Indianapolis, IN Security Deposit Laws 2026
Indiana limits security deposits to 2 month(s) of rent. In Indianapolis, that's $2,946 at the median 2BR rent of $1,473/month. Miss the 45-day return deadline and you could owe $2,946+.
In Indiana, landlords must return security deposits within 45 days after move-out. The maximum deposit is 2 month(s) of rent. Failure to return on time or provide an itemized statement can result in penalties of $2,946 or more.
Key Takeaways — Indianapolis Security Deposit Laws
- Maximum deposit: 2 month(s) of rent = $2,946 at Indianapolis's median rent
- Return deadline: 45 days after tenant moves out
- Penalty for late return: Up to 2x the deposit ($2,946)
- Itemized statement: Required with any deductions
Security Deposit Laws in Indianapolis
Under Indiana law, landlords in Indianapolis may collect a maximum security deposit of 2 month(s) of rent. At Indianapolis's median 2-bedroom rent of $1,473/month, that means the most you can legally collect is $2,946.
$2,946
max deposit (2mo × $1,473)
45 days
return deadline
$2,946
max penalty for late return
Returning the Deposit: The 45-Day Clock
Once a tenant moves out of your Indianapolis rental, Indiana law gives you exactly 45 days to either return the full deposit or provide an itemized statement of deductions. The clock starts on the day the tenant surrenders possession — not when you inspect the unit.
What you can deduct from a security deposit in Indianapolis:
- Unpaid rent
- Damage beyond normal wear and tear
- Cleaning costs to restore the unit to move-in condition
- Costs for restoring or replacing personal property (if lease allows)
What you cannot deduct:
- Normal wear and tear (minor scuffs, carpet wear, faded paint)
- Pre-existing damage (document with photos at move-in)
- Professional cleaning if the tenant left the unit in reasonable condition
Penalty Warning
Violate Indiana security deposit laws rules in Indianapolis and you could owe $2,946+. At Indianapolis's median rent of $1,473/month, even a single violation adds up fast.
Don’t risk it. Let LeaseBase handle the compliance.
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How Indianapolis Rents Affect Deposit Amounts
Deposit amounts scale with local rents. Here's what Indianapolis landlords typically collect:
| Unit Size | Median Rent (Indianapolis) | Max Deposit (2mo) | Penalty Risk |
|---|---|---|---|
| Studio | $1,118/mo | $2,236 | $4,472 |
| 1-Bedroom | $1,267/mo | $2,534 | $5,068 |
| 2-Bedroom | $1,473/mo | $2,946 | $5,892 |
| 3-Bedroom | $1,907/mo | $3,814 | $7,628 |
Rents based on HUD Fair Market Rents (FY2026) for Marion County.
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More Indianapolis Landlord Laws
Security Deposit Laws in Nearby Cities
Own properties in multiple cities? Rules may differ locally:
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Download Free ChecklistReviewed by Rachid Abadli
Founder & CEO, LeaseBase · Sacramento landlord · Self-managing since 2019
LeaseBase is a property management platform — not a law firm. Consult an attorney for legal advice specific to your situation.
