Overview
Pennsylvania security deposit laws are governed by the Landlord and Tenant Act (68 P.S. § 250.511-512). Pennsylvania has unique rules that change based on how long the tenant has lived in the property—deposits are limited to two months' rent in the first year, then one month thereafter. Interest is required after two years of tenancy. Using security deposit management software helps track these changing requirements over time.
Maximum Security Deposit
Pennsylvania's deposit limits change based on tenancy length (68 P.S. § 250.511a):
First Year of Tenancy
Maximum deposit: Two months' rent
Second Year and Beyond
Maximum deposit: One month's rent
At the beginning of the second year, landlords must return any amount exceeding one month's rent to the tenant.
After Five Years
Landlords are prohibited from increasing the security deposit, even if rent increases.
Return Timeline
Landlords must return the security deposit within 30 days after the lease terminates and the tenant provides a forwarding address (68 P.S. § 250.512).
The return must include: (New Jersey has stricter rules—see New Jersey security deposit laws.)
- The remaining deposit balance
- A written itemized list of any deductions
Interest Requirements
Interest requirements depend on how long the deposit has been held:
Deposits Held Over 2 Years
If the deposit exceeds $100 and is held for more than two years, it must be placed in an interest-bearing escrow account at a federally or state-regulated institution.
- Landlords must pay interest to tenants annually
- Landlords may retain 1% annually as an administrative fee
Deposits Held Less Than 2 Years
No interest requirement applies.
Notification Requirement
Within 30 days of placing the deposit in escrow, landlords must notify tenants in writing of the bank name, address, and account details.
Allowable Deductions
Under 68 P.S. § 250.511a, landlords may deduct for:
- Unpaid rent
- Breach of lease expenses
- Property damage beyond normal wear and tear
Landlords cannot deduct for ordinary wear and tear, such as worn carpet, faded paint, or small nail holes from normal picture hanging.
Penalties for Non-Compliance
Pennsylvania imposes significant penalties under 68 P.S. § 250.512:
- Double damages: Failure to return the deposit within 30 days may make landlords liable for twice the amount wrongfully withheld
- Forfeiture: Failure to provide an itemized list of deductions within the deadline forfeits all rights to withhold any portion of the deposit
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. See how Passive works to streamline documentation and compliance.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.