A D.C. housing provider cannot hold more than one month of rent as security deposit, according to newly clarified rules. 

The D.C. Rental Housing Commission (the “Commission”), the body charged with reviewing appeals from the Office of Administrative Hearings (OAH), recently held that a second month's rent collected as “last month's rent,” and held as security for the lease, counts as a security deposit. 

D.C.'s security deposit regulations limit a deposit to “an amount equivalent to the first full month's rent charged that tenant for the dwelling unit.” They define a security deposit broadly, as “all monies paid to the owner by the tenant as a deposit or other payment made as security for performance of the tenant's obligations in a lease or rental of the property.”

In the case before the Commission, Ippolito-Shepherd v. Shipley, the tenant paid $2,350 as a security deposit and another $2,350 labeled “last month's rent”. The lease called only one of the two $2,350 payments a security deposit. The Commission held that the label did not control, because “contractual language cannot supersede a statutory requirement.” The lease itself described both payments as held for the tenant's performance of the lease. That meant the housing provider was holding two months' rent as security.

The Commission affirmed OAH's ruling to refund of the extra $2,350, with interest, “regardless of any potentially valid bases for the non-return of a security deposit.” This part of the decision carries the most weight for housing providers. The excess had to be refunded even though the housing provider may have had legitimate claims against the tenant. A housing provider that holds more than the cap must return the excess with interest, whatever claims it may have against the tenant.

How about pet security deposits? 

As of October 1, 2026, A housing provider can charge a refundable Pet Deposit of up to 15% of monthly rent, in addition to the ordinary security deposit for the unit. Providers can use that Pet Deposit only for damage directly caused by the pet that exceeds ordinary wear and tear.

How We Can Help

The Law Office of Alfredo Vasquez reviews leases, addenda, and deposit practices for D.C. housing providers and represents clients in security deposit disputes. Contact our office to schedule a consultation.

This post is for general informational purposes and does not constitute legal advice.