Montana Security Deposit Refund Law 2025: E-Payments Allowed

This bill modernized how a Montana landlord can physically send a deposit refund; it didn't touch how quickly that refund has to happen. Those are two separate questions, and it's easy to conflate them given how closely they're tied together in the same statute.

[Cite: Montana Code Annotated, section 70-25-202, as amended by Chapter 656, Laws of Montana 2025]

A landlord who reads this update and assumes the deadlines also loosened is working from an incomplete picture.

A landlord may refund a security deposit through electronic funds transfer, cash, check, or other forms of refund.

[Cite: Montana Code Annotated, section 70-25-202]

That's a meaningfully broader list than what existed before this amendment, when electronic transfer wasn't a method the statute recognized at all.

Before this change, a landlord's refund options were effectively limited to physical payment methods, mailed to the tenant's forwarding address or last-known address if none was provided.

[Cite: Citizen Portal, "Committee hears bill to allow electronic notices and deposit returns for Montana renters"]

That created a genuine friction point when a tenant moved without leaving a forwarding address, or moved to an address where mail delivery was unreliable; a mailed check in that situation could bounce back undelivered with no faster alternative available.

The Montana Association of Realtors described the bill as a straightforward fix that speeds deposit return specifically when tenants lack a forwarding address, and the Montana Landlord Association generally supported allowing electronic transfers as well.

[Cite: Citizen Portal, "Committee hears bill to allow electronic notices and deposit returns for Montana renters"]

That kind of alignment between landlord-side and tenant-facing advocacy groups suggests this was a genuinely uncontroversial modernization, rather than a change that shifted the underlying balance of landlord and tenant obligations.

When there's no damage to the premises, no cleaning required, and no unpaid rent, and the tenant can demonstrate no unpaid utilities, the landlord must return the deposit within 10 days.

[Cite: Montana Code Annotated, section 70-25-202]

That four-part condition, no damage, no cleaning, no unpaid rent, and no unpaid utilities as demonstrated by the tenant, hasn't been loosened or changed by this amendment. It's the same standard that applied before, just now paired with a broader set of payment method options.

The 10-day rule specifically requires that the tenant can demonstrate no utilities are unpaid, not simply that the landlord assumes utilities are current.

[Cite: Montana Code Annotated, section 70-25-202]

A landlord evaluating whether a specific move-out qualifies for the faster 10-day timeline should look for that tenant-provided confirmation, rather than defaulting to the 10-day rule automatically whenever the unit itself is undamaged and clean.

When a landlord is taking any deduction from the deposit, whether for damage, cleaning, unpaid rent, or another authorized reason, the itemized list of damages and the refund are due within 30 days of the tenancy's termination or the unit's surrender, whichever happens first.

[Cite: Montana Code Annotated, section 70-25-202]

That 30-day window is the default timeline for the more common scenario where a landlord is withholding at least some portion of the deposit, and this amendment left that timeline untouched.

A landlord who fails to provide the departing tenant with the required written list of damage and cleaning charges within the applicable deadline forfeits all rights to withhold any portion of the security deposit.

[Cite: Montana Code Annotated, section 70-25-203]

That's a significant consequence tied to missing the paperwork deadline specifically, separate from the payment-method question this amendment addressed. A landlord who sends an electronic refund on time but skips the itemized list entirely is still exposed to this forfeiture rule.

Montana Code section 70-25-201, also touched by this bill, authorizes deductions for damage caused by the tenant, unpaid rent, late charges, unpaid utilities, penalties due under lease provisions, other money owed to the landlord, and actual cleaning expenses including a reasonable charge for the landlord's own labor.

[Cite: Montana Code Annotated, section 70-25-201]

That list of authorized deductions is substantively the same as before; the amendment to this section appears to be a conforming cross-reference tied to the payment-method changes in section 70-25-202, not a change to what a landlord can actually deduct.

Montana law still has no stated statutory timeframe for how long a landlord must hold a deposit that can't actually be delivered, whether because mail comes back undelivered or electronic transfer information isn't available for a departing tenant.

[Cite: Citizen Portal, "Committee hears bill to allow electronic notices and deposit returns for Montana renters"]

That gap was raised directly during committee testimony on this bill and wasn't resolved by it. A landlord holding an undeliverable refund is operating without a specific statutory holding-period standard to follow, and should document reasonable, ongoing efforts to actually get the funds to the tenant rather than assuming any particular holding period is automatically safe.

Nothing in this amendment eliminates a landlord's existing option to refund by mail to the tenant's forwarding address, or last-known address if no forwarding address was given.

[Cite: Montana Code Annotated, section 70-25-202]

Electronic transfer is an addition to the available methods, not a replacement for the mail-based option a landlord has relied on previously.

Since electronic transfer is now a recognized refund method, a landlord's move-out documentation has a practical reason to ask a departing tenant for electronic transfer details, alongside the traditional forwarding address request.

[Cite: Montana Code Annotated, section 70-25-202]

Collecting that information at move-out, before the tenant is gone and harder to reach, is a more reliable way to actually use this new option than trying to request it after the fact.

The same legislation also addressed allowing electronic mail for landlord-tenant notices more broadly, reflecting a general legislative push to update Montana's landlord-tenant communication methods for how landlords and tenants actually communicate today.

[Cite: Citizen Portal, "Committee hears bill to allow electronic notices and deposit returns for Montana renters"]

That broader context is useful for a landlord reviewing communication practices generally, though the specific deposit-refund provisions discussed here are the focus of this article.

The practical starting point is updating move-out procedures to collect electronic transfer information from departing tenants upfront, alongside a forwarding address, so the new refund option is actually usable rather than theoretical.

For any refund scenario, confirming whether the no-deduction 10-day timeline or the deduction-based 30-day timeline applies, and ensuring the required itemized damage list goes out on time regardless of which payment method is used, closes the compliance gap that actually carries consequences under this statute.