Delaware Property Management Laws & Landlord-Tenant Laws

Delaware's property management laws, unique to the state, govern residential property rental activities, including tenant advertising, fee charging, and lease termination. These laws can be complex, especially for non-resident landlords, but local property management firms have expertise in understanding and leveraging these regulations for optimal residential property revenue.

This guide provides key insights into Delaware's property management laws, covering lease creation, landlord expenses, and providing direct links to relevant statutes. It serves as a comprehensive resource for addressing specific property management situations in Delaware. 

Key Delaware landlord, tenant and property management laws include: 

• Landlords can collect application fees from prospective tenants, capped at $50 or 10% of the monthly rent, whichever is higher.
• Security deposits for a lease of at least one year are limited to one month's rent. There's no limit for month-to-month leases.
• Landlords have 20 days to return the security deposit upon lease termination, deducting any damages. Tenants have a 10-day window to contest any charges.
• Landlords can offer month-to-month or one-year leases. Any lease lasting a year or more must be in writing.
• Rent can be increased upon lease expiration, provided a 60-day advance notice is given. Late fees cannot exceed 5% of the monthly rent.
• Landlords are legally required to disclose the names and business addresses of property owners or their appointed resident agents.
• Landlords must maintain their properties according to all relevant housing and building codes.
• Tenants can terminate their lease early if landlords fail to address necessary repairs or meet local housing or building codes.

Delaware Rental Application Laws

In Delaware, landlords and property managers are legally permitted to collect application fees from prospective tenants, as long as these fees align with the actual costs of processing an application, including credit or background checks. However, Delaware statute §5514 (d) caps these fees at $50 or 10% of the monthly rent, whichever is higher. While there are no state restrictions on conducting credit or background checks, federal law mandates landlords to secure written consent from applicants prior to conducting these checks, as per the Fair Credit Reporting Act. Furthermore, it's important to note that tenant screening in Delaware is governed by anti-discrimination laws, which prohibit discrimination on grounds of race, creed, religion, marital status, color, sex, sexual orientation, gender identity, national origin, disability, age, income source, occupation, or presence of children. 

Delaware Security Deposit Laws

In Delaware, landlords are prohibited from collecting additional move-in fees as per statute §5310. They can only collect application fees, security deposits, pet deposits, or similar fees. The security deposit for a lease of at least one year is limited to one month's rent according to §5514. There's no specific limit for month-to-month leases, but any amount exceeding one month's rent must be returned if the tenant stays for over a year. This does not apply to furnished apartments.

Landlords must hold the security deposit in a federally insured bank account, designated as a security deposit account, as stated in §5514 (b). The funds cannot be used for property owner's business operations.

Upon lease termination, landlords have 20 days to return the security deposit, deducting any damages as per §5514 e-f. Tenants have a 10-day window to contest any charges. Landlords can withhold the security deposit for unpaid rent, re-rent expenses after early termination, or excessive property damage beyond normal wear and tear, which is defined as damage that can't be fixed by painting or cleaning.

Failure to return the security deposit within 20 days results in the tenant being entitled to double the amount withheld. If landlords don't deposit the security deposit in an appropriate bank account or disclose its location within 20 days of a tenant's written request, they forfeit the deposit and must return the money within 20 days or the tenant is entitled to double the amount, according to §5514 g.

Tenants must provide a forwarding address at lease termination. If they fail to do so, landlords must hold the funds for a year post-termination, as per §5514 h. 

Delaware Laws About Leases and Lease Termination

In Delaware, landlords are permitted to offer month-to-month or one-year leases. However, any lease lasting a year or more must be in writing and a copy provided to the tenant at no cost. If no term is specified, the lease defaults to a month-to-month agreement. In the event of a lease violation, such as non-payment of rent, landlords can issue a termination notice and, if payment is not received within five days, they may file for summary possession to evict the tenant.

Termination of a month-to-month lease requires a 60-day notice from either party, commencing on the first day of the month following the notice's delivery. There are certain circumstances where a tenant can terminate a lease without penalty. These include relocation due to a job change over 30 miles away, illness or death of a tenant or immediate family member, acceptance into a senior or group living facility, or subsidized housing, joining the military after the lease starts, or being a victim of domestic violence or other crimes.

Military members on active duty must give a 30-day notice for early termination. Similarly, victims of domestic violence can terminate their lease with a 30-day written notice without penalty. For non-emergency property alterations leading to lease termination, landlords must provide a 60-day notice unless the lease term is longer, in which case they must wait until the lease expires after notifying tenants of their intent to cancel. 

Delaware Laws About Rent and Late Fees

Landlords are permitted to increase rent upon lease expiration, provided they give a 60-day advance notice. There's no legal cap on the rent amount. A mandatory 5-day grace period is required before landlords can impose late fees, which cannot exceed 5% of the monthly rent and must be specified in the lease (§5501 d). 

Delaware Legally Required Disclosures

In Delaware, landlords are legally required to disclose the names and business addresses of property owners or their appointed resident agents. They can also designate an agent to serve and receive disclosures on their behalf. Although there are no specific state laws on mold and lead paint disclosures, federal and local regulations may apply.

Landlords must provide 48 hours’ notice before entering a rented property and tenants can deny entry for lack of proper notice or if the entry is requested outside the hours of 8 a.m. to 9 p.m.

To maintain habitability, landlords are accountable for ensuring all property systems are in good working order, common areas are clean and safe, and repairs are performed within 30 days. They are also responsible for maintaining any amenities provided, such as electrical and plumbing systems. Garbage disposal, water, hot water, and heat may also be included if specified in the lease.

While landlords are not required to supply utilities unless specified in the lease, they must provide separate meters for utilities paid by the tenant.

There is no requirement for a move-in inspection certification or to supply locks and keys. However, tenants can pay for new locks and keys if certain conditions are met.

Retaliatory actions against tenants are strictly prohibited in Delaware.

Finally, landlords are required to retain a tenant’s abandoned property for 7 days after the end of the appeal period, after which they can dispose of the property as they wish. The cost of storage can be charged to the tenant. 

Delaware Property Maintenance and Repair Laws

Landlords are legally required to maintain their properties according to all relevant housing and building codes, ensuring cleanliness and good repair of common areas, as well as the functionality of major systems like plumbing, electric, water, and heating (§5305). Should a tenant report a necessary repair, landlords have a 15-day window to complete it. Failure to do so may result in lease termination by the tenant without penalty. In cases where damage poses immediate health and safety risks, tenants can terminate leases instantly without court proceedings (§5306).

Tenants, on the other hand, must keep the property clean and sanitary, use appliances and systems appropriately, and avoid causing unnecessary damage. They must also promptly inform landlords about required repairs and allow reasonable access to maintenance professionals.

In instances where a tenant loses access to part of the rental unit due to fire or other casualty, but the unit remains habitable, landlords are obligated to lower the rent to reflect the diminished value (§5309).

While there are no specific laws regarding official inspections, tenants can terminate their lease early if landlords fail to address necessary repairs or meet local housing or building codes (§5302).

Lastly, tenants can deduct repair costs from their rent under certain conditions: if the landlord has been notified of the repair need, the repair isn't completed within 30 days, and the cost doesn't exceed $200 or half the monthly rent, whichever is less. However, this does not apply if the damage resulted from negligence or misuse by the tenant, their family members, or guests (§5307). 

Bottom Line

Delaware's property management laws provide a comprehensive framework for landlords and tenants, covering everything from lease creation and termination to rent and security deposit laws. These regulations are designed to protect both parties, ensuring a fair and transparent rental process. It's important for landlords and tenants to familiarize themselves with these laws to understand their rights and responsibilities. For landlords, especially those not residing in Delaware, local property management firms can provide valuable assistance in navigating these complex regulations.