Overview
Vermont security deposit laws are governed by 9 V.S.A. Chapter 137 (Residential Rental Agreements). Vermont has no statewide deposit cap, a short 14-day return deadline, and requires written statements of property condition. Note that Burlington has stricter local ordinances. A security deposit compliance platform can help landlords navigate these requirements.
Maximum Security Deposit
Vermont does not set a statewide maximum limit on security deposit amounts. The amount is determined by agreement between the landlord and tenant.
- No state statutory cap on deposits
- Market practice typically ranges from 1-2 months' rent
- The deposit amount must be stated in the rental agreement
Burlington Local Ordinance
Important: The City of Burlington has a local ordinance that caps security deposits at one month's rent. Property managers operating in Burlington must comply with this stricter local requirement.
Pet Deposits
Vermont allows landlords to charge additional pet deposits. Service animals and emotional support animals cannot be charged pet deposits under fair housing laws.
Return Timeline
Under 9 V.S.A. § 4461, landlords must return the security deposit within 14 days after the tenant vacates and returns the keys.
- Must include a written itemized statement of any deductions
- The statement must describe each deduction and its cost
- The remaining balance must be returned to the tenant's last known address
Interest Requirements
Vermont does not require landlords to pay interest on security deposits. Any interest earned on the deposit belongs to the landlord.
Storage Requirements
Vermont law does not mandate that security deposits be held in a separate account or in any specific type of financial institution. However, deposits must be available for return at the end of the tenancy. (New Hampshire has similar provisions—see New Hampshire security deposit laws.)
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Cleaning costs if the tenant fails to leave the unit as clean as when received
- Other charges specified in the rental agreement
Property Condition Statement
Vermont requires landlords to provide tenants with a written statement describing the condition of the rental unit at the beginning of the tenancy. This protects both parties by documenting pre-existing conditions.
Penalties for Non-Compliance
If a landlord fails to comply with Vermont security deposit laws:
- Failure to return the deposit within 14 days may result in the tenant recovering the full amount of the deposit
- The tenant may also recover actual damages
- The court may award reasonable attorney's fees
- Willful violations may result in additional penalties
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 streamlines this documentation process.
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.