Security Deposit Alternative in Delaware
Delaware caps a security deposit at one month's rent on any lease of a year or more, and the same ceiling catches a month-to-month tenancy once it has run a year, with anything above it credited straight back to the resident. The deposit lives in a Delaware escrow account that you cannot use in the business and whose location the resident is told. What you may take from it is limited to damage beyond normal wear that painting and ordinary cleaning will not fix, rent arrears including late charges, and the rent lost if the resident leaves early.
What Delaware law says about security deposits
Read from the Delaware statute on 2026-09-11. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Delaware resident?
Delaware has no statute written for a monthly fee charged instead of a deposit, and one clause in the cap is worth reading before you design around it. Section 5514 limits the deposit to one month's rent on an agreement of a year or more, and on a month-to-month tenancy once it has run a year, at which point the excess has to be credited back immediately. The clause says the limit catches an amount “which when combined with the amount of any surety bond is in excess of 1 month's rent”, so Delaware already contemplates a bond sitting alongside a deposit and counts the two together. Furnished units are outside the cap. Whatever you do hold goes into an escrow account at a federally insured bank with a Delaware office, designated for deposits, kept out of the business, and its location disclosed to the resident.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Delaware
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a Delaware property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
Delaware security deposit alternative FAQs
Delaware has no statute answering that, so a mandatory version is a question for your own attorney. Raise section 5514 with them: it counts a surety bond together with the deposit against the same one-month ceiling, which is the closest thing Delaware has to a rule about an alternative.
See it on your Delaware units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.