Maryland’s One-Month Security Deposit Cap: A Landlord-Focused Compliance and Risk Playbook
Maryland has materially changed the economics of leasing by reducing the standard maximum security deposit from two months to one month’s rent for most new residential leases. For landlords, the change is less about politics and more about operational reality: you now have less cash collateral to cover move-out risk, so underwriting, documentation, and lease enforcement need to tighten.
This post summarizes the statute (with a direct quote), flags the built-in exception, and lays out practical adjustments for landlords.
The new baseline rule: one month, per unit
Maryland Real Property § 8-203(b)(1) now states:
“Except as provided in paragraph (2) of this subsection, a landlord may not impose a security deposit in excess of … 1 month’s rent…”
Two practical points embedded in the statute:
The cap is per dwelling unit, not per tenant.
“Security deposit” is defined broadly and includes money collected as “last month’s rent” paid in advance.
The statutory exception: up to two months only in a specific utility-assistance scenario
The statute allows up to two months’ rent only if all of the following are true:
The tenant qualifies for utility assistance through the Maryland Department of Human Services,
The lease requires the tenant to pay utilities directly to the landlord, and
The parties agree in writing to the deposit amount. Maryland General Assembly+1
If you are not squarely inside that fact pattern, treat one month as the maximum.
Enforcement risk: the penalty lever remains sharp
Maryland retains strong remedies for overcharging. Under § 8-203(b)(3), if a landlord violates the cap, the tenant may recover up to three times the extra amount charged, plus attorney’s fees.
This is not an “oops” mistake category—over-collection can become expensive quickly.
Effective timing: why October 1, 2024 matters
State guidance and tenant-facing materials explain that the one-month cap applies beginning October 1, 2024 (with the narrow exception noted above).
If you are using legacy forms or templates, assume they are outdated unless updated for post–October 1, 2024 leasing.
What landlords should do now
1) Reprice risk upstream: screening is your new “second month”
With reduced deposit coverage, screening has to carry more weight:
Verify income stability and employment continuity
Tighten landlord reference checks (payment history + condition of unit)
Review credit behavior patterns (collections, judgments, delinquencies), not just score
2) Operationalize documentation: condition evidence is now a profit center
With only one month available, you have less room for disputed deductions.
Standardize move-in inspection reports
Photo/video the unit with date stamps
Require signed acknowledgement of condition at delivery
Maintain invoices/estimates that tie damages to unit condition and tenant occupancy
3) Refresh lease language and front-end disclosures
At minimum, your lease package should be updated so it does not inadvertently:
Label additional fees as “deposit” (risking recharacterization)
Collect “last month’s rent” in advance (captured by the statutory definition)
Conflict with deposit handling requirements (escrow/interest rules, inspection rights, itemization timelines)
4) Consider (carefully) the surety bond option
Maryland law permits tenants to use a surety bond in lieu of paying all/part of the deposit, subject to statutory conditions and disclosures, and it regulates combined totals in certain situations. Maryland General Assembly+1
Landlords should evaluate this like any third-party risk product: claims process, exclusions, tenant reimbursement mechanics, and administrative burden.
Bottom line
Maryland’s statewide rule is now clear: one month’s rent is the general maximum security deposit, with a narrow, documented exception tied to DHS utility assistance and utility payments made directly to the landlord.
All of MarylandLandlordForms.com leases and security deposit documents are updated to reflect the change in Maryland law.
