First Month, Last Month, Fees and Other Up-Front Charges in Indiana
Before you move in you may be asked for a deposit, the first and last month’s rent and fees. Here is how Indiana’s deposit definition treats each payment and what to get in writing.
Is the first month’s rent a security deposit?
No. The definition of a security deposit includes a required prepayment of rent other than the first full rental payment period (IC 32-31-3-9(b)(1)). The first month’s rent is rent and is outside the deposit rules.
Is last month’s rent in advance a deposit?
Yes, to the extent it is prepaid rent beyond the first period: it is a security deposit, so it follows the four allowed uses and the 45-day list. The deposit can serve as the last payment period only if a written agreement between landlord and tenant says so (32-31-3-13(3)).
What about application fees and other fees?
The chapter does not address application or screening fees, and cities and counties may not regulate lease applications or any landlord fees (32-31-1-20(c)). Ask what a fee covers and whether any part is refundable; a payment returnable on condition of the unit’s condition is a deposit.
What about late fees?
The chapter sets no late fee cap, and local governments may not regulate landlord fees. Check your lease. A late fee is not a reason to evict by itself, but unpaid rent is: see the Indiana eviction notice calculator.
What happens if the building is sold?
The owner at the time the rental agreement terminates is bound by the deposit section, and a seller in a good-faith sale stays liable to the tenant for the deposit for one year after notice of the conveyance unless the buyer assumes the liability and the seller transfers the money (32-31-3-12(d), 32-31-3-19). Keep your receipt.
A pre-signing checklist
Ask for the total move-in cost in writing; ask what each line is for and which are refundable; add every payment held as security using the Indiana security deposit limit calculator; get a receipt for each payment; and photograph the unit.
How common up-front payments are treated
| Payment | Treatment | Return |
|---|---|---|
| First month’s rent | Rent | Outside the deposit rules |
| Security deposit | Held to secure obligations | Four uses; list in 45 days |
| Last month in advance | Prepaid rent beyond the first period | Counts as a deposit |
| Application fee | Not addressed; cities may not regulate it | Ask for a receipt |
Why prepaid rent is treated as a deposit
The definition reaches a required prepayment of rent other than the first full rental period, so a landlord that asks for the last month’s rent up front is holding a security deposit, not collecting rent early. It must be held for the tenant, used only for the four listed purposes and refunded under the 45-day rule unless a written agreement says it is the last payment period.
Renewals and rent increases
The deposit chapter does not say what happens to a deposit when a lease renews or the rent rises. A landlord that wants to change a month-to-month lease needs written notice, and a rent increase has its own notice rule. Ask in writing whether the deposit carries forward and whether more is wanted, and keep the answer.
Keep every receipt
Ask for a written receipt for each payment, with what it is for, and keep it with the lease so you can show later what you paid and when. If the property is sold, the receipt is how you prove the deposit to the new owner.
Where to get help
Legal aid and the county clerk can explain whether a charge is allowed. Bring the lease, every receipt and the landlord’s written request.
Frequently asked questions
Is the first month’s rent part of the deposit in Indiana?
No. It is rent.
Can a landlord ask for last month’s rent in advance?
Yes, but prepaid rent beyond the first period is a security deposit.
Is there a cap on application fees in Indiana?
The chapter sets none, and cities may not regulate landlord fees.
Is there a cap on late fees?
Not in the sections we read; the lease controls.
Who owes my deposit if the landlord sells?
The owner at termination, and the seller for a year unless the buyer assumes it.
Official sources
A local landlord-tenant attorney can review your situation — many offer a free consultation.
This is general information, not legal advice. It is based on the cited Indiana statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed Indiana attorney.