Indiana: Security Deposit Return Deadlines & Deductions

Requirements one by one

Governing law

Indiana's rules live in the Security Deposits chapter of its landlord-tenant
code, primarily Ind. Code §§ 32-31-3-12 through 32-31-3-16.

Deadline to return the deposit

The deadline is 45 days, but it's gated on two separate triggers happening
first. The statute requires the landlord to act "not more than forty-five
(45) days after termination of the rental agreement and delivery of
possession," and separately makes clear "[t]he landlord is not liable under
this chapter until the tenant supplies the landlord in writing with a mailing
address to which to deliver the notice and amount prescribed by this
subsection" (§ 32-31-3-12(a)). In practice: the lease has to be over, you
have to have moved out, and you have to have given the landlord a written
forwarding address — only once all three have happened does the 45-day clock
meaningfully run.

Itemized statement required?

Yes, and it has to be substantive, not a lump sum. "[A] landlord shall mail
to a tenant an itemized list of damages claimed for which the security
deposit may be used... The list must set forth: (1) the estimated cost of
repair for each damaged item; and (2) the amounts and lease on which the
landlord intends to assess the tenant" (§ 32-31-3-14). The landlord also has
to enclose a check or money order for whatever's left of the deposit after
those deductions — the itemized list and the leftover money are supposed to
arrive together.

What can be deducted

The statute limits deductions to four categories: actual damage to the unit
beyond ordinary wear and tear; unpaid rent (including rent owed because the
tenant ended the lease early); the last month's rent, but only if a written
agreement says the deposit is meant to cover it; and unpaid utility or sewer
charges the tenant was contractually responsible for (§ 32-31-3-13). Ordinary
wear and tear is expressly carved out of the "actual damages" category — it's
not a deductible item.

Maximum deposit amount

There's no cap. Nothing in the chapter — including the section that defines
what a "security deposit" is — sets a dollar limit or a rent-multiple ceiling
on how much a landlord can collect.

Interest on the deposit?

No. The chapter has no interest requirement of any kind.

Penalty for a late/bad-faith withholding

There's no doubling or tripling of the deposit here; the real teeth are in
the forfeiture-and-liability structure. Missing the 45-day itemized-notice
deadline "constitutes agreement by the landlord that no damages are due, and
the landlord must remit to the tenant immediately the full security deposit"
(§ 32-31-3-15). On top of that automatic forfeiture, "[a] landlord who fails
to comply with sections 14 and 15 of this chapter is liable to the tenant in
an amount equal to the part of the deposit withheld by the landlord plus
reasonable attorney's fees and court costs" (§ 32-31-3-16). A separate
provision covering the initial 45-day notice duty itself lets a tenant
"recover all of the security deposit due the tenant and reasonable
attorney's fees" if the landlord fails to comply (§ 32-31-3-12(b)).

Separate account or bond required?

No. Indiana doesn't require a landlord to segregate a held deposit into its
own account or post a bond.

What trips people up

The 45-day clock doesn't start on move-out day by itself. Two more
things have to happen first: the rental agreement has to be terminated, and
you have to give the landlord your forwarding address in writing. If you
never send that address, the landlord's 45-day duty arguably hasn't been
triggered at all — so send it promptly and keep proof you did.

"Forfeiture" here means the landlord loses the right to make ANY
deduction, not just the disputed ones. Under § 32-31-3-15, missing the
deadline is treated as an admission that no damages exist at all — even
damage the landlord could otherwise have proven.

There's no dollar cap to check the deposit against. Unlike states that
limit deposits to one or two months' rent, Indiana law doesn't limit the
amount at all — a large deposit isn't, by itself, a statutory violation.

Common questions

When does my 45 days actually start? Once your lease has ended, you've
handed back possession, and you've given the landlord a written mailing
address — whichever of those happens last effectively starts the clock.

My landlord sent an itemized list but it's just one number, like "repairs:
$400" — is that legal? The statute requires "the estimated cost of repair
for each damaged item," which points toward itemizing item by item rather
than a single lump figure, though the statute itself doesn't spell out
exactly how granular each entry must be.

Can my landlord charge me for a pet stain in the carpet? Yes, if it's
actual damage beyond ordinary wear and tear — the statute allows deductions
for "actual damages to the rental unit... that are not the result of
ordinary wear and tear," which covers genuine damage like that.

Statutes and sources

• Ind. Code § 32-31-3-12 — 45-day return/notice deadline, gated on termination + possession + written forwarding address.
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-12(b) — tenant recovers full deposit plus attorney's fees for noncompliance.
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-13 — permitted uses of the deposit.
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-14 — itemized-list requirement and contents.
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-15 — missing the itemized notice forfeits any deduction.
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-16 — liability for withheld deposits (amount withheld plus fees and costs).
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)
• Ind. Code § 32-31-3-9 — statutory definition of "security deposit" (no cap language).
  https://iga.in.gov/ic/2025/Title_32/Article_31/Chapter_3.pdf (accessed 2026-07-06)