Indiana Security Deposit and Damage Deposit Rules Explained

As a renter in Indiana, understanding the difference between a security deposit and a damage deposit is vital when signing a lease, moving out, or disputing deductions. These terms often get used interchangeably, but Indiana law makes clear distinctions that affect your rights and obligations as a tenant. This article explains how these deposits work, your legal protections, and what to do if disputes arise.

Security Deposit vs. Damage Deposit: What's the Difference?

In Indiana, the law primarily uses the term "security deposit." While some landlords might refer to a "damage deposit," both fall under the same legal definition. The security deposit can cover unpaid rent, damages beyond normal wear and tear, and other breaches of lease. Here's a breakdown:

• Security Deposit: A sum of money held by the landlord as collateral for damages, unpaid rent, or breaches of lease (except for normal wear and tear).
• Damage Deposit: Sometimes used to refer to money specifically for property damage, but Indiana law includes it within the security deposit definition.

Landlords cannot require both a "security deposit" and a "damage deposit" separately for the same rental unit.^[1]

Legal Rules for Security Deposits in Indiana

Indiana law sets specific requirements for how security deposits are handled:

• No legal limit on the amount a landlord can request as a deposit.
• Deposits must be returned within 45 days after the tenant moves out and provides a forwarding address.
• Landlords can deduct for unpaid rent, cleaning costs (above normal use), and damage beyond normal wear and tear.
• A written notice of any deductions with an itemized list must be sent to the tenant.

When Deposits Can Be Withheld

• Nonpayment of rent or utilities
• Repair costs for excessive damage
• Cleaning necessary to return the unit to its original condition, minus normal wear and tear

If your landlord withholds all or part of your deposit, they must give you an itemized written notice listing all deductions within 45 days.^[1]

How to Get Your Security Deposit Back in Indiana

To maximize the chance of getting your full deposit back:

• Give your landlord a forwarding mailing address in writing when you move out.
• Take photos and document the apartment’s condition when you move in and out.
• Request a move-out inspection with your landlord present, if possible.
• Keep a copy of your lease, payment records, and communications with your landlord.

Relevant Forms and Practical Steps

• Indiana Small Claims Court Complaint (No standard state-wide form):
  
  • When to use: If your deposit isn’t returned within 45 days, file a small claims action.
  • How to use: Visit your local Indiana county court, fill out the complaint, and file it. Example: If your landlord withholds your deposit without explanation, complete the Small Claims Complaint and submit it to your county's small claims division.
  • Indiana Courts: Landlord-Tenant Self-Help Forms
• Move-Out Notice (Not required by law, but recommended):
  
  • When to use: Let your landlord know you’re leaving and provide your forwarding address.
  • How to use: Write a short letter or email stating your move-out date and future mailing address. Example: Jane, a renter in Indianapolis, emails her landlord her new address when moving out to ensure prompt deposit return.

Which Agency Handles Rental Disputes in Indiana?

Rental deposit and tenancy disputes in Indiana are typically handled by the local county Small Claims Court (part of the civil division of the county court system). There is no centralized state "tenant board," but the Indiana Courts system provides resources and forms for landlord-tenant disputes.

Relevant Indiana Legislation

• Indiana Code Title 32, Article 31, Chapter 3 – Security Deposits
• Indiana Code Title 32, Article 31 – Landlord-Tenant Relations

Frequently Asked Questions about Deposits in Indiana

1. Is there a limit to how much security deposit a landlord can charge in Indiana?
   No, Indiana law does not set a maximum limit for security deposits.
2. How soon must my security deposit be returned after I move out?
   Landlords must return the deposit or a written, itemized list of deductions within 45 days after you provide your forwarding address.
3. Can a landlord keep my deposit for normal wear and tear?
   No, Indiana law requires landlords to subtract normal wear and tear from any deductions. Only damage beyond routine use can be charged.
4. What should I do if my landlord won't return my deposit?
   You may file a claim in your local Indiana small claims court. Bring documentation such as your lease, payment records, and photos of the rental’s condition.
5. Do I have to give a forwarding address to get my deposit back?
   Yes, Indiana law requires renters to provide a mailing address for the return of the deposit.

Key Takeaways for Indiana Renters

• Security and damage deposits are treated the same under Indiana law.
• Your landlord must provide an itemized statement or return your deposit within 45 days if you gave a forwarding address.
• If you believe your deposit was wrongfully withheld, use Indiana small claims court.

Need Help? Resources for Renters

• Indiana Courts Landlord-Tenant Self-Service Center: Guidance and forms for landlord-tenant disputes
• Indiana Housing & Community Development Authority: General rental assistance and tenant rights information
• Indiana Legal Services: Free or low-cost legal help for renters
• Find your county’s Small Claims Court: File a complaint for unreturned deposits

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1. Indiana Code § 32-31-3 – Security Deposits
2. Indiana Courts Landlord-Tenant Self-Service Center

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