Burlington Security Deposit Rules: What the Minimum Housing Standards Ordinance Adds to Vermont Law

A landlord in Burlington has to satisfy two sets of rules at once: the Vermont statute, 9 V.S.A. § 4461, and the city's own Minimum Housing Standards Ordinance (Burlington Code § 18-120). The state law sets the 14-day return deadline after termination of the tenancy; the local ordinance adds rules on deposit cap, interest on the deposit, receipt and itemization, rent-increase notice and relocation assistance. Where the two overlap, the landlord has to meet the stricter one.

What the Minimum Housing Standards Ordinance adds

• Deposit cap: Burlington caps the security/damage deposit an owner may charge as a condition of rental at one month's rent, and bars any other up-front payment beyond the first month's rent except an additional payment of one-half of one month's rent where a pet is allowed (not chargeable for an animal that mitigates a disability); state law (9 V.S.A. 4461) sets no dollar cap at all. (18-120(a)(1)-(2))
• Interest on the deposit: Burlington requires the deposit to be held in an interest-bearing account paying at least the rate of a current Vermont bank passbook savings account, and the interest is returned to the tenant; ordinary Vermont state law imposes no interest obligation on residential security deposits, though 9 V.S.A. 4461(g) expressly permits a municipal ordinance to authorize interest. (18-120(a)(1))
• Receipt and itemization: At the start of every tenancy, Burlington requires the owner and tenant to jointly prepare and sign a dated list of the unit's existing damage, to be kept by both parties for later deposit disputes -- a move-in itemization step not found in the state deposit statute. (18-120(b))
• Rent-increase notice: Burlington requires at least 90 days' advance written notice before any rent increase on rental housing in the city takes effect, longer than the 60-day rent-increase notice required statewide under 9 V.S.A. § 4455(b). (18-29a(c))
• Relocation assistance: If a tenant is displaced by the city's housing-code enforcement (for example, suspension or revocation of a rental certificate of compliance) through no fault of the tenant, Burlington requires the owner to pay the tenant's relocation costs (moving expenses, required deposits, pro rata rent), with the city paying and lien-ing the property if the owner does not. (18-28(a)-(d))
• Relocation assistance: If a landlord ends a tenancy or refuses to renew a written rental agreement for the purpose of converting the unit into a short-term rental, Burlington requires the host to pay the displaced tenant's relocation costs (as defined by 18-28(c)) within 10 days after the tenant vacates, provided the tenant has paid all rent due and payable before vacating. (18-29a(d))
• Other local rule: Where there is no written rental agreement, Burlington requires at least 90 days' advance written notice to terminate a tenancy without cause if the tenancy has run less than two years, and 120 days if it has run two years or more, and is not limited by rent-payment period; state law (9 V.S.A. 4467(c)(1)) requires 60 days for monthly tenancies of two years or less and 90 days for those longer. (18-29a(a))

Who it covers: Residential rental units in the City of Burlington that are subject to the Minimum Housing Code.
Worth knowing: Vermont state law sets no deposit cap and requires no interest, and 9 V.S.A. § 4461(g) expressly lets a municipality adopt a supplemental deposit ordinance — which is what Burlington did, so the local rule is the operative one here. Read from the City's own code host at codepublishing.com.

What Vermont law already requires

• Return deadline: 14 days after termination of the tenancy.
• Detail: 60 days for a seasonal tenancy.
• Itemized deductions: required in writing.
• Forwarding address: not a statutory condition of getting the deposit back.
• Penalty for wrongful withholding: Missing the 14-day deadline forfeits the right to withhold; willful failure exposes the landlord to double the deposit plus attorney's fees.
• Deposit cap: None statewide (some municipalities cap at one month).
• Small claims limit: $5,000.
• Statute: 9 V.S.A. § 4461.

Using both rules together

1. Read the lease for the deposit amount, the move-in date, and any clause that mentions the ordinance.
2. Check the local rule first: deposit cap under Burlington Code § 18-120, then interest on the deposit, receipt and itemization, rent-increase notice and relocation assistance.
3. Count the Vermont deadline of 14 days from termination of the tenancy.
4. A written demand that cites both 9 V.S.A. § 4461 and Burlington Code § 18-120 carries more weight than one that cites either alone. Missing the 14-day deadline forfeits the right to withhold; willful failure exposes the landlord to double the deposit plus attorney's fees.

Frequently Asked Questions

Q: Does Burlington require interest on security deposits?
A: Yes. Burlington requires the deposit to be held in an interest-bearing account paying at least the rate of a current Vermont bank passbook savings account, and the interest is returned to the tenant; ordinary Vermont state law imposes no interest obligation on residential security deposits, though 9 V.S.A. 4461(g) expressly permits a municipal ordinance to authorize interest. The ordinance sets no figure of its own — it requires at least the rate paid on a current Vermont bank passbook savings account, so the rate has to be looked up for the period the deposit was held.

Q: Is the Burlington deposit return deadline different from Vermont law?
A: No. The Minimum Housing Standards Ordinance does not change the return deadline, so the Vermont rule applies: 14 days after termination of the tenancy under 9 V.S.A. § 4461.

Q: Does the Minimum Housing Standards Ordinance apply to my unit?
A: Residential rental units in the City of Burlington that are subject to the Minimum Housing Code. Check the section cited below for the full list of exemptions before relying on it.

Q: Can I sue my landlord in small claims court for my Vermont deposit?
A: Yes. Vermont small claims court hears claims up to $5,000, which covers most deposits plus the statutory penalty. A dated written demand that cites 9 V.S.A. § 4461 is the usual first exhibit.

Sources Checked

• Burlington, Vt., Code of Ordinances ch. 18 (Minimum Housing Standards) § 18-120 (Deposits), with § 18-28 (relocation services) and § 18-29a (termination of rental housing tenancy; rent increase), Minimum Housing Standards Ordinance: code text, read 2026-09-20
• 9 V.S.A. § 4461 (the Vermont statute cited above)
• LeaseLenses Vermont deposit data set, last reviewed 2026-09-19; the same data powers the Vermont demand letter tool
• Vermont landlord-tenant overview and the Vermont deposit rules page

This page is general legal information for Burlington, Vermont, not legal advice. Local ordinances are amended more often than state statutes; read the current code text before relying on a figure in court.