Overview
Kentucky security deposit laws are governed by the Uniform Residential Landlord and Tenant Act (URLTA), KRS § 383.580. Kentucky's laws are opt-in at the municipal level, meaning not all areas follow URLTA. For areas that have opted in, the law requires separate deposit accounts, move-out inspections, and provides for double damages. Passive's deposit management platform helps landlords stay compliant across different jurisdictions.
Maximum Security Deposit
Kentucky does not currently have a statewide limit on security deposit amounts if it is specified in the lease agreement.
- Deposits typically range from one to two months' rent
- Pet deposits are often an additional month's rent
Note: Municipalities that have opted into URLTA may have additional local restrictions.
Return Timeline
Under KRS § 383.580, landlords must return the security deposit within 30 days after the tenant moves out and provides a forwarding address.
- Must provide a detailed, itemized list of any deductions
- The remaining balance must be delivered with the itemized statement
Unclaimed Deposits
If the tenant does not respond within 60 days after the landlord sends the itemized statement:
- The landlord may withdraw the withheld portion from the deposit account
- The landlord can keep the unclaimed amount
Storage Requirements
Kentucky has strict requirements for where deposits must be held: (Tennessee takes a similar approach—see Tennessee security deposit laws.)
- Deposits cannot be mixed with other funds
- Must be kept in separate accounts at a Kentucky bank, U.S. government agency, or lending institution
- Tenants must be informed of the name, location, and account number
- Critical: If the deposit is not placed in a separate account, the landlord cannot keep any money from it
Interest Requirements
Kentucky does not require landlords to pay interest on security deposits, regardless of whether the deposit is held in an interest-bearing account.
Move-Out Inspection Process
Kentucky requires a formal inspection process:
- At the end of the tenancy, the landlord must inspect the premises
- Compile a comprehensive list of damages and estimated repair costs
- Provide the list to the tenant
- The tenant has the right to inspect the premises to verify accuracy
- Both parties must sign the list to confirm accuracy
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Cleaning costs to return the unit to move-in condition
Normal wear and tear cannot be charged to the tenant.
Penalties for Non-Compliance
If the landlord doesn't provide an itemized list within 30 days:
- The tenant can sue for double the amount wrongfully withheld
- Plus attorney's fees and court costs
Municipal Variation
Because URLTA is opt-in at the municipal level, rules may vary by area. Always verify the regulations applicable in your specific location.
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. See how Passive works to simplify move-in and move-out inspections.
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.