Delaware Security Deposit Law: Limits, Deadlines, and Penalties

For leases of one year or more, the deposit cannot exceed one month's rent. Month-to-month and other short tenancies have no cap during the first year, but once the tenancy has lasted a year the cap drops to one month's rent and the landlord must immediately credit back any excess. Furnished rental units are exempt from the cap entirely, and federally assisted housing follows its own rules.

Landlords may charge a separate pet deposit of up to one month's rent in addition to the security deposit, deductible only for pet-related damage; no pet deposit may be charged for a certified support animal of a disabled resident.

Within 20 days after the rental agreement ends or terminates, the landlord must return the deposit or the balance together with an itemized list of damages. The deposit is sent to the forwarding address the tenant provided in writing at or before termination, or to the address in the rental agreement if none was given.

The landlord must provide an itemized list of damages within 20 days; failing to do so constitutes an acknowledgment that no damages are owed, forfeiting the right to withhold anything. There is no statutory receipts threshold.

Failure to return the deposit or the balance within 20 days entitles the tenant to double the amount wrongfully withheld. Separately, failing to disclose the location of the deposit account within 20 days of a tenant's written request forfeits the entire deposit to the tenant.

Delaware does not require landlords to pay interest on security deposits. The escrow requirement governs where the money is held, not who earns the interest.

Each deposit must be held in a dedicated escrow account at a federally insured bank with an office that accepts deposits in Delaware, designated as a security deposit account and not used in the landlord's business operations. The landlord must disclose the account's location to the tenant on request.

The 20-day itemization rule is Delaware's biggest trap for small landlords: miss the deadline and you legally acknowledge no damages are due, even if the unit is genuinely damaged. The escrow account must be at a bank with a physical Delaware presence — an out-of-state landlord's home-bank account does not comply, and ignoring a tenant's written request for the account location forfeits the whole deposit. The furnished-unit exemption lets landlords of furnished rentals charge more than one month. Delaware counts the pet deposit separately from the security deposit, one of the few states that does.

• 25 Del. C. § 5514
• 25 Del. C. § 5514 (2025)