Security Deposit Rules in Philadelphia (2026 Tenant Guide)

A security deposit can feel like a locked box of your own money. You hand it over, then you hope it comes back. The good news is Philadelphia security deposit rules follow clear limits and deadlines, and in 2026 there’s a newer city rule that can make move-in costs easier to handle.

This guide breaks it down in plain English, with a timeline you can follow from move-in to after move-out. If you’re comparing rentals and scanning listings, this is the kind of detail that helps you budget and avoid surprises.

Move-in: how much can a landlord charge in 2026?

Philadelphia deposit limits mostly come from Pennsylvania’s Landlord and Tenant Act (commonly cited as 68 P.S. § 250.511a). In practice, that means:

• Year 1 cap: up to two months’ rent as a security deposit.
• After Year 1: the landlord can hold no more than one month’s rent as the deposit.

So, if your rent is $1,800, the maximum deposit in the first year is $3,600. Once you pass the first year mark, the landlord should only be holding $1,800 as your deposit, and any extra should be returned.

Philadelphia’s installment option (effective December 2, 2025)

Here’s the 2026 update that matters for many tenants: if the security deposit is more than one month’s rent, certain landlords must give you a choice to pay it in installments. The rule applies to landlords who own or manage three or more units.

The standard installment structure described in Philadelphia’s 2025 update is:

• Pay one month’s rent (as deposit) at move-in
• Pay the remaining deposit balance in three equal monthly payments, starting the next month

For a clear summary of the change and who it covers, see the Philadelphia rental law update (Dec. 2, 2025).

Fast gut-check: If your deposit equals one month’s rent or less, installments usually won’t matter. If it’s two months, the installment choice can cut your move-in bill a lot.

Example (rent is $1,800, deposit is $3,600):
You could pay $1,800 at move-in, then $600 per month for 3 months to finish the remaining $1,800.

During tenancy: deposit drops after Year 1, and interest can apply later

After your first year ends, Pennsylvania law limits what the landlord can keep as a deposit. If you started with a two-month deposit, Year 2 is when the extra month should come back (or be credited back, depending on how you and the landlord handle it). Don’t wait until move-out to ask. It’s easier to fix while everyone’s still in contact.

When does a landlord owe interest?

Interest is not owed in most short tenancies, but it can come into play after you’ve been there a while. Under state rules, if your deposit is over $100 and your lease continues beyond the early period (commonly explained as after two years, going into year 3), the landlord must place it in an interest-bearing escrow-type account, then pay you the interest yearly (while keeping 1 percent as an administrative fee).

A simple way to picture it:

• Deposit: $1,800
• Hypothetical bank interest rate: 2% in a year
• Interest earned: $1,800 × 0.02 = $36
• Landlord admin fee (1% of interest): $36 × 0.01 = $0.36
• Tenant share: $35.64

Your actual amount depends on the bank’s rate, not this example.

Keep a paper trail while you live there

Save proof of:

• What you paid (receipts, bank records)
• What the deposit was for (lease clause)
• Repair requests (dated emails or portal screenshots)

Those records matter if there’s a disagreement later.

Move-out: set yourself up to get the deposit back

Move-out is where most deposit fights start, and most of them are avoidable. Think of your deposit like a “condition bet.” You win it back by proving you left the unit in good shape, minus normal living.

Normal wear and tear vs. chargeable damage

Landlords can usually deduct for things like unpaid rent, major damage, or extra cleaning beyond what’s reasonable. On the other hand, normal wear and tear is the slow fade of everyday life: light scuffs, gently worn carpet paths, loose door handles, or small nail holes (depending on how many and how patched).

A few practical moves help more than any argument:

• Take clear photos and a short video after your stuff is out.
• Do a basic clean (floors, appliances, bathroom, trash).
• Return all keys and fobs, and keep proof.
• Ask for a walkthrough if the landlord will do one.

Philadelphia’s Fair Housing Commission has a tenant protections section that’s helpful if you suspect unfair behavior around fees or deposits. Start with the city’s page on unfair rental practices, and if you need broader context, the Fair Housing Commission homepage points to complaint options.

After move-out: the 30-day deadline, disputes, and ready-to-use templates

In Pennsylvania, the landlord generally has 30 days after you move out (and return keys) to send your deposit back and, if keeping any portion, provide an itemized written list of deductions. If they miss key steps, tenants may have strong remedies under state law.

To keep the timeline simple, here’s a quick view:

When	What you should do	Why it matters
Move-out day	Take photos, return keys, save proof	Locks in the condition and your end date
Within 1 to 3 days	Send a written forwarding address	Helps prevent “we didn’t know where to send it”
By day 30	Expect deposit back or itemized deductions	The legal clock matters
After day 30	Send a demand, then consider court	Shows you tried to resolve it

Gotcha: If the landlord doesn’t provide an itemized list when required, it can limit what they can keep. Don’t ignore deadlines, and don’t rely on phone calls alone.

If you end up in a money dispute, Philadelphia’s small claims process runs through Municipal Court. For a tenant-friendly explanation of security deposit cases and small claims basics in Pennsylvania, see Nolo’s guide to security deposit disputes. For background on the city’s deposit-related changes that took effect in late 2025, local reporting like CBS News coverage of Philadelphia renter deposit help can also provide context.

Template 1: forwarding address notice (send right after move-out)

Subject: Forwarding address for security deposit return
Hello [Landlord/Property Manager Name], I moved out of [Address, Unit] on [Date] and returned all keys on [Date]. Please send any security deposit refund and required itemized statement (if any) to: [Your Name, Forwarding Address]. Thank you, [Your Name], [Phone].

Template 2: security deposit demand letter (after day 30)

Subject: Demand for security deposit refund
Hello [Name], It has been over 30 days since I moved out of [Address, Unit] on [Date] and returned keys on [Date]. I’m requesting the return of my security deposit of $[Amount] and an itemized list of deductions if you claim any amount. Please respond within 7 days. Sincerely, [Your Name], [Forwarding Address], [Phone].

Template 3: deduction-dispute email (when the list looks wrong)

Subject: Disputing security deposit deductions
Hello [Name], I received your itemized deductions for [Address, Unit]. I dispute the following charges: [Charge 1] and [Charge 2] because [brief reason]. Please provide invoices, photos, and the date of repair. I’m requesting a revised statement and the remaining refund of $[Amount]. Thanks, [Your Name].

Conclusion

Security deposits don’t have to be a mystery. Once you know the caps, the installment option for larger deposits, and the 30-day return rule, you can spot problems early and respond fast. Keep everything in writing, save photos, and send your forwarding address right away.

This article shares general information, not legal advice. If a landlord keeps your deposit and your records look solid, it may be time to contact a local tenant advocate or attorney and ask what your next step should be.