Security deposits in the District of Columbia are regulated by D.C. Code § 42-3502.17; D.C. Code § 42-3404.01 et seq., and the D.C. Municipal Regulations § 102; § 308, § 309, § 310, and § 311.

Maximum Security Deposit

Security deposits are limited to one month’s rent. 

Holding & Interest Requirement

Holding Requirements: District of Columbia law requires landlords/property managers to hold security deposits in an interest-bearing escrow account in a financial institution located in the District of Columbia. The account must be insured by a federal or state agency and be kept separate from the landlord/property manager’s personal funds.

Payment of Interest: Landlords/property managers are required to pay interest to tenants on security deposits affiliated with all leases lasting twelve months or more. The interest shall begin accruing on the date the tenant pays the security deposit. The required interest rate is the same as the prevailing statement savings rate on January 1^st and July 1^st for each six-month period of the tenancy, as offered by the financial institution where the deposit is being held. The accrued interest must be paid to the tenant at the end of the tenancy, subject to lawful deductions.

Information Provided to Tenant: The landlord/property manager must provide tenants with the name and address of the financial institution where the security deposit is being held.

Deposit Refunds

Timeline: Within 45 days after the termination of the tenancy, the landlord/property manager must either (1) return the full security deposit and interest to the tenant or (2) notify the tenant in writing (delivered to the tenant personally or by certified mail at their last known address) of the landlord/property manager’s intention to withhold all or a portion of the security deposit. Within 30 days of the notice described in (2), the landlord/property manager shall refund the balance of the deposit with any interest not deducted from the security deposit.

Permissible Deductions: Landlords/property managers may deduct the following from a security deposit:

• Unpaid rent
• Damages beyond normal wear and tear
• Items or issues specified in the lease at the beginning of the tenancy

Documentation of Deductions: If any portion of the security deposit is withheld, the landlord/property manager must provide the tenant with an itemized statement of deductions made to the security deposit. The itemized statement must include the cost of each deduction. 

Penalties for Violations: Failure to return the security deposit and provide an itemized statement to the tenant as required may result in the forfeiture of the security deposit and any accrued interest. If the above violation is carried out in “bad faith” (i.e. frivolous or unfounded refusal motivated by deceptive, misleading, dishonest, or unreasonably self-serving purposes), the landlord/property manager may be liable for three times the security deposit. If the landlord/property manager fails to return interest to the tenant, the landlord/property manager may forfeit the interest or, if there is a “bad faith” withholding of interest, be liable for three times the interest accrued. If a criminal action is brought against the landlord/property manager, they may be fined up to $300 and imprisoned up to ninety days.