Published 2026-09-27 · 8 min read

Kentucky Security Deposit Law 2026: Limits, Deadlines & Deductions

Kentucky doesn't cap the deposit and doesn't give you one clean deadline — instead it runs a paperwork-heavy system: the deposit must sit in a deposit-only bank account you disclose to the tenant, you must hand over damage lists at move-in and move-out, and if you skip either step you lose the right to keep any of the deposit. The return rules then split by situation: 30 days when the tenant skipped the last month's rent, 60 days of tenant silence otherwise. Every section below is from Kentucky Revised Statutes §383.580.

The short version: No cap on the amount. Deposit every security deposit in a separate account at a regulated bank or lender and tell the tenant where it is and the account number. Give the tenant a signed move-in damage list before taking the deposit and a move-out itemized list after — miss either and you forfeit all withholding rights. If the tenant left owing the last month's rent, apply the deposit after 30 days; if a refund is due, notify the last known address and wait 60 days for a reply before the deposit is yours.

Applicability note: §383.580 sits in Kentucky's URLTA (KRS 383.505–383.715), which applies in localities that have adopted it. Where it hasn't been adopted, the written lease governs how the deposit is held and returned — check your city/county.

The statute table

Limits: how much can you charge?

No state maximum. Kentucky caps nothing, so the deposit is set by your lease and the market. There is no statutory formula to stay under and no second-tier amount for furnished units or pets — if the market supports two months' rent, §383.580 does not stop you. But the absence of a cap is paired with the strictest custody rules in this batch: the larger the deposit you collect, the larger the amount you forfeit outright if the separate-account or damage-list steps are skipped, because §383.580(4) strips the right to retain any portion, not just the undocumented part. Confirm your amount with the Security Deposit Max Checker and read on, because the account rules are where landlords get burned.

The 30/60-day rules, precisely

Kentucky has no single "return by day N" deadline. Instead (§383.580(6)–(7)):

• Tenant skipped the last month's rent and never demanded the deposit back: after 30 days, you may remove the deposit from the account and apply any excess to what you're owed.
• A refund is due: send notification of the refund amount to the tenant's last known or reasonably determinable address. If you get no response within 60 days of sending, you may remove the deposit and retain it free from any claim of the tenant.

The practical takeaway: keep the tenant's forwarding address current, send every notice in a provable way, and document the 60-day silence. Use the Security Deposit Deadline Finder to calendar whichever track you're on.

When the clocks actually start

Neither Kentucky clock runs from a single universal "return deadline," and that is the trap. The 30-day clock in §383.580(6) belongs to one fact pattern only: the tenant vacated owing the last month's rent and has not demanded the deposit back. Only when both halves are true does day 30 let you remove the money from the deposit account and apply it. The 60-day clock in §383.580(7) runs from the date you send the refund notification to the tenant's last known or reasonably determinable address — not from move-out, and not from the date you compile the move-out list. A landlord who inspects promptly but mails the refund notice three weeks late has a 60-day window that ends three weeks late. Log three dates in the deposit file: the move-out date, the date the move-out listing was compiled and offered for the tenant's inspection, and the mailing date of the refund notification, with mailing proof attached. In Kentucky the paperwork dates, not the walk-through date, are what prove which track you were on and when it matured.

A worked example

Say a tenant renting for $1,200 a month vacates on Monday, March 2, 2026, leaving a $1,800 deposit on file — lawful, because Kentucky sets no cap. You inspect that week and compile the move-out listing: $450 of damage beyond ordinary wear and tear and $200 of accrued charges, $650 itemized in total, leaving a $1,150 refund due. On Friday, March 6, 2026 you send the refund notification to the tenant's last known address by a mailing method you can prove. Under §383.580(7), the tenant then has 60 days to respond — silence through Tuesday, May 5, 2026 is what lets you remove the refund from the account and retain it free of the tenant's claim; before that date, the refund is the tenant's money sitting in your deposit account, not yours. Contrast the other track: if the same tenant had instead left owing the last month's rent and never demanded the deposit, §383.580(6) would let you remove the deposit after 30 days — Wednesday, April 1, 2026 — and apply the excess to the debt. Same deposit, same move-out date, two different maturities a month apart: picking the right track is a facts question, not a preference.

Never guess which Kentucky track you're on: the Security Deposit Disposition & Deadline Tracker ($14.95) tracks the 30-day and 60-day maturities, the notice mailing date, and per-unit deductions — so a refund never becomes yours (or stays the tenant's) by accident.

Deductions and the itemized list

Deductions are limited to unpaid rent and damage beyond normal wear and tear (§383.580(2), (6)). But the deduction right lives or dies on the two listings:

1. Move-in listing — comprehensive existing-damage list with estimated repair costs, presented before the deposit is paid; tenant inspects, both sign (§383.580(2)).

2. Move-out listing — itemized list of accrued rent, expenses of acquiring possession, unpaid utility/sewer charges, and damage with estimated dollar values; the tenant has the right to inspect the premises to verify it (§383.580(3)).

Skip either listing (or the separate account) and §383.580(4) strips your right to retain any of the deposit. Build the move-out notice with the Security Deposit Deduction Letter Generator.

Move-out compliance checklist

1. Confirm the deposit-only account before you collect anything. The deposit goes into an account used only for that purpose at a regulated bank or lender, and the tenant gets the location and account number in writing (§383.580(1)).

2. Present the move-in damage list before taking the deposit. Comprehensive existing damage with estimated repair costs, the tenant's chance to inspect, and both signatures — or the tenant's signed, item-specific dissent (§383.580(2)).

3. Photograph the unit at move-out before cleaning or repairs. Kentucky's fight is over the listing; dated photos are what back each line on it.

4. Compile the move-out listing at termination of occupancy. Itemize accrued rent, possession expenses, unpaid utilities/sewer, and damage with dollar values, and offer the tenant their inspection right (§383.580(3)).

5. Capture signatures or dissents on the move-out listing. A tenant who refuses to sign must state the specific items they dissent from in writing — under §383.580(5), only those items can later be disputed in District Court.

6. Pick the right return track and calendar it. Skipped last month's rent with no demand → the 30-day track (§383.580(6)); a refund due → notification sent, then the 60-day track (§383.580(7)).

7. Send the refund notification provably, then wait out the full track. Mail to the last known or reasonably determinable address, keep the mailing proof with the listing, and do not remove or spend the money until the 30 or 60 days have fully run.

Interest and where the money sits

Separate deposit-only account is mandatory — at any bank or lending institution subject to regulation by Kentucky or the United States (§383.580(1)). You must tell prospective tenants the location of the account and the account number. No interest is required by statute.

The penalty, spelled out

Kentucky's sanction is structural rather than a multiplier:

• No separate account or no damage listings → forfeit the right to retain any portion of the deposit (§383.580(4)). The deposit comes back whole.
• Tenants who dispute the final listing can sue in District Court — but only over items they specifically dissented from in writing on the move-out listing (§383.580(5)). No dissent, no recovery.

There's no 2x or 3x damages provision in §383.580 — the punishment is losing the money you were trying to keep.

Run the worked example through that sanction. On the $1,800 deposit above, suppose the $650 in charges is entirely legitimate — real damage, real accrued rent — but you never opened the deposit-only account, or you collected the deposit without ever presenting the signed move-in list. Under §383.580(4) the legitimacy of the charges stops mattering: you are not entitled to retain any portion, the full $1,800 goes back, and your $650 claim survives, if at all, only as a separate suit rather than a withholding. The forfeiture is all-or-nothing, which makes Kentucky's arithmetic the mirror image of a multiplier state: the exposure is exactly the amount you tried to keep, but it triggers on a paperwork failure rather than a bad-faith one, and it applies even when every dollar of damage is real. The defense is never the size of the charge; it is the account disclosure, the two signed listings, and the mailing proof for whichever return track you used.

FAQ

Is there a limit on security deposits in Kentucky?

No state cap (KRS 383.580).

Does Kentucky require a separate security deposit account?

Yes — a deposit-only account at a regulated bank or lender, with the location and account number disclosed to the tenant (§383.580(1)).

How long does a Kentucky landlord have to return a security deposit?

There's no single deadline: 30 days to apply the deposit when the tenant skipped last month's rent (§383.580(6)); otherwise notify the last known address and retain the deposit only after 60 days of tenant silence (§383.580(7)).

What happens if the landlord doesn't provide the damage lists?

The landlord loses the right to retain any portion of the deposit (§383.580(4)).

Does Kentucky require interest on security deposits?

No statute requires interest.

Does KRS 383.580 apply everywhere in Kentucky?

It applies in localities that have adopted Kentucky's URLTA; elsewhere the written lease governs deposit handling — check your city/county.

What if the tenant refuses to sign a damage list?

The tenant must state specifically in writing the items they dissent from and sign that statement of dissent. The signatures are treated as conclusive evidence the list is accurate, except for latent defects a tenant could not have seen (§383.580(2)–(3)).

When can I keep a refund the tenant never claimed?

Only after you have notified the tenant of the refund at their last known or reasonably determinable address and received no response within 60 days of sending the notification (§383.580(7)). Silence before you send the notice starts nothing.

Read the statute yourself

Everything on this page traces back to KRS 383.580. If a custody, listing, or return-track question is ever disputed, the primary sources — not a summary — are what control:

• KRS 383.580 (Kentucky Legislature, official) — the official full text covering the deposit-only account, the move-in and move-out listings, the forfeiture rule, and the 30/60-day return tracks.
• KRS 383.580 (Justia) — the same section in Justia's Kentucky Revised Statutes library, useful for cross-checking the listing and notification provisions.
• KRS 383.580 (Cornell Law Institute) — the same section in Cornell's regulations library.

Kentucky's 30/60-day return rules and the damage-list requirement mean paperwork wins or loses your whole deposit. The Security Deposit Disposition & Deadline Tracker ($14.95) keeps your return deadlines, itemized deductions, and mailing dates in one spreadsheet so the clock never sneaks up on you.

The deposit is only one piece of Kentucky compliance. Our full Kentucky landlord-tenant law guide covers the rest of the relationship — the URLTA adoption question, rent rules, termination and eviction notices, the forcible detainer process, habitability duties, and the 2-day entry rule under KRS 383.615.

More security deposit guides

• Security deposit laws by state
• Kansas security deposit law
• Louisiana security deposit law
• Iowa security deposit law
• Maine security deposit law

Last verified: October 15, 2026. This is general information, not legal advice. Verify with a licensed Kentucky attorney before acting.