Overview
Tennessee security deposit laws are governed by the Uniform Residential Landlord and Tenant Act (URLTA), TN Code § 66-28-301. Tennessee's laws vary based on county population—larger counties (75,000+ population) follow URLTA, while smaller counties follow the Tennessee state code (Title 66). Recent 2024 legislation has expanded disclosure requirements for landlords. A security deposit compliance platform helps navigate these varying regulations.
Maximum Security Deposit
Tennessee has no statutory limit on security deposit amounts. Landlords may charge any amount they deem reasonable.
In practice, most Tennessee landlords charge one to two months' rent as a security deposit. Market competition typically keeps deposits reasonable.
Return Timeline
Under TN Code § 66-28-301(g1), landlords must return the security deposit within:
- 30 days after termination of the tenancy, OR
- 7 days after a new tenant takes possession of the premises (whichever is sooner)
Unclaimed Deposits
If the tenant does not respond to the deposit return within 60 days, the landlord can withdraw and keep the unclaimed portion of the security deposit.
Interest Requirements
Tennessee does not require landlords to pay interest on security deposits. There is no state statute requiring interest payments.
Storage Requirements
Under TN Code § 66-28-301(a), Tennessee landlords must:
- Keep security deposits in a separate bank account or other lending institution
- The account must be used exclusively for security deposits
- Deposits must not be commingled with the landlord's personal funds
- Inform the tenant of the institution's name and location
- The account number is not required to be disclosed
Move-Out Inspection Requirements
Tennessee requires landlords to provide tenants with notice of their right to attend the final inspection: (Kentucky follows similar guidelines—see Kentucky security deposit laws.)
- Written notice must be sent no later than 5 days after the tenant's intent to vacate
- Inspection must be scheduled during normal business hours
- If the landlord fails to conduct a move-out inspection or provide an itemized list, they may forfeit the right to withhold any portion of the deposit
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Cleaning costs to return the unit to move-in condition
- Other lease violations
Normal wear and tear cannot be charged to the tenant.
2024 Legislative Updates (HB 1814)
A bill passed in April 2024 expands disclosure requirements. Landlords must now disclose in writing before a lease begins:
- Name and phone number of the agent authorized to manage the property
- 24-hour emergency phone number (if different)
- Office and maintenance email addresses
- Address of the owner or authorized representative
If not provided upon request within 10 days, tenants may take the matter to court. All information must be kept current.
Penalties for Non-Compliance
Unlike most states, Tennessee law does not provide a specific statutory penalty for security deposit violations. However:
- Tenants may file suit to recover wrongfully withheld deposits
- Courts may award punitive damages in some cases
- Attorney's fees and court costs may be recoverable
- Failure to conduct move-out inspection may result in forfeiture of withholding rights
Which Law Applies?
Tennessee's landlord-tenant laws vary by county:
- Counties with 75,000+ population: Governed by the Uniform Residential Landlord and Tenant Act (URLTA)
- Smaller counties: Governed by Tennessee Code Title 66
Major cities like Nashville, Memphis, Knoxville, and Chattanooga fall under URLTA.
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. Request a demo to see how Passive automates inspection tracking.
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.