Frequently Asked Questions

Legal Hotline FAQ

A blog of the most frequently asked questions to the Maryland REALTORS Legal Hotline.

Cindy Sellers
Cindy Sellers
Cindy Sellers's Blog

If a tenant and landlord agree that the tenant is to pay rent in advance, is that a violation of the law limiting the amount of security deposit to two months' rent?

According to the Real Property Article of the Annotated Code of Maryland, a security deposit is “any payment of money, including payment of the last month’s rent in advance of the time it is due, given to a landlord by a tenant in order to protect the landlord against nonpayment of rent, damage due to breach of lease, or damage to the leased premises, common areas, major appliances, and furnishings.” Section 8-203(b) states that a “landlord may not impose a security deposit in excess of the equivalent of two months’ rent per dwelling unit, regardless of the number of tenants.” 
Therefore, under no circumstances may a landlord collect more than two months’ rent as a security deposit.
However, in our opinion, if a tenant offers to pay rent before it’s due, the landlord may accept it as a courtesy.  We strongly advise the owner to have an agreement drafted to make it clear that any rent paid in advance is not a security deposit under Maryland law. The agreement should state that the landlord agreed to accept the advanced payment as a courtesy to the tenant and that the owner in no way required the tenant to pay the specified amount.  The tenant should sign the agreement and a copy should be placed in the owner’s files. 

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