Most residential landlords require tenants to pay a security deposit to cover any repairs needed when the tenant moves out, or to cover the tenant’s failure to pay the last month's rent.

Laws vary from state to state, but many states have statutes that provide the maximum amount of security deposit a landlord may require for a residential lease and the costs for which the landlord may use the security deposit (cleaning, repairs, unpaid rent) following termination of the lease.

These laws also provide a specific deadline (often 30-60 days) for the landlord to return the tenant’s security deposit following termination of the lease—after deducting any amount properly withheld, as allowed by law.

In Indiana, landlords can require tenants to pay a security deposit, which is typically used to cover repairs for damage beyond normal wear and tear, cleaning, or unpaid rent after the tenant moves out. Indiana does not have a state statute that limits the maximum amount a landlord can charge for a security deposit. However, Indiana law does require landlords to return the security deposit to the tenant within 45 days after the tenant has surrendered the rental property. The landlord must provide an itemized list of damages and the estimated or actual cost for repairing or replacing each damaged item if deductions are made from the security deposit. If the landlord fails to return the security deposit within the 45-day period, the tenant may sue for the return of the deposit. If a court finds the landlord acted in bad faith, the tenant may be entitled to receive up to twice the amount of the security deposit as a penalty.