Under Indiana law, when a rental agreement terminates a tenant is entitled to a refund of their security deposit minus any deductions for unpaid rent, actual damages to the rental property, or other unpaid obligations under the rental agreement. The landlord must refund the security deposit, minus any deductions, to the former tenant within 45 days after the termination of the rental agreement and the former tenant's delivery of possession of the rental property. In addition, the former tenant, in writing, must notify the landlord of a mailing address.
In addition to returning the former tenant's security deposit, many landlords are unaware of their statutory obligation to provide a former tenant with an itemized list of damages and the estimated or actual cost of repair within the same 45 day period. Failure to mail the statutory notice to a former tenant bars a landlord's ability to recover from the former tenant for the physical damages to the property. In Klotz v. Hoyt, the Indiana Supreme Court found that a landlord's failure to timely and adequately give notice to a former tenant of damages to the rental property bars only the landlord's claim for physical damages. The landlord can still pursue the former tenant for unpaid rent and other losses. If a landlord fails to comply with the statutory obligations, not only are they barred from recovering for the physical damages to the property, they could be required to refund the security deposit and pay the former tenant's attorney fees.
As with all other information contained on this website, you should not consider this legal advice and you should seek advice from a lawyer. Appointments may be arranged to discuss the matter without lawyers but no advice will be given by email.