What are the security deposit rules in Delaware?

Verified July 11, 2026 All Delaware topics →

Pending legislation — not yet law. The rules on this page reflect current law only. The following bills would change it if enacted:

SB 292 (153rd GA, 2026) — 'Grace Peterson Act' — Amends the Residential Landlord-Tenant Code to (1) close the 25 Del. C. § 5102 exclusion loophole that let unlicensed or uncertified residential operators claim exemption from the Code, including eviction procedure, and (2) add § 5512A duties when a tenant's rent is paid from a state reentry-services fund (landlord must assist with a discharge plan and notify the fund administrator and agencies before terminating; noncompliance brings one-year debarment from state funds; affected tenants may stay on without fund payments or terminate on 30-60 days' notice). Takes effect 6 months after enactment.Status: Passed both chambers 2026-06-24; awaiting the Governor's action as of 2026-07-11 (post-adjournment window under Del. Const. art. III, § 18 runs roughly to the end of July 2026). Not law at this verification. If enacted it changes Code-applicability notes (§ 5102), not the four topic numbers. (checked 2026-07-11).
SB 235 (153rd GA, 2026) — Manufactured-home communities only (25 Del. C. ch. 70): repeals the sunset on the Rent Justification Act pilot calculations, making the § 7052A/§ 7052B CPI-linked justified-rent-increase calculations permanently replace the § 7052 grounds for lot-rent increases. Does not touch apartment/site-built rentals under chs. 51-59.Status: Passed both chambers 2026-06-30; awaiting the Governor's action as of 2026-07-11. Out of v1 scope (lot tenancies) but flagged because rent-increase notes reference ch. 70. (checked 2026-07-11).

Delaware caps security deposits at one month's rent only for leases of a year or more — and for month-to-month tenancies once they pass the one-year mark — while shorter fixed-term leases, the first year of a month-to-month tenancy, and furnished units have no cap at all.

The landlord has 20 days from the end of the tenancy to return the deposit or send an itemized damage list with estimated repair costs and pay the difference; missing that deadline is a legal admission that no damages are owed and exposes the landlord to double the amount wrongfully withheld. The deposit must be held in a designated escrow account at a federally insured bank with a Delaware office, and hiding the account's location after a written request — or skipping the escrow account — forfeits the whole deposit. Tenants must give a forwarding address in writing by move-out to preserve the double-damages remedy, and then have 10 days to object in writing to any deductions. Pet deposits are allowed but separately capped at one month's rent (never for certified support animals), nonrefundable move-in fees are banned, application fees are capped at the greater of 10% of a month's rent or $50, and since June 24, 2026 a lease that conditions deposit return on handing back the keys must spell out a clear key-surrender procedure.

Delaware security deposits at a glance

Maximum deposit	1 month's rent — The 1-month cap applies only (1) where the rental agreement is for 1 year or more (25 Del. C. § 5514(a)(2)), and (2) to month-to-month or undefined-term primary residential tenancies once the tenancy has lasted 1 year — at the 1-year mark the landlord must immediately credit back any amount (including any surety bond) over 1 month's rent (§ 5514(a)(3), federally-assisted housing excepted). A fixed term shorter than 1 year has no statutory cap for that term, a month-to-month tenancy has no cap during its first year, and furnished rental units are exempt from the deposit limits entirely (§ 5514(a)(4)). A pet deposit is separate from the security deposit (§ 5141(33)) and is capped on its own at 1 month's rent regardless of lease length (§ 5514(i)(2)).
Return deadline	20 days
Deadline conditions	20 days from the expiration or termination of the rental agreement, both for remitting the deposit (§ 5514(e)) and for providing the itemized damage list with estimated repair costs and tendering the difference (§ 5514(f)). Communications go to the tenant's address in the rental agreement or to a forwarding address the tenant provided in writing at or before termination (§ 5514(h)). The tenant then has 10 days from receipt of a tendered payment to object in writing; silence is agreement to the landlord's damage figures. Since June 24, 2026, a lease that conditions deposit return on surrender of keys must give a clear surrender procedure and may not require surrender before the end of the term (85 Del. Laws c. 295).
Itemization required	Yes
Itemization rules	Within 20 days after termination or expiration the landlord must provide an itemized list of damages and the estimated cost of repair for each item, and must tender payment of the difference between the deposit and those costs (§ 5514(f)). Failure to provide the list within 20 days is a statutory acknowledgment that no payment for damages is due. Deposits may be applied only to actual damage beyond normal wear and tear (defined at § 5141(23)), rental arrears including late charges and rent due for premature termination or abandonment, and reasonable renovation/re-renting expenses caused by premature termination (capped at 1 month's rent when termination was the tenant's statutory § 5314 early-termination right) (§ 5514(c)).
Separate account required	Yes
Interest owed to tenant	No
Account & interest rules	No interest on security deposits is required anywhere in the Landlord-Tenant Code (verified negative — full sweep of § 5514 and the chapter 53 and 55 section lists). The escrow rule is strict in other respects: the deposit must sit in a federally-insured banking institution with a Delaware office that accepts deposits, in an account designated as a security-deposits account, not used in the landlord's business, with the location disclosed to the tenant, and the tenant's claim to the money primes any creditor of the landlord, including a bankruptcy trustee, even if the money was commingled (§ 5514(b)).
Pet deposits	Pet deposits are expressly authorized and separately capped at 1 month's rent regardless of the duration of the rental agreement (§ 5514(i)(2)). Animal damage must be deducted from the pet deposit first, then from the security deposit if insufficient. Pet deposits carry the same escrow, 20-day return, itemization, penalty, and forwarding-address rules as security deposits (§ 5514(i)(1)). No pet deposit may be required for a duly certified and trained support animal of a disabled resident (§ 5514(i)(3)). Because § 5141(33) excludes pet deposits from the 'security deposit' definition, a 1-year lease with a pet can lawfully carry up to 2 months' total deposits.
Non-refundable fees allowed	No
Penalty for violation	Double the amount wrongfully withheld, for missing the 20-day remittance/itemization deadline (§ 5514(g)(1)). Separate account penalties: failing to disclose the account location within 20 days of a tenant's written request, or failing to keep the deposit in a qualifying federally-insured in-state account, forfeits the entire deposit to the tenant — and failing to return the forfeited deposit within 20 days doubles it (§ 5514(g)(2)). Demanding more than the allowed application fee entitles the tenant to double the amount charged (§ 5514(d)).
Tenant forwarding-address duty	Yes — the tenant must provide a forwarding address in writing at or before termination of the rental agreement (§ 5514(h)). Failure relieves the landlord of the notice duty and of double-damages liability, but the landlord remains liable for the unused portion of the deposit if the tenant makes a written claim within 1 year of termination or expiration.

Notes and caveats

CAP TRAP (the big one): most charts say 'DE caps deposits at 1 month' flat — wrong. § 5514(a)(2) caps only agreements of 1 year or more; § 5514(a)(3) caps undefined-term/month-to-month tenancies only AFTER the tenancy has lasted 1 year (excess, counting any surety bond, must then be immediately credited back); a 6-month lease or the first year of a m2m tenancy is UNCAPPED, and furnished units are exempt from the limits entirely ((a)(4)). Render all four branches. Pet deposit is excluded from the 'security deposit' definition (§ 5141(33)) and carries its own 1-month cap regardless of term ((i)(2)), so 1-yr lease + pet = up to 2 months total. nonrefundable_fees_allowed=false rests on § 5311 (no nonrefundable fee as a condition of occupancy, except optional service fees for actual services like pool/tennis) plus § 5310 (assurance money prohibited); the lawful move-in charges are rent, deposit, pet deposit, capped application fee, unit-reservation deposit, and optional § 5514A surety-bond premium. Deposit increases: only if the rental agreement so provides, commensurate with rent; an increase exceeding 10% of monthly rent must be prorated over the term — over 4 months for m2m (§ 5514(j)). NEW LAW: 85 Del. Laws c. 295 (HB 217, signed and effective 2026-06-24) adds key-surrender rules (clear lease procedure required if deposit return is conditioned on keys; no pre-end-of-term surrender; weekend/holiday and multi-tenant possession-return timing; default self-help return with written notice). CITE CAVEAT: the enrolled act numbers the new section § 5123, which collides with the existing § 5123 'Tenant employee' on delcode — delcode had not absorbed c. 295 as of 2026-07-11 and the Code Revisors will likely renumber; cite the session law/BillDetail until codified. DEAD BILL: SB 186 (deposit-communication evidence + electronic delivery) died in Senate committee at the 2026-06-30 sine die — § 5514(h) paper mechanics still govern. All load-bearing figures double-read (delcode HTML + official Title 25 PDF, verbatim match).

Statute citations

25 Del. C. § 5514 (a)-(j) Official source
25 Del. C. § 5514A Official source
25 Del. C. § 5141 (23), (27), (33) Official source
25 Del. C. § 5311 Official source
25 Del. C. § 5310 (a) Official source
85 Del. Laws c. 295 (HB 217 w/ HA 1, 153rd GA, signed 2026-06-24 — surrender of rental unit keys) Official source

How this record was verified: Direct read of statute text on the official Delaware Code site (delcode.delaware.gov), each load-bearing section read twice through independent official paths: the delcode HTML chapter pages (25 Del. C. ch. 51 subchapters I-II, ch. 53, ch. 55) and the official Title 25 PDF served from the same host, with every load-bearing figure matching verbatim (1-month deposit cap and its 1-year-lease / month-to-month-after-1-year scope; 20-day return and itemized-list deadline with 10-day tenant objection window; double damages and account-forfeiture penalties; 1-month pet deposit cap; application-fee cap at the greater of 10% or $50; 5% late-charge cap with the 5-day no-imposition window and 3-day extension for no in-county payment office; 48-hour entry notice and the 8:00 a.m.-9:00 p.m. window; 60-day renewal-with-modifications notice with the 45-day tenant rejection right; 60-day month-to-month termination notice with the first-of-following-month start). Sections read in full: 5101, 5102, 5106, 5107, 5108, 5116, 5123, 5124, 5141, 5310, 5311, 5501, 5502, 5509, 5510, 5514, 5514A, 5515, plus complete section listings of ch. 51 subch. I, ch. 53, and ch. 55 as sweep basis for verified negatives (no deposit-interest requirement, no other late-fee or entry provision, no rent-increase tiers or frequency limits, no rent-control preemption statute in Title 25). The Delaware Attorney General's official Summary of the Residential Landlord-Tenant Code corroborates the 60-day rent-increase-notice reading of section 5107 for month-to-month tenancies. 2025-2026 session sweep: the complete 153rd General Assembly docket (all 1,961 pieces of legislation) was retrieved from the official legis.delaware.gov AllLegislation API and title-filtered; one on-topic enactment incorporated (HB 217, 85 Del. Laws c. 295, key-surrender rules, signed 2026-06-24), two passed bills awaiting the Governor flagged (SB 235, SB 292), and three on-topic bills confirmed dead at the 2026-06-30 sine die adjournment (SB 186 deposit e-communications, HB 229 summary-possession service window, HB 467 renters insurance). HB 455 (152nd GA statewide rent cap) confirmed dead in committee in 2024. Wilmington's 2025 rent-stabilization ordinance confirmed failed 6-5 in City Council on 2025-06-05.