Tennessee Security Deposit Collections & Holdings

Tennessee Security Deposit Collections & Holdings

Last Updated: January 13, 2023 by Ashley Porter

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

Maximum Security Deposit Allowed in Tennessee

There is no limit on how much a landlord can collect for a security deposit in Tennessee. While other states impose a maximum security deposit limit, such as one month’s rent, Tennessee does not.

Can Landlords Charge an Additional Pet Deposit in Tennessee?

Yes, landlords can collect an additional pet deposit in Tennessee, except for service dogs and emotional support animals.

How Much Rent Can a Landlord Collect Upfront in Tennessee?

There is no limit on the amount of rent that can be collected upfront in Tennessee. Many states have a limit on the amount of rent that can be collected at once, but Tennessee does not.

Security Deposit Collections in Tennessee

While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, Tennessee does not.

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

While landlords in Tennessee must provide a written disclosure to tenants containing the location 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 Tennessee?

Tennessee 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, Tennessee does not.

Security Deposit Holdings in Tennessee

Landlords in Tennessee must hold security deposits in a state or federally-regulated financial institution. The security deposits must not be mixed with the landlord’s own funds. When the lease is signed and the security deposit is collected the landlord must notify the tenant in writing of the location of the financial institution.


Counties with populations smaller than 75,000 (as of the 2010 US Census) are exempt from the security deposit rules, including the holding requirements.

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

Tennessee law does not require landlords to provide interest on held security deposits.

How Are Security Deposits Accounted for in Tennessee?

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

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

When a property is sold in Tennessee, the original landlord must transfer the security deposit to the new owner and notify the tenant in writing that the security deposit was transferred.