Author: Randy Whetsell
If you own a rental property in Clarksville, Tennessee, Oak Grove, Kentucky, or Hopkinsville, Kentucky, security-deposit compliance depends on the state law, the lease, and: particularly in Kentucky: the local jurisdiction.
Tennessee generally does not impose a statewide dollar cap on residential security deposits. Tennessee landlords must use a dedicated account, follow required inspection and notice procedures, and make any refund or itemized accounting within a reasonable time under current law. Kentucky also does not impose a blanket one-month statewide cap, and Kentucky’s detailed security-deposit statute applies only in communities that have adopted the Uniform Residential Landlord and Tenant Act. Oak Grove and Hopkinsville are generally treated as non-URLTA communities, so the lease and general contract principles become especially important there.
This article provides general information, not legal advice. Before you draft a lease, withhold a deposit, or handle a tenant dispute, consult a Tennessee or Kentucky attorney familiar with the property’s location.
Tennessee security-deposit rules for Clarksville landlords
Clarksville and Montgomery County fall within Tennessee’s Uniform Residential Landlord and Tenant Act. The primary security-deposit statute is Tennessee Code Annotated § 66-28-301.
Is there a maximum security deposit in Tennessee?
Tennessee’s current statute does not establish a statewide dollar cap for a residential security deposit. A landlord may set an amount in the lease, but the amount should be reasonable for the property, consistently applied, and clearly disclosed before the tenant signs.
A refundable pet deposit generally should be handled as part of the security deposit. A nonrefundable pet fee should be clearly identified as a fee rather than a deposit. Assistance animals are not pets under fair-housing law, so landlords should obtain legal guidance before charging any animal-related fee or deposit.
Tennessee also does not give a tenant an automatic right to use the security deposit as the final month’s rent. Unless the lease clearly permits that arrangement, the tenant should continue paying rent as required. If final rent remains unpaid, it may be an allowable deduction from the deposit, subject to the lease and applicable law.
How must a Tennessee landlord hold the deposit?
A landlord who requires a security deposit must place it in an account used only for security deposits at a regulated bank or lending institution. The landlord must also disclose the location of that account to the tenant as required by the statute.
Failing to follow the separate-account requirement can affect the landlord’s ability to retain any portion of the deposit. This is one reason a dedicated deposit-account process is safer than combining deposits with operating funds.
What deductions are allowed?
A Tennessee landlord may generally apply the deposit to amounts the tenant owes under the rental agreement, such as:
- Unpaid rent
- Certain unpaid utilities or other approved charges
- Physical damage beyond ordinary wear and tear
- Reasonable cleaning or repair costs permitted by the lease and applicable law
Normal wear and tear is not the same as damage. Faded paint, ordinary carpet aging, minor scuffs, and gradual deterioration from normal use generally should not be charged as tenant damage. A landlord should document the condition at move-in, compare it with the condition at move-out, and retain invoices, photographs, estimates, and other supporting records.
What is Tennessee’s return timeline?
Tennessee’s current statute does not clearly create a simple “return within 30 days” rule. The 30-day language in the statute concerns the discovery of physical damage after the tenant vacates, not necessarily a universal refund deadline.
The statute also includes a 60-day period related to a tenant’s response to a written refund notice. Because the timing provisions can be misunderstood, Clarksville landlords should avoid waiting until the last possible moment. Inspect promptly, prepare a detailed accounting, send the notice to the tenant’s last known or reasonably determinable address, and return any undisputed balance without unnecessary delay.
A written lease should also state how the tenant must provide a forwarding address and how deposit communications will be delivered.
Kentucky security-deposit rules for Oak Grove and Hopkinsville owners
Kentucky requires a different analysis. The state’s primary security-deposit statute is Kentucky Revised Statutes § 383.580, but that provision is part of Kentucky’s optional Uniform Residential Landlord and Tenant Act.
Unlike Tennessee, Kentucky allows local governments to decide whether to adopt URLTA. The detailed procedures in KRS § 383.580 do not automatically apply everywhere in the state.
Does Kentucky limit the deposit to one month’s rent?
There is no blanket one-month statewide cap in KRS § 383.580. Claims that Kentucky automatically limits every residential security deposit to one month’s rent are not supported by the current statutory text.
For Oak Grove and Hopkinsville owners, the most important point is jurisdiction. Christian County and the cities of Oak Grove and Hopkinsville are generally treated as non-URLTA jurisdictions. That means the detailed account, inspection, and notice procedures in KRS § 383.580 may not apply in the same way they would in a URLTA community.
Because local ordinances and individual facts matter, an owner should confirm the property’s current legal status with Kentucky counsel before relying on a statewide summary.
What does KRS § 383.580 require where it applies?
In Kentucky communities that have adopted URLTA, KRS § 383.580 generally requires a landlord to:
- Place deposits in a separate account used only for that purpose.
- Tell the tenant where the account is located and provide the required account information.
- Give the tenant a move-in list of existing damage before accepting the security deposit.
- Give the tenant an opportunity to inspect the property.
- Conduct a move-out inspection and prepare an itemized damage list.
- Send the disposition statement and any refund to the tenant’s last known or reasonably obtainable address.
The statute does not establish a universal one-month cap. It also does not contain the simple statewide 30-day refund rule frequently repeated in online summaries. Instead, the law includes a 60-day tenant-response provision after the landlord sends the deposit statement.
For a property in Oak Grove or Hopkinsville, the lease should still include clear deposit terms, even if KRS § 383.580 does not apply. State the amount, permitted deductions, move-in documentation process, forwarding-address requirement, and expected timing for the accounting and refund.
Tennessee and Kentucky: practical comparison
| Issue | Clarksville, Tennessee | Oak Grove/Hopkinsville, Kentucky |
|---|---|---|
| Statewide deposit cap | No clear statutory dollar cap | No blanket one-month cap in KRS § 383.580 |
| Separate account | Required under Tenn. Code Ann. § 66-28-301 | Required under KRS § 383.580 where URLTA applies |
| Move-in checklist | Strongly recommended; statutory procedures apply | Required by KRS § 383.580 where URLTA applies; otherwise include it in the lease process |
| Itemized deductions | Required when withholding amounts | Required under KRS § 383.580 where URLTA applies; best practice everywhere |
| Fixed refund deadline | Current statute does not provide a simple universal day count | No universal 30-day deadline in the current KRS § 383.580 text |
| Tenant response period | 60-day rule applies to written refund notice | 60-day rule applies under KRS § 383.580 where the statute applies |
The safest operational rule in both states is simple: document everything, make only lawful deductions, provide a clear itemized statement, and return undisputed funds promptly.
A better move-in and move-out process
A written checklist can prevent many deposit disputes. Before the tenant moves in, photograph each room, appliance, floor, wall, fixture, and exterior area. Note existing marks, stains, damaged hardware, and missing items. Have the tenant review and sign the checklist.
At move-out:
- Confirm the date the tenant surrendered possession.
- Record when keys, remotes, and access devices were returned.
- Photograph the property before repairs or cleaning begin.
- Separate ordinary wear from chargeable damage.
- Obtain invoices, estimates, or other support for deductions.
- Prepare an itemized statement using clear descriptions and dollar amounts.
- Send the statement and refund through a trackable method.
- Keep the complete file with the lease, notices, photographs, and receipts.
Why lease language matters
A strong lease should explain:
- The deposit amount and any separate refundable pet deposit
- Whether prepaid rent is being collected and how it will be applied
- That the deposit cannot be used as last month’s rent unless the lease expressly allows it
- Permitted deductions
- The tenant’s move-in inspection and dispute process
- The forwarding address requirement
- The method used to send deposit notices
- The expected procedure for returning any balance
Owners should also identify the true property owner or authorized management agent in active lease documentation. Clear ownership and contact information helps tenants know where to direct notices and reduces confusion when a property is managed after a military relocation or other move.
If you are leaving the area after a PCS, learn who can manage your Clarksville house after PCS. A professional manager can coordinate inspections, maintenance, tenant communication, and deposit accounting while you are stationed or living elsewhere.
Final takeaway for local landlords
Security-deposit rules are not identical across the state line. Tennessee landlords in Clarksville must follow the procedures in Tenn. Code Ann. § 66-28-301. Kentucky landlords in Oak Grove and Hopkinsville must determine whether local URLTA rules apply and should not assume that a one-month cap or automatic 30-day deadline exists.
Regardless of location, use a detailed lease, complete a signed move-in checklist, document the property with photographs, itemize every deduction, and return undisputed funds promptly. If you need help evaluating your rental’s operations or preparing it for a tenant, review the current Clarksville rental market or contact Haus Realty & Management.
This article is for general educational purposes only and is not legal advice. Laws, local ordinances, and court interpretations can change. Consult a licensed attorney before taking action on a specific security-deposit issue.
