Indiana Code 32-31-2 sets the rules for security deposits in rental agreements, affecting landlords and tenants across the state. The statute applies to all rental properties, including apartments, houses, and condominiums.
As of January 1, 2019, the statute has been in effect, with a threshold of $100 for security deposits.
Security Deposit Limits
According to Indiana Code 32-31-3, the maximum security deposit is equal to one month’s rent for a lease of less than one year, with a $100 minimum. In plain terms, this means that landlords can charge a security deposit of up to one month’s rent, but no less than $100. The statute also requires that the security deposit be returned within 45 days of the tenant‘s move-out date.
This is where the law gets teeth, as failure to return the security deposit within the 45-day time limit can result in the landlord being liable for twice the amount of the deposit, plus court costs and attorney’s fees, under the standard set by the Restatement (Second) of Torts.
In practice, this means that landlords must carefully document any damages or deductions from the security deposit, as the court will review these records to determine the legitimacy of any claims, under the Indiana Rules of Evidence, Rule 702.
Notices and Eviction Steps
Notice Requirements
Indiana Code 32-31-5 requires that landlords provide tenants with a written notice of at least 10 days before filing an eviction lawsuit, with a $500 filing fee. The notice must state the reason for the eviction and give the tenant an opportunity to cure any defects or pay any outstanding rent, within 10 days.
The notice must be served on the tenant by certified mail or in-person delivery, with a return receipt requested, under the Indiana Rules of Trial Procedure, Rule 4.1.
Eviction Procedures
Once the notice period has expired, the landlord can file an eviction lawsuit in small claims court, with a $6,000 jurisdictional limit. The court will schedule a hearing, which must be held within 21 days of the filing of the complaint, under the Indiana Rules of Trial Procedure, Rule 41.
The tenant has the right to appear at the hearing and present a defense, which may include claims of retaliatory eviction or breach of the rental agreement, under the standard set by the Indiana Supreme Court in the case of Hatcher v. Porter.
Legal Process in Indiana
The court with jurisdiction over eviction cases in Indiana is the small claims court, with a $6,000 jurisdictional limit. The filing fee for an eviction lawsuit is $137, with a 30-day time limit for service of process.
The court will review the evidence presented by both parties and make a determination on the eviction, based on the Indiana Rules of Evidence and the standard set by the Restatement (Second) of Torts.
Penalties and Consequences
Landlords who fail to comply with the security deposit requirements can be liable for twice the amount of the deposit, plus court costs and attorney’s fees, under the standard set by the Indiana Supreme Court in the case of Hatcher v. Porter. This can result in a judgment of up to $2,000, plus $500 in court costs and $1,000 in attorney’s fees.
In addition, landlords who engage in retaliatory eviction practices can be subject to a civil penalty of up to $1,000, under the Indiana Code 32-31-8, with a 6-month statute of limitations.
Comparison to Other States
Indiana’s security deposit laws are similar to those in neighboring states, such as Illinois and Michigan. However, Illinois has a higher maximum security deposit limit of two months’ rent, with a $100 minimum, while Michigan has a lower limit of one and a half months’ rent, with a $50 minimum.
In contrast, states like California and New York have more stringent security deposit laws, with lower maximum limits and stricter requirements for landlords, under the California Civil Code, Section 1950.5, and the New York Real Property Law, Section 232-A.
Practical Steps and Enforcement
Tenants who believe their landlord has failed to comply with the security deposit requirements can file a complaint with the Indiana Attorney General’s Office, with a $25 filing fee. The office will investigate the complaint and take enforcement action if necessary, within 90 days.
In addition, tenants can also seek assistance from local tenant advocacy groups, such as the Indiana Tenant Rights Coalition, which provides education and advocacy services to tenants, with a 24-hour hotline.
Recent Changes and Legislative Status
In 2020, the Indiana General Assembly passed Senate Bill 340, which made changes to the security deposit laws, including increasing the maximum security deposit limit to one and a half months’ rent, with a $150 minimum. The bill also added new requirements for landlords to provide tenants with a written notice of any changes to the rental agreement, within 30 days.
The future of Indiana’s security deposit laws is likely to be shaped by ongoing legislative efforts to balance the interests of landlords and tenants, with a focus on providing greater protections for tenants, under the standard set by the National Consumer Law Center, with a 2-year review cycle.
The court is currently reviewing the implementation of these changes, with a focus on ensuring compliance with the new requirements, under the Indiana Rules of Trial Procedure, Rule 60.
- U.S. Department of Housing and Urban Development. tenant rights and fair housing
- Consumer Financial Protection Bureau. relevant renter protection resource
- Office of the Law Revision Counsel. relevant federal housing statute
