Overview
Delaware security deposit laws are governed by Delaware Code Title 25, Chapter 55, § 5514. Delaware has strict escrow requirements, one of the shortest return deadlines in the nation (20 days), and double damages penalties for violations. Passive's deposit management platform helps landlords meet these tight deadlines.
Maximum Security Deposit
Delaware's security deposit limits depend on the lease term:
- Leases of 1 year or longer: Maximum of 1 month's rent
- Leases less than 1 year: No statutory limit
- Furnished units: No statutory limit
Pet Deposits
Landlords may charge an additional pet deposit of up to one month's rent. Service animals and certified support animals are exempt from pet deposits under federal and state law.
Return Timeline
Delaware landlords must return the security deposit within 20 days after the tenant moves out—one of the shortest deadlines in the country.
- Must provide an itemized list of deductions with any remaining balance
- If the tenant fails to provide a forwarding address, the landlord must hold the deposit in a bank account for one year
- If unclaimed after one year, the deposit becomes the landlord's property
Interest Requirements
Delaware has conditional interest requirements: (neighboring Maryland—see Maryland security deposit laws.)
- If the deposit is held for more than one year, the landlord must pay the tenant annual interest at a rate determined by the State of Delaware
- For deposits held less than one year, no interest is required
Storage Requirements
Delaware has strict storage requirements:
- Deposits must be held in an escrow account at a federally insured financial institution
- The institution must do business in Delaware
- Within 20 days of receiving the deposit, landlords must provide written notice to the tenant of the name and location of the bank
Allowable Deductions
Landlords may deduct from the security deposit for:
- Damages beyond normal wear and tear
- Unpaid rent, late fees, and termination fees
- Reasonable expenses related to early termination of the rental agreement
Normal wear and tear cannot be charged to the tenant.
Penalties for Non-Compliance
Delaware has significant penalties for violations:
- Failure to return the deposit within 20 days may result in liability for double the amount wrongfully withheld
- Failure to disclose the location of the deposit can also trigger double damages
- Court costs may be awarded to the prevailing tenant
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. Request a demo to see how Passive streamlines documentation.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.