Iowa Security Deposit Law: Limits, Deadlines, and Penalties
What Iowa landlords can charge, when deposits must be returned, and what it costs to get it wrong. Last reviewed 2026-08-12.
How much can a landlord charge in Iowa?
Iowa Code § 562A.12(1) bars landlords from demanding or receiving a security deposit exceeding two months' rent. The cap applies to the total of all deposits, however labeled.
No separate pet deposit statute — a refundable pet deposit is lawful but counts toward the two months' rent cap.
When must the deposit be returned?
The 30-day clock starts when the tenancy terminates and the landlord receives the tenant's mailing address or delivery instructions. Within it, the landlord must return the deposit or furnish a written statement of the specific reasons for withholding. If the tenant provides no address within one year, the deposit reverts to the landlord.
Any withholding requires a written statement showing the specific reason; if money is kept for restoring the unit, the statement must specify the nature of the damages. In court, the landlord bears the burden of proving the reason for withholding.
What happens if a landlord misses the deadline?
A landlord who fails to provide the written statement within 30 days forfeits all rights to withhold any portion of the deposit. Bad-faith retention subjects the landlord to punitive damages of up to twice the monthly rent on top of actual damages, and the court may award attorney fees to the prevailing party.
Interest and holding requirements
Interest earned on a deposit during the first five years of a tenancy belongs to the landlord by statute; only interest accruing after five years in the same tenancy belongs to the tenant, so most tenants receive none.
Deposits must be held in a federally insured bank, savings and loan, or credit union and must not be commingled with the landlord's personal funds; a common trust account holding multiple tenants' deposits is permitted and may be interest-bearing.
What Iowa landlords get wrong
Iowa puts the burden of proof squarely on the landlord: in any deposit lawsuit you must prove each withholding by a preponderance of the evidence, so photos and receipts are essential. Permissible deductions are narrow — unpaid rent and other sums due, restoration beyond ordinary wear and tear, and the costs of recovering possession from a bad-faith holdover. The 30-day clock waits for the tenant's mailing address, but don't sit on a known address; and if the tenant never supplies one, the deposit is yours after one year.
The law itself
Frequently asked questions
How long does a landlord have to return a security deposit in Iowa?
Thirty days from the later of two events: the tenancy terminating and the landlord receiving your mailing address or delivery instructions. Within that window the landlord must return the deposit or send a written statement giving the specific reason for each amount withheld. Provide your forwarding address in writing at move-out and keep proof — without it, the clock never starts, and after one year the deposit reverts to the landlord.
How much can an Iowa landlord charge for a security deposit?
No more than two months' rent, counting all deposits combined — security, pet, key, or otherwise labeled. Iowa also requires the money to be held in a federally insured institution, separate from the landlord's personal funds. There is no city-level variation; the two-month cap applies statewide to tenancies under Iowa's Uniform Residential Landlord and Tenant Law.
What is the penalty for bad-faith retention of a deposit in Iowa?
Punitive damages of up to twice the monthly rent, on top of your actual damages. Separately, any landlord who simply fails to send the written itemized statement within 30 days — bad faith or not — forfeits the right to withhold anything and owes the full deposit. Courts may also award reasonable attorney fees to the prevailing party in an action on the rental agreement.
Does an Iowa landlord owe me interest on my security deposit?
Almost never. By statute, any interest earned on the deposit during the first five years of your tenancy is the landlord's property. Only if the same tenancy continues past five years does later-accruing interest belong to you. The deposit may sit in a non-interest-bearing trust account anyway, in which case there is no interest to distribute at all — that is legal in Iowa.
Keep reading
Deposit deadlines are easy to miss — until they cost you triple.
Vantric tracks your leases, deposits, and move-out dates in one place, built for landlords with 1–10 units.
Start Free TrialThis page is general information, not legal advice. Statutes change — verify against the official text linked above or consult a local attorney before acting.