Complete 2026 guide to DC security deposit laws for landlords. Learn deposit limits, escrow requirements, interest rules, return deadlines, and legal deductions.
DC landlords can collect a maximum security deposit equal to one month's rent. This applies regardless of the tenant's credit history or the number of occupants. Collecting more than one month's rent as a deposit is illegal.
Security deposits must be held in an interest-bearing escrow account at a federally or DC-insured financial institution. The account must be separate from the landlord's personal or operating funds.
Yes. DC pegs deposit interest to the statement savings rate of the bank actually holding the deposit, checked each January 1 and July 1 (14 DCMR 311) — no rate is set by the Mayor and there is no single citywide number. Interest is paid at the end of the tenancy, or annually where the lease provides for it, with a written statement of the interest earned.
Landlords must return the security deposit, or serve written notice of intent to withhold, within 45 days after the tenant vacates; an itemized statement of deductions follows. Withholding in bad faith — a frivolous or unfounded refusal driven by a fraudulent or self-serving motive, not an honest mistake — exposes you to treble damages of up to 3x the amount withheld (§ 42-3502.17).
Landlords can deduct for: unpaid rent, damage beyond normal wear and tear, cleaning costs to return the unit to move-in condition, and other lease violations. You cannot deduct for normal wear and tear or pre-existing damage.
Tenants can sue in Small Claims Court for the amount wrongfully withheld — and where the withholding was in bad faith, up to 3 times that amount plus attorney's fees (§ 42-3502.17). Courts take deposit violations seriously.
See what your DC rental license requires — free 60-second check · Done-for-you DC rental licensing
Questions? Call (202) 883-8275, Mon–Fri 9–6 ET · support@rentreadydc.com