Deposit Cap

Full Definition

A deposit cap is the maximum amount a landlord is legally permitted to collect as a security deposit. Most U.S. states set this limit at one or two months' rent. California caps deposits at two months' rent for unfurnished units (three months for furnished). New York limits deposits to one month's rent for most residential leases. Some states, such as Texas and Florida, impose no statutory cap at all, leaving it to market forces and individual lease negotiations. States that include last month's rent in their caps effectively lower the practical deposit a landlord can hold. Collecting more than the statutory cap is itself a violation; the landlord may owe the excess back to the tenant, and in some jurisdictions the over-collection triggers penalty provisions similar to those for wrongful withholding.