Kentucky Security Deposit Law

Learn the Security Deposit Limits and Regulations in Kentucky

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Each state has landlord-tenant laws which dictate the obligations of both the landlord and the tenant. Landlords in the state of Kentucky must adhere to these state-specific rules. A portion of this law applies to the security deposits that landlords receive from tenants. Here are the responsibilities Kentucky landlords have when dealing with tenants’ security deposits.

Is There a Security Deposit Limit in Kentucky?

No.

In the state of Kentucky, no limit is set as to the maximum amount a landlord can request as a security deposit. However, it is typical for a security deposit to be between one and two months’ rent. This amount is generally considered a good cushion for the landlord if the tenant breaches their lease agreement, but not too much to deter prospective tenants from renting the unit. You should always check with your local city or municipality to determine if additional rules may apply in your area.

When Can a Landlord Collect the Security Deposit?

Before a landlord in the state of Kentucky can collect a security deposit from a tenant, he or she must do two things:

  1. Provide the tenant with a list of any pre-existing damages or defects in the unit and the estimated cost of repair.
  2. Inform the tenant of the tenant’s right of inspection. The tenant has the right to inspect the unit prior to move-in to determine if the landlord’s list of damages is accurate. The tenant has two options:
    1. Sign the List:

      The tenant can elect to sign the list of existing damages the landlord has provided. If he or she signs the list, he or she is agreeing that the statement of damages is accurate. The landlord must sign this list as well.

    2. Statement of Dissent:

      If the tenant does not believe the statement of damages the landlord has provided is accurate, he or she can refuse to sign the statement. He or she can write a statement of dissent, which lists all items they do not agree with. The tenant must sign this statement for it to be valid.

    How Must You Store the Security Deposit in Kentucky?

    In the state of Kentucky, a tenant’s security deposit must be placed in a banking or lending institution that is regulated by the state of Kentucky or by the United States Government. This account must only be used for security deposits.

    Is Written Notice Required After Receipt of the Security Deposit in Kentucky?

    Yes.

    After placing the tenant’s security deposit in a banking or other lending institution, the landlord must inform the tenant of the:

    • Name of the Bank
    • Address of the Bank
    • Account Number

    What Are Some Reasons You Can Keep a Tenant’s Security Deposit in Kentucky?

    In the state of Kentucky, you can keep all or a portion of a tenant’s security deposit to cover:

    Is a Walk Through Inspection Required in Kentucky?

    Yes. In the state of Kentucky, a landlord must perform a move-out inspection with the tenant. The landlord must first go through the unit and compile a list of any damages and the approximate cost of repair. The tenant will then have the opportunity to go through the unit with this list of damages. If the landlord and tenant both sign the list, they are agreeing to the damages and the deductions from the security deposit.

    If the tenant does not agree with the list, he or she must write a statement of dissent. In this statement, he or she must list the items he or she does not agree with. The tenant must sign and date the statement. If the tenant pursues any legal action against the landlord, the tenant can only recover money for the items he or she has dissented to on this statement.

    When Must You Return a Tenant’s Security Deposit in Kentucky?

    • Tenants Who Owe Rent:

      If a tenant does not pay their last month’s rent, the tenant has 30 days to make a claim for their security deposit. If they do not try to claim their deposit after 30 days, the landlord can remove the deposit from the bank account and use the deposit to cover the rent owed.

    • Tenants Who Do Not Owe Rent:

      If a tenant does not owe any rent at the end of their lease agreement, the landlord is responsible for notifying the tenant of the amount of their security deposit that they will be refunded. This notification must be sent to the last known address of the tenant or to a forwarding address provided by the tenant. The tenant has 60 days to claim their deposit. After 60 days, the landlord may remove the deposit from the bank account and claim the money.

      If a landlord fails to do the following, he or she will give up the right to retain any portion of the tenant’s security deposit:

      1. Place the tenant’s security deposit in a separate account in a banking or lending institution and notify the tenant of such.
      2. Provide the tenant with a list of pre-existing damages to the unit before tenant move-in.
      3. Provide the tenant with a list of damages existing at the end of tenant’s occupancy.

      What Happens to the Security Deposit If You Sell Your Property?

      In the event that you sell your property, or the property otherwise changes hands, you must either return the security deposit to the tenant or transfer the security deposit to the new owner. You should provide a written notice to both the tenant and the new owner, which discloses the location of the security deposits.

      What Is Kentucky's Security Deposit Law?

      If you are interested in reading the original text of Kentucky’s security deposit law, please consult Kentucky Revised Statutes Annotated § 383.580.