Vermont: Security Deposit Return Deadlines & Deductions

Requirements one by one

Governing law

Vermont's deposit rules sit in one section of its Residential Rental
Agreements chapter, 9 V.S.A. § 4461 ("Security deposits"), with several key
terms — including "normal wear and tear" — defined a few sections earlier
in § 4451.

Deadline to return the deposit

The landlord "shall return the security deposit along with a written
statement itemizing any deductions... within 14 days from the date on
which the landlord discovers that the tenant vacated or abandoned the
dwelling unit or the date the tenant vacated the dwelling unit, provided
the landlord received notice from the tenant of that date." A carve-out
applies to short-term vacation rentals: "In the case of the seasonal
occupancy and rental of a dwelling unit not intended as a primary
residence, the security deposit and written statement shall be returned
within 60 days."

Itemized statement required?

Yes, in every case — the itemized statement isn't optional or triggered
only by a partial withholding. It must accompany the deposit (or its
balance) within the same 14-day or 60-day window, "hand-delivering or
mailing" it "to the last known address of the tenant."

What can be deducted

Four categories: "nonpayment of rent"; "damage to property of the
landlord, unless the damage is the result of normal wear and tear or the
result of actions or events beyond the control of the tenant";
"nonpayment of utility or other charges that the tenant was required to
pay directly to the landlord or to a utility"; and "expenses required to
remove from the rental unit articles abandoned by the tenant." "Normal
wear and tear" itself is defined as "the deterioration that occurs, based
upon the reasonable use for which the rental unit is intended, without
negligence, carelessness, accident, or abuse."

Maximum deposit amount

None under state law. Vermont's statute sets no dollar figure or
rent-multiple limit on how much a landlord can collect as a deposit.
(Some cities, like Burlington, cap deposits by their own ordinance — a
local add-on this survey doesn't track.)

Interest on the deposit?

No state-level requirement. Vermont's statute only says that a town or
municipality "may authorize the payment of interest on a security
deposit" by its own ordinance — the state itself imposes no interest
duty.

Penalty for a late/bad-faith withholding

Missing the deadline is an automatic, no-fault forfeiture: "If a landlord
fails to return the security deposit with a statement within 14 days, the
landlord forfeits the right to withhold any portion of the security
deposit." On top of that, "[i]f the failure is willful, the landlord
shall be liable for double the amount wrongfully withheld, plus
reasonable attorney's fees and costs" — a second, stacked penalty layered
on the bare forfeiture, not an alternative to it.

Separate account or bond required?

No. Vermont's statute imposes no escrow, segregation, or bonding
requirement at the state level. A municipal ordinance can regulate deposit
interest, but the statute is explicit that such an ordinance "may not
limit how a security deposit is held," leaving that question to state law
— which doesn't require any particular holding arrangement.

What trips people up

The forfeiture is automatic, with no bad-faith requirement. Unlike
states that only penalize a willful or bad-faith violation, Vermont
forfeits the ENTIRE deposit-withholding right the moment the 14-day
deadline passes, for any reason. Willfulness only matters for the
additional double-damages layer.

Your own notice can shorten (or extend) the clock. The vacate-date
trigger only starts the 14 days if you told your landlord when you were
leaving; without that notice, the clock instead runs from whenever the
landlord happens to discover you're gone — which could be later, or
sooner, than your actual move-out date.

A building sale doesn't erase your deposit. If your landlord sells the
property, the deposit must transfer to the new landlord, who then has to
give you actual notice of the transfer, their name, and their address.

No state cap doesn't mean no cap at all. Several Vermont cities layer
their own deposit caps and rules on top of state law — check local
ordinances separately, since this page covers only the state floor.

Common questions

How long does my Vermont landlord have to return my deposit? 14 days
from when the landlord learns you've vacated (or from your actual move-out
date, if you gave notice of it) — 60 days if it's a seasonal, non-primary
rental.

Is there a cap on my deposit in Vermont? Not under state law. Check
whether your city or town has its own local cap.

What can I recover if my landlord misses the deadline? The landlord
automatically loses the right to withhold anything from your deposit. If
the landlord's failure was willful, you can also recover double the
amount wrongfully withheld, plus attorney's fees and costs.

Statutes and sources

• 9 V.S.A. § 4461(a)-(b) — what a deposit is and the permitted deduction categories.
  https://law.justia.com/codes/vermont/title-9/chapter-137/section-4461/ (accessed 2026-07-06)
• 9 V.S.A. § 4461(c)-(d) — the 14-day/60-day return-and-itemization deadline.
  https://law.justia.com/codes/vermont/title-9/chapter-137/section-4461/ (accessed 2026-07-06)
• 9 V.S.A. § 4461(e) — the automatic forfeiture and willful double-damages penalty.
  https://law.justia.com/codes/vermont/title-9/chapter-137/section-4461/ (accessed 2026-07-06)
• 9 V.S.A. § 4461(f)-(g) — the successor-landlord transfer duty and the local-ordinance option.
  https://law.justia.com/codes/vermont/title-9/chapter-137/section-4461/ (accessed 2026-07-06)
• 9 V.S.A. § 4451(5) — the statutory definition of "normal wear and tear."
  https://law.justia.com/codes/vermont/title-9/chapter-137/section-4451/ (accessed 2026-07-06)