What are the security deposit rules in Tennessee?

Verified July 9, 2026 All Tennessee topics →

Pending legislation — not yet law. The rules on this page reflect current law only. The following bill would change it if enacted:

SB 961 / HB 955 (114th General Assembly) — 'Affordable Housing and Tenant Protection Act' — Would repeal the residential half of the rent-control preemption in T.C.A. § 66-35-102, allowing local rent control adopted by a two-thirds vote with a local rent agency, plus a THDA gap-financing program. Would flip local_control_preempted for residential property if ever enacted.Status: Not enacted. HB 955 was deferred in the House Cities & Counties Subcommittee to the 'January 2027 calendar' on 2026-03-18 — with the 114th GA adjourned sine die, this is effectively a soft kill; watch for a 115th GA refile. (checked 2026-07-09).

Tennessee sets no cap on security deposits and — almost uniquely — no fixed deadline for returning them: the statute instead requires the landlord to mail the departing tenant notice of any refund due, and a tenant who fails to respond within 60 days forfeits the entire refund to the landlord.

The deposit must sit in a dedicated account at a regulated institution, disclosed by location (not account number) when the lease is signed, and damage charges rest on an inspection-and-listing procedure with sharp edges for tenants: skipping a scheduled inspection can waive the right to contest charges if the lease says so, and a tenant who signs the damage listing without written item-by-item dissent cannot later sue over those items. The penalty for landlord noncompliance is only forfeiture of the right to withhold — no double or treble damages, no attorney fees. Critically, all of this applies only in Tennessee's 19 large URLTA counties (those over 75,000 people as of the frozen 2010 census, including Davidson, Shelby, Knox, and Hamilton); in the other 76 counties there is no deposit statute at all and the lease alone governs.

Tennessee security deposits at a glance

Maximum deposit	No statutory cap
Return deadline	No statutory deadline
Deadline conditions	Tennessee sets NO fixed deadline for returning a deposit — a structural oddity worth the answer box. What the statute provides instead (§ 66-28-301): if the tenant leaves owing nothing and a refund is due, the landlord must send notice of the refund amount to the tenant's last known or reasonably determinable address, and if the TENANT does not respond within 60 days of that notice, the landlord may remove the deposit from the account and keep it free of any claim (subsection (f)). Damage costs can only be recovered if discovered before the earlier of 30 days after the tenant vacated or 7 days after a new tenant takes possession (subsection (g)).
Itemization required	Yes
Itemization rules	Retention requires a listing of damages, built through an unusual inspection scheme (§ 66-28-301(b), rewritten by 2011 Pub. Ch. 272): the landlord MAY (not must) give written notice of the tenant's right to be present at an inspection held the day the tenant fully vacates or within 4 calendar days after; if the lease so provides, a tenant who schedules and then skips the inspection WAIVES the right to contest the damages found. A tenant may request a mutual inspection, producing a comprehensive signed listing of presently ascertainable damage with estimated repair costs — a tenant who refuses to sign must state written dissent item by item, and any later lawsuit is limited to the items dissented from (subsection (d)). No inspection right exists at all if the tenant vacated without required written notice, abandoned, was judicially removed, failed to respond or appear, or never requested a mutual inspection (b)(2)(B).
Separate account required	Yes
Interest owed to tenant	No
Account & interest rules	No interest is owed. Deposits must be kept in an account 'used only for that purpose' at a bank or lending institution subject to state or federal regulation (§ 66-28-301(a)), and the landlord must tell the tenant the LOCATION of that account (not the account number) when the lease is signed and the deposit paid (subsection (h), as rewritten by 2012 Pub. Ch. 887).
Pet deposits	No statute addresses pet deposits; with no cap of any kind, they are a lease matter (URLTA counties and non-URLTA counties alike).
Non-refundable fees allowed	Not addressed by statute
Penalty for violation	Forfeiture only — and narrow: a landlord may not retain any portion of the deposit if it was not kept in a dedicated account as required by (a) AND a listing of damages was not provided as required by (b) (§ 66-28-301(c) — the statute's literal 'and' leaves ambiguous whether both failures are needed, a drafting quirk encoded as written). Tennessee has NO damages multiplier, no bad-faith penalty, and no attorney-fee award for deposit violations — among the weakest deposit-enforcement regimes in the dataset.
Tenant forwarding-address duty	No affirmative duty — the landlord's notice runs to the 'last known or reasonably determinable address' — but the incentive is severe: a tenant who fails to respond within 60 days of the refund notice forfeits the entire refund to the landlord (§ 66-28-301(f)).

Notes and caveats

The URLTA scope trap is the headline: § 66-28-301's own text says 'all landlords of residential property,' but § 66-28-102(a) confines the entire chapter to counties over 75,000 per the 2010 census — FROZEN there by 2021 Pub. Ch. 182, which deleted 'or any subsequent federal census,' so counties growing past 75k later do NOT join. Consumer sites routinely present these rules as statewide; 76 of 95 counties have no deposit statute. Second trap: sources describing a mandatory joint move-out inspection within 10 business days describe the PRE-2011 statute — 2011 Pub. Ch. 272 replaced it with the landlord-optional-notice scheme. max_deposit, return_deadline_days, and nonrefundable_fees_allowed are null because no statutory provision exists for any of them (documented per the data rules); the 60-day tenant-response forfeiture and the 30/7-day damage-discovery windows carry the real deadlines and live in return_deadline_conditions. No amendment to § 66-28-301 since 2012 (credit line verified).

Statute citations

T.C.A. § 66-28-301 (current-code mirror, 2024 ed.) (a)-(h) Unofficial mirror
2011 Pub. Ch. 272, §§ 6-9 (official session law rewriting the inspection scheme, eff. 2011-10-01) Official source
2012 Pub. Ch. 887 (official session law rewriting subsection (h)) Official source

How this record was verified: Tennessee's official code is published via LexisNexis without stable deep links (GA-class sourcing situation), so verification pairs current code mirrors with official session-law PDFs from the Tennessee Secretary of State: T.C.A. §§ 66-28-102, 66-28-201, 66-28-301, 66-28-403, 66-28-512, and 66-35-102 read verbatim on the Justia 2024-edition and FindLaw (current through 2024-01-02) mirrors — §§ 66-28-102, 66-28-201, and 66-28-403 each read twice via independent fetches that matched — with every recent amendment traced to the official act text: 2011 Pub. Ch. 272 (inspection scheme, late-fee rule, entry rewrite), 2012 Pub. Chs. 847 and 887, 2013 Pub. Ch. 206, and 2021 Pub. Ch. 182 (census freeze + county preemption), all read from publications.tnsosfiles.com PDFs. Bill statuses (SB 961/HB 955 et al.) checked on official capitol.tn.gov pages 2026-07-09.