manager must deposit the funds in a designated account reserved exclusively for security deposits and, according to Maryland law, must pay the tenants interest at 4% per year regardless of the actual interest earned.
Dan Stein is the president and founder of Silver River Real Estate, providing property management services in PG County, Anne Arundel and Montgomery counties since 2002.