| Quick Facts | Answer |
| Maximum / Limit | Usually One Month’s Rent |
| Receipt Requirement | None |
| Inventory Requirement | None |
| Interest Requirement | None |
To learn about laws on security deposit returns in Delaware, click here.
Some cities and counties may have regulations which are more restrictive than those presented here. Always check local laws.
Maximum Security Deposit Allowed in Delaware
Delaware law limits the maximum security deposit to one month’s rent if the lease term or tenancy is one year or longer. However, some situations have different rules.
Exceptions. Different security deposit limits apply for a:
- Federally-assisted housing program: Federal rules apply
- Lease term shorter than one year: No limit
- Furnished rental unit: No limit
- Tenant with a pet: Landlord can add an additional one month’s rent
If a tenant on a month-to-month lease stays in the rental unit for longer than one year, the landlord must return any portion of the security deposit to ensure no more than one month’s rent is held.
Mobile Homes. The maximum security deposit for a mobile home is one month’s rent regardless of the length of the lease term and whether the home is furnished. However, landlords can add one month’s rent if the tenant has a pet.
Increasing the Security Deposit. If a landlord increases the security deposit by more than 10% of the monthly rent (when permitted to do so), they must prorate the payment:
- Month-to-month: Prorated over 4 months
- Other lease terms: Prorated over the term of the rental agreement
Can Landlords Charge an Additional Pet Deposit in Delaware?
In Delaware, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the additional pet deposit cannot exceed one month’s rent, regardless of the length of the lease term.
How Much Rent Can a Landlord Collect Upfront in Delaware?
There is no limit on the amount of rent that can be collected upfront in Delaware. Prepaid rent is not considered part of the security deposit.
Security Deposit Collections in Delaware
When collecting a security deposit, landlords in Delaware must disclose the name and location of the bank account where the deposit will be held.
Do Landlords Have To Provide a Receipt for the Security Deposit in Delaware?
While landlords in Delaware must provide a disclosure to tenants indicating where the security deposit will be held, an additional receipt of the deposit is not required to be provided.
What Obligations Do Landlords Have To Establish the Condition at Move-in in Delaware?
Delaware law does not have specific obligations before a tenancy. While other states like Washington have pre-tenancy obligations like a written inventory of damages, Delaware does not.
Security Deposit Holdings in Delaware
Landlords in Delaware must hold security deposits in a federally-insured bank with an office in the state. The deposits must be kept separate from the landlord’s own funds and cannot be used in the operation of any business by the landlord.
If a landlord fails to hold the security deposit in a bank account or disclose the location within 20 days’ written request by the tenant, they forfeit the full deposit. If the landlord fails to return the deposit and another 20 days pass, the tenant can sue for twice the deposit.
Are Tenants Entitled to Interest on Their Security Deposit in Delaware?
Delaware law does not require landlords to provide interest on held security deposits.
How Are Security Deposits Accounted for in Delaware?
Security deposits are not considered taxable income when they are collected.
What Happens to a Security Deposit When the Property is Sold in Delaware?
Delaware law does not regulate the handling of a security deposit when a property is sold. However, the landlord in possession of the security deposit must handle it according to the applicable rules.
Sources
- 1 Del. Code tit. 25 § 5514(a)
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(1) A landlord may require the payment of security deposit.
(2) No landlord may require a security deposit in excess of 1 month’s rent where the rental agreement is for 1 year or more.
(3) No landlord may require a security deposit in excess of 1 month’s rent (with the exception of federally-assisted housing regulations), for primary residential tenancies of undefined terms or month to month where the tenancy has lasted 1 year or more. After the expiration of 1 year, the landlord shall immediately return, as a credit to the tenant, any security deposit amount in excess of 1 month’s rent, including such amount which when combined with the amount of any surety bond is in excess of 1 month’s rent.
(4) The security deposit limits set forth above shall not apply to furnished rental units.
Source Link - 2 Del. Code tit. 25 § 7017(a)
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(1) A landlord may require a tenant to pay a security deposit if provided for in the rental agreement. (2) A landlord may not require a tenant to pay a security deposit in an amount in excess of 1 month’s rent unless the tenant agrees to do so and the full amount is specified in the rental agreement.
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- 3 Del. Code tit. 25 § 5514(j)
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If the rental agreement so specifies, a landlord may increase the security deposit commensurate with the rent. If the increase of the security deposit will exceed 10 percent of the monthly rent, payment of the increased security deposit shall be prorated over the term of the rental agreement, except in the case of month-to-month tenancy, in which case payment of the increase shall be prorated over a period of 4 months.
Source Link
- 4 Del. Code tit. 25 § 5514(i)
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(1) A landlord may require a pet deposit. Damage to the rental unit caused by an animal shall first be deducted from the pet deposit. Where the pet deposit is insufficient, such damages may be deducted from the security deposit. A pet deposit is subject to subsections (b), (e), (f), (g) and (h) of this section.
(2) No landlord may require a pet deposit in excess of 1 month’s rent, regardless of the duration of the rental agreement.
(3) A landlord may require an additional deposit from a tenant with a pet, but shall not require any pet deposit from a tenant if the pet is a duly certified and trained support animal for a disabled person who is a resident of the rental unit.
Source Link - 5 Del. Code tit. 25 § 5514(b)
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Each security deposit shall be placed by the landlord in an escrow bank account in a federally-insured banking institution with an office that accepts deposits within the State. Such account shall be designated as a security deposits account and shall not be used in the operation of any business by the landlord. The landlord shall disclose to the tenant the location of the security deposit account. The security deposit principal shall be held and administered for the benefit of the tenant, and the tenant’s claim to such money shall be prior to that of any creditor of the landlord, including, but not limited to, a trustee in bankruptcy, even if such money is commingled.
Source Link - 6 Del. Code tit. 25 § 5514(g)
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(1) Failure to remit the security deposit or the difference between the security deposit and the amount set forth in the list of damages within 20 days from the expiration or termination of the rental agreement shall entitle the tenant to double the amount wrongfully withheld.
(2) Failure by a landlord to disclose the location of the security deposit account within 20 days of a written request by a tenant or failure by the landlord to deposit the security deposit in a federally-insured financial institution with an office that accepts deposits within the State, shall constitute forfeiture of the security deposit by the landlord to the tenant. Failure by the landlord to return the full security deposit to the tenant within 20 days from the effective date of forfeiture shall entitle the tenant to double the amount of the security deposit.
Source Link
