§ 13-159. Security deposits; amounts; escrow accounts; interest.

(a)

A security deposit is any advance or deposit of money given to the landlord by the tenant for the purpose of securing the performance of the rental agreement or any part thereof.

(b)

A landlord shall not impose a security deposit in excess of the equivalent of two (2) months' rent or Fifty Dollars ($50.00), whichever is greater, per dwelling unit, regardless of the number of tenants.

(1)

If the landlord charges more than the equivalent of two (2) months' rent or Fifty Dollars ($50.00), whichever is greater, per dwelling unit, as a security deposit, the tenant shall have the right to recover up to threefold the extra amount so charged, plus reasonable attorney's fees.

(2)

An action under this Section may be brought at any time during the tenancy, or within two (2) years after the lease is terminated.

(c)

The landlord shall maintain the security deposit in an interest bearing and insured escrow account in a bank or savings and loan association located within the State of Maryland, and administer it for the benefit of the tenant. This money shall not be commingled with any asset of the landlord and shall be identified in some manner as security deposit escrow money. Failure to provide such information shall be cause for denial, suspension, or revocation of the license to operate a multifamily rental facility as required by Section 13-184.

(1)

The landlord shall give a tenant a receipt for a security deposit. The receipt shall be included as a provision in the lease.

(2)

The landlord shall be liable to the tenant in the sum of Fifty Dollars ($50.00) if the landlord fails to provide a written receipt for a security deposit.

(d)

The landlord shall deposit the security deposit money within thirty (30) days after its receipt. The tenant shall be entitled to interest earned on the deposit as provided under § 8-203 of the Real Property Article.

(e)

In the event of sale or transfer of any sort, including, but not limited to, receivership or bankruptcy, the security deposit shall be binding on the successor in interest to the person to whom the deposit is given. Security deposits shall be free from any attachment by creditors.

(f)

Any successor in interest shall be liable to the tenant for failure to return the security deposit together with interest, as provided by this Section.

(g)

The landlord shall return the security deposit and interest per annum, as determined pursuant to § 8-203 of the Real Property Article, less any damages rightfully withheld, within forty-five (45) days after the lease is terminated.

(1)

Interest shall accrue at six (6) month intervals from the day the landlord deposits the security deposit. Interest shall not compound.

(2)

Interest shall be payable only on security deposits of Fifty Dollars ($50.00) or more.

(3)

If the landlord fails, without a reasonable basis as specified in Subsection (h), to return all or any part of the security deposit and that portion of the accrued interest within forty-five (45) days after the lease is terminated, the tenant shall have the right to recover up to threefold the amount so withheld plus reasonable attorney's fees.

(h)

The tenant has the right to be present when the landlord or his agent inspects the leased dwelling unit in order to determine if any damage was done to the leased dwelling unit, if the tenant notifies the landlord by certified mail of his intention to move, the date of moving, and his new address. The notice to be furnished by the tenant to the landlord shall be mailed at least fifteen (15) days prior to the date of moving. Upon receipt of the notice, the landlord shall notify the tenant by certified mail of the time and date when the leased dwelling unit is to be inspected. The date of inspection shall occur within five (5) days before or five (5) days after the date of moving as designated in the tenant's notice. The tenant shall be advised of his rights under this Subsection in writing at the time of his payment of the security deposit. Failure by the landlord to comply with this requirement forfeits the right of the landlord to withhold any part of the security deposit for damages.

(1)

The security deposit may not be forfeited to the landlord for breach of the rental agreement, except in the amount that the landlord is actually damaged by the breach.

(2)

In calculating damages for lost future rents, any amounts of rents received by the landlord for the leased dwelling unit during the remainder of any of the tenant's term shall reduce the damages by a like amount.

(A)

A detailed statement of any damages or violations of the lease together with the cost actually incurred shall be mailed by first class mail directed to the last known address of the tenant within forty-five (45) days after the lease is terminated. The security deposit, or any portion thereof, may be withheld for unpaid rent, damage due to breach of lease, or for damage to the leased dwelling unit by the tenant, his family, agents, employees, or social guests in excess of ordinary wear and tear.

(B)

The failure of the landlord to inspect the leased dwelling unit or to mail a notice in accordance with paragraph (A), above, shall cause the landlord to forfeit any right to withhold any part of the security deposit for damages.

(CB-152-1972; CB-122-1977; CB-137-1981; CB-60-1986; CB-79-1992; CB-63-2014)