Connecticut Security Deposit Collections & Holdings

Connecticut Security Deposit Collections & Holdings

Last Updated: February 9, 2023 by Ashley Porter

Quick Facts Answer
Maximum / Limit 1 or 2 Months’ Rent
Receipt Requirement Cash Payments Only
Inventory Requirement None
Interest Requirement Yes

To learn about laws on security deposit returns in Connecticut, click here.

Maximum Security Deposit Allowed in Connecticut

Connecticut law limits the maximum security deposit to two months’ rent. However, the maximum security deposit is one month’s rent if the tenant is 62 years old or older.

If a tenant turns 62 years old during a lease term, the landlord must return a portion of the security deposit so it does not exceed one month’s rent if requested by the tenant.

Exception: Landlords can collect an additional deposit for a key or special equipment that exceeds these limits.

Can Landlords Charge an Additional Pet Deposit in Connecticut?

In Connecticut, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total security deposit cannot exceed two months’ rent (or one month for tenants 62 or over). Landlords cannot exceed the limit by giving them another name like “pet deposit” or “damage deposit.”

This law does not prevent landlords from adding a monthly pet premium.

How Much Rent Can a Landlord Collect Upfront in Connecticut?

Landlords in Connecticut can collect the first month’s rent in advance. However, landlords can only collect two additional months’ rent in advance, whether called a “security deposit” or “last month’s rent,” unless the tenant is 62 or older.

“Last month’s rent” is considered a security deposit by the law and must be treated according to the same rules.

Security Deposit Collections in Connecticut

When collecting a security deposit, landlords in Connecticut must provide a written disclosure to the tenant including the amount of the deposit and the name and address of the depository where the security deposit will be held in escrow.

Do Landlords Have to Provide a Receipt for the Security Deposit in Connecticut?

Landlords in Connecticut are required to provide a receipt for security deposits paid in cash. The receipt must state:

  • The date and amount received
  • The purpose of the payment

What Obligations Do Landlords Have to Establish the Condition at Move-in in Connecticut?

Connecticut law does not require landlords to document or establish the property’s condition at move-in. While other states legally require a written inventory of damages to be completed when collecting a security deposit, Connecticut does not.

Security Deposit Holdings in Connecticut

Landlords in Connecticut must promptly deposit and hold security deposits in an escrow account in a financial institution within the state. Security deposits cannot be commingled with a landlord’s own funds.

Landlords must provide tenants with written notice within 30 days after receipt of the security deposit (or transfer to a different account) including:

  • The amount held for the tenant
  • The name and address of the financial institution

The landlord is not allowed to withdraw funds from the escrow account except to:

  • Return the security deposit (or part of it) to the tenant
  • Give the tenant interest
  • Transfer the security deposit to a new owner
  • Take interest not owed to a tenant
  • Pay for costs chargeable to the security deposit
  • Transfer the security deposit into a different escrow account

Are Tenants Entitled to Interest on Their Security Deposit in Connecticut?

Landlords in Connecticut do owe interest on security deposits, except for dorms and mobile homes. The minimum interest rate is 0.27% for 2023. However, tenants are not entitled to interest for any month in which they paid rent more than 10 days late unless the landlord charges a late rent fee.


In Connecticut, last month’s rent collected in advance is considered a security deposit and thus, tenants are entitled to interest.

On every anniversary date of a lease term, landlords must either pay accrued interest directly or credit the tenant’s next rent payment (whichever option the landlord prefers). If landlords return all or a portion of the security deposit during a tenancy, they must also return the accrued interest within 30 days.

How Are Security Deposits Accounted for in Connecticut?

Security deposits are not considered taxable income when they are collected.

What Happens to a Security Deposit When the Property is Sold in Connecticut?

When a property is sold in Connecticut, the seller must transfer the security deposit with interest to the new owner, who must handle it according to the same rules.

The new owner must send written notice to the tenant within 30 days of receiving the security deposit including:

  • The amount held for the tenant
  • The name and address of the financial institution