Indiana has no limit on the size of a security deposit, but it does set firm rules for getting it back: a 45 day deadline, an itemized list with repair estimates, and attorney fees for tenants when a landlord ignores the law. Across the Indianapolis, Carmel, and Greenwood metro area, about 279,600 of 842,800 occupied homes, or 33.2 percent, are rented, according to the U.S. Census Bureau’s 2020 to 2024 American Community Survey (Homzora Indianapolis dataset, Table B25003). The median gross rent is $1,191 a month (Homzora Indianapolis dataset, Table B25064), and the median renter household earns $49,775 a year (Homzora Indianapolis dataset, Table B25119), so the median rent equals about 29 percent of the median renter household’s gross income.
Homzora is a housing research publisher, not a law firm. This article explains the law in plain English and is not legal advice for your situation.
Quick answers
- Cap: Indiana’s deposit statute does not set a maximum (Ind. Code § 32-31-3-9).
- Deadline: no more than 45 days after the lease ends and you deliver possession (Ind. Code § 32-31-3-12).
- Itemization: a mailed list of damages with the estimated cost of each repair (Ind. Code § 32-31-3-14).
- Forwarding address: the landlord is not liable until you give a mailing address in writing (Ind. Code § 32-31-3-12).
- Penalty: the amount wrongfully withheld plus reasonable attorney fees and court costs (Ind. Code § 32-31-3-16).
How much a landlord can charge
The deposit chapter defines a security deposit without setting any maximum amount (Ind. Code § 32-31-3-9), and Indianapolis cannot set its own cap because Indiana preempts local regulation of security deposits (Ind. Code § 32-31-1-20). At the metro median gross rent of $1,191, a one month deposit would be $1,191, but nothing in state law prevents a landlord from asking for more. Compare deposits across listings before you apply.
What a deposit can cover
A landlord may apply the deposit to actual damages that are not the result of ordinary wear and tear, to unpaid rent including rent due because the tenant ended the lease early, to unpaid utility or sewer charges the tenant was responsible for under the lease, and to the last month’s rent only if a written agreement says so (Ind. Code § 32-31-3-13). Unless otherwise agreed, a tenant may not apply the deposit to rent (Ind. Code § 32-31-3-12).
The 45 day rule
The landlord must return the deposit, less lawful deductions, no more than 45 days after the rental agreement ends and the tenant delivers possession (Ind. Code § 32-31-3-12). Within 45 days after occupancy ends, the landlord must mail an itemized list of damages claimed, with the estimated cost of repair for each damaged item and the amounts the landlord intends to charge, along with a check or money order for the balance (Ind. Code § 32-31-3-14).
Give your forwarding address in writing
The landlord is not liable under the deposit chapter until the tenant supplies a mailing address in writing (Ind. Code § 32-31-3-12). Put your new address in a dated letter or email on move out day and keep a copy; it is the single most important step an Indianapolis renter can take.
If no list arrives
A landlord who fails to send the itemized notice of damages is treated as agreeing that no damages are due, and must immediately return the full deposit (Ind. Code § 32-31-3-15).
Penalties
A landlord who fails to comply with the itemization and return requirements is liable to the tenant for the part of the deposit wrongfully withheld, plus reasonable attorney fees and court costs (Ind. Code § 32-31-3-16). Indiana’s statute does not provide double or triple damages, so the attorney fee provision is what gives tenants leverage.
A worked example
Suppose you paid a $1,191 deposit, moved out on May 31, and handed your landlord a written forwarding address that day. By July 15, 45 days later, you have no list and no refund. Because no itemized notice was sent, the landlord is treated as agreeing that no damages are owed and must return the full deposit (Ind. Code § 32-31-3-15). If you sue, you can recover the amount withheld plus reasonable attorney fees and court costs (Ind. Code § 32-31-3-16).
A sample demand letter
Date: 2026. To: [landlord]. Re: Security deposit for [address]. My lease ended and I delivered possession on 2026, and I provided my forwarding address in writing on 2026. Under Indiana Code 32-31-3, you were required to mail an itemized list of damages with estimated repair costs, and any balance, within 45 days. [I have received neither.] [I dispute these deductions: (list).] Please send [amount] to [address] by 2026. Indiana Code 32-31-3-16 allows a tenant to recover the amount wrongfully withheld plus reasonable attorney fees and court costs. Sincerely, [name].
Why Indianapolis cannot add its own rules
Indiana law bars cities and other local units from regulating rental rates on private property, and from regulating tenant screening, security deposits, lease applications, lease terms, disclosures, the rights and obligations of the parties, or fees charged by a landlord, with an exception for housing that receives government funds to provide reduced rents (Ind. Code § 32-31-1-20). Local ordinances concerning retaliation by landlords are also void (Ind. Code § 32-31-8.5-6). For Indianapolis renters, that means state law is the rulebook.
Key terms
- Ordinary wear and tear: normal deterioration from everyday use, which cannot be charged to the deposit.
- Itemized list: the mailed list of damages with estimated repair costs (Ind. Code § 32-31-3-14).
- Delivery of possession: returning the unit and keys, which helps start the 45 day clock.
- Preemption: Indiana’s bar on local deposit and rent rules (Ind. Code § 32-31-1-20).
Build your evidence file
Landlord and tenant disputes are usually decided by documents. Keep these together from the day you sign:
- The signed lease, every addendum, and every renewal.
- Receipts or bank records for the deposit and each rent payment.
- Dated photos and video of every room at move in and move out.
- Copies of every repair request and the landlord’s replies.
- Every notice you send or receive, with proof of delivery.
Keep copies somewhere other than your phone, such as an email to yourself, so they survive a lost device.
Before you sign your next lease
- Ask who owns and who manages the property, and get contact details in writing.
- Read the clauses on early termination, subletting, renewal, late fees, and notice before you sign.
- Confirm the deposit amount, where it will be held, and how it will be returned.
- Walk through the unit, note existing damage in writing, and keep a signed copy.
- Ask how much notice the landlord gives before a rent increase or a non renewal.
Help in Indianapolis
Indiana Legal Services is a nonprofit law firm that provides free civil legal help to eligible low income residents in all 92 Indiana counties, including from its Indianapolis office (Indiana Legal Services). For rental assistance programs, call 211 or visit 211.org. Fair housing complaints can be filed with HUD (HUD, File a Complaint). Rent, income, and tenure figures for this guide are free to download from the Homzora Indianapolis data library.
Questions to ask at move in
- Where will my deposit be held, and will I receive that information in writing?
- Is there a move in condition checklist, and can I add items to it?
- What cleaning standard does the lease require at move out?
- How and where will the refund be sent?
- Who should I contact about the deposit if the building is sold?
Ask these before you pay. Answers in writing are far more useful than a conversation in the leasing office.
Mistakes to avoid
- Skipping move in photos. Photos are usually the deciding evidence on what damage existed before you.
- Leaving without a final walkthrough. Attend any inspection offered, or ask for one.
- Not giving a forwarding address in writing. It is the simplest way to make sure the refund reaches you.
- Letting deadlines pass. Send a written demand promptly once the refund deadline has passed.
Frequently asked questions
How long does my Indianapolis landlord have to return my deposit?
No more than 45 days after the lease ends and you deliver possession (Ind. Code § 32-31-3-12).
Can I use my deposit as my last month of rent?
Not unless you and your landlord agree; a written agreement is needed for the landlord to apply it to the last payment (Ind. Code § 32-31-3-12; Ind. Code § 32-31-3-13).
Does my landlord owe interest on my deposit?
The Indiana deposit sections cited in this guide do not require interest (Ind. Code § 32-31-3-12; Ind. Code § 32-31-3-14; Ind. Code § 32-31-3-16).
What if I never gave a forwarding address?
The landlord is not liable under the deposit chapter until you give a mailing address in writing (Ind. Code § 32-31-3-12). Send it now.
Sources
- Homzora Indianapolis dataset, Table B25003
- Homzora Indianapolis dataset, Table B25064
- Homzora Indianapolis dataset, Table B25119
- Ind. Code § 32-31-3-9
- Ind. Code § 32-31-3-12
- Ind. Code § 32-31-3-14
- Ind. Code § 32-31-3-16
- Ind. Code § 32-31-1-20
- Ind. Code § 32-31-3-13
- Ind. Code § 32-31-3-15
- Ind. Code § 32-31-8.5-6
- Indiana Legal Services
- 211.org
- HUD, File a Complaint
- Homzora Indianapolis data library