Kentucky’s security deposit laws give landlords a clear avenue to help them avoid issues like disagreements over deductions or confusion about return timelines. As a result, landlords who understand their rights and responsibilities have more control over their rentals and deal with far fewer disputes.
In this guide, you will learn everything needed to manage deposits, including maximum amounts landlords can collect, how to store them, whether interest applies, legal reasons to deduct, protocols for returning deposits, handling disputes, and more.
Statutes Regulating Kentucky Security Deposits
Kentucky’s security deposit laws appear in chapters 383.580 to 383.585 of the Kentucky Revised Statutes. These regulations help landlords understand how to collect deposits, document property conditions, make lawful deductions, and return funds when a tenancy ends.
Maximum Security Deposit Amounts Under Kentucky Law
Kentucky law sets no limit on security deposit amounts. As such, landlords can choose a fair deposit amount that makes sense for the rental, since the law does not impose any conditions or adjustments based on tenancy length or rental type.
In Kentucky, there are no exceptions to these security deposit rules.
Security Deposit Storage Regulations
Kentucky instructs landlords to keep every security deposit in a dedicated account used only for tenant funds. Landlords must also provide written notice to the tenant stating the account’s location and maintain clear records showing the amount held for each tenancy.
For example, a landlord cannot place security deposit funds into a personal or operating account because doing so violates state rules and limits proper tracking.
Security Deposit Interest in Kentucky
Kentucky does not require landlords to keep security deposits in interest-bearing accounts. Landlords can store deposits within any account that meets state storage rules and do not need to calculate, collect, or return interest to tenants.
Making Security Deposit Deductions
When tenants miss rent or cause damage beyond normal wear and tear, landlords need to use deposit funds to cover these tenant-caused expenses.
When Landlords Can Deduct
Landlords in Kentucky may draw from a tenant’s security deposit for the following reasons:
- Damage beyond normal wear and tear that requires repairs after move-out
- Unpaid rent that remains due at the end of the tenancy
- Cleaning costs are needed to correct excessively dirty conditions
- Replacement of missing fixtures or items listed on the move-in checklist
- Costs linked to lease violations that directly cause property damage
When Landlords Can’t Deduct
Landlords in Kentucky may not draw from a tenant’s security deposit for the following reasons:
- Minor cosmetic marks or scuffs that occur through ordinary use
- Routine cleaning tasks normally completed between tenant turnovers
- Upgrades or improvements unrelated to tenant-caused issues or damage
- Repairs tied to conditions noted in the original move-in inspection
- Costs resulting from normal aging or the natural deterioration of materials
Necessary Documentation to Accompany Deductions
Kentucky requires landlords to give tenants a written, itemized list of all security deposit deductions. This list must explain each charge and the amount withheld. Kentucky law does not require landlords to attach receipts or invoices, however, though holding onto them can help support any deductions if disputes arise.
What to Do When Deductions are Greater Than the Deposit
Sometimes tenants leave damage or unpaid balances that exceed the security deposit. When this happens, landlords can request the remaining amount directly and should document the balance in writing. Kentucky sets no specific timeframe for collecting these additional funds, allowing landlords to follow standard collection practices.
Landlords who cannot recover the balance may file a claim in their local Kentucky small claims court in an attempt to collect the money they’re owed.
Returning Security Deposits to Tenants
Kentucky law sets clear regulations for how landlords must return any remaining portion of a tenant’s security deposit after lawful deductions are applied, including:
Required Timeline for Return
Kentucky instructs landlords to return any remaining deposit and an itemized deduction list within 30 days after the tenant vacates. The 30-day period begins once the tenant leaves the unit and the landlord retakes possession.
Method for Return
Landlords must send the remaining deposit to the tenant’s last known or forwarding address, usually by check or another traceable method. Kentucky also requires landlords to include an itemized list of deductions with the returned funds to show how the deposit was used.
Penalties for Late Return
When a landlord misses Kentucky’s 30-day deadline, the landlord loses the right to keep any portion of the deposit. If the landlord does not return the funds, tenants may attempt to recover the full amount in court. Further, landlords risk additional liability if the court finds the landlords improperly withheld the deposit.
Security Deposit Disputes
Tenants who disagree with how a landlord handles their security deposit have the right to raise a dispute. To do so, they should start by contacting their landlord directly and requesting written clarification. Providing photos, documents, or formal complaints can only help their case if they believe the deductions and/or the return process were mishandled.
Landlords should get out ahead of potential disputes by using move-in and move-out checklist forms, staying current with accounting and bookkeeping practices, and setting clear terms in their lease agreements. Strong documentation, routine inspections, understanding Kentucky laws, and meeting required timelines will also helps landlords during disputes.
Using Condition Reports to Document Damage
Managing security deposits in Kentucky becomes far easier when landlords use thorough move-in and move-out condition reports. Digital condition reports accurately document each unit, prevent disagreements, and give landlords clear records that simplify handling security deposit decisions.
Landlords should consider using property management software to create digital reports with photos and videos directly from their smartphones. By documenting a property’s condition before move-in and after move-out, landlords build solid evidence to support each and every security deposit deduction.
Sign up for a free TurboTenant account to simplify inspections and keep every report organized in one place.
FAQs: Kentucky Security Deposit Law
Can a landlord deduct painting from a security deposit in Kentucky?
A landlord in Kentucky may deduct painting costs only when a tenant leaves wall damage that goes beyond normal wear and tear. Routine repainting between tenants counts as a standard turnover task, so landlords cannot charge tenants for those expenses.
Are nail holes considered normal wear and tear in Kentucky?
Small nail holes generally count as normal wear and tear in Kentucky. Landlords may deduct only when tenants leave larger holes or excessive wall damage that requires extra patching or repainting beyond what typical occupancy creates.
Does the landlord or tenant have to pay for carpet cleaning in Kentucky?
A landlord may charge for carpet cleaning only when tenants leave stains, heavy soil, or damage beyond normal wear and tear. Standard carpet cleaning between tenants counts as a routine turnover step, so landlords cannot charge tenants for ordinary maintenance.
What happens if a landlord doesn’t return a security deposit within 30 days in Kentucky?
A landlord who misses Kentucky’s 30-day deadline loses the right to keep any portion of the security deposit. Tenants may recover the full amount and pursue the funds in court if the landlord fails to return the deposit on time.
