Security deposits in Vermont are regulated by Vermont Statutes § 4451 to § 4461. Certain municipalities may have local laws that supplement state regulations. To ensure full compliance, verify the regulations applicable in your area.

Maximum Security Deposit

Vermont state law does not currently limit the amount that landlords/property managers can require as a security deposit.

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Holding & Interest Requirements

Holding Requirements: Vermont state law does not currently require security deposits to be held in a bank account within the state, in a separate account, or in an interest-bearing account.

‍Interest on Deposits: Vermont state law does not currently require landlords/property managers to pay interest to tenants on security deposits.

Information Provided to Tenant: Vermont state law does not currently require landlords/property managers to disclose where the security deposit is held.

Deposit Refunds

Timeline: Within 14 days of vacancy, the landlord/property manager must either (1) return the full security deposit to the tenant or (2) provide the tenant with a written statement itemizing any deductions to the security deposit, together with the portion of the security deposit being returned. If the tenant leases the property on a seasonal basis and the rental unit is not intended as the tenant’s primary residence, the landlord/property manager must return the security deposit or a portion thereof with a written statement of any deductions within 60 days of vacancy.

‍Penalties: Failure to return the security deposit or provide a written statement of deductions as required by Vermont state law may result in the landlord/property manager being liable for up to 2x the amount wrongfully withheld from the tenant, plus attorney’s fees and court costs if the tenant wins in a lawsuit.

Documentation of Deductions: Vermont state law does not require any specific documentation or level of detail to be included in the itemized notice of deductions to the security deposit.

‍Penalties for Violations: Failure to return the security deposit or provide a written statement of deductions as required by Vermont state law may result in the landlord/property manager being liable for up to 2x the amount wrongfully withheld from the tenant, plus attorney’s fees and court costs if the tenant wins in a lawsuit.

Sale of the Rental Property

If the property is sold, the landlord/property manager must transfer the security deposit to the new owner. The new owner must then provide the tenant with actual notice of their name and address, as well as a statement that the security deposit has been transferred to the new owner.