Tenant screening and landlord-tenant law in indiana

Indiana does not impose a statewide cap on tenant screening or application fees. Just as important, Indiana law bars local governments from filling that gap: under IC 32-31-1-20(c)(7), a unit of local government "may not regulate...any fees charged by a landlord" with respect to privately owned rental property unless the Indiana General Assembly specifically authorizes it, and any conflicting local ordinance is void and unenforceable. In practice, this means neither the state nor individual Indiana cities currently cap what a landlord may charge for a rental application or background check.

Indiana's Fair Housing Act, at IC 22-9.5-5-1, protects race, color, religion, sex, familial status, disability, and national origin — the same categories as the federal Fair Housing Act — and does not add arrest record or conviction record as protected categories the way Illinois does. That same section expressly states that it "does not prohibit discrimination against a person because the person has been convicted...of the illegal manufacture or distribution of a controlled substance," which is a specific, Indiana-codified carve-out consistent with the federal Fair Housing Act's own drug-conviction exception. Confirm any local restriction on criminal-history screening in an Indiana city against current municipal code and applicable state authorization before finalizing a screening policy.

No. Source of income (including use of a housing voucher) is not listed among Indiana's Fair Housing Act protected characteristics in IC 22-9.5-5-1. Indiana law also separately blocks local governments from creating their own source-of-income protections for privately owned rental property without state authorization (see the local-preemption discussion below), so this is a thinner protection area in Indiana than in states like Illinois that have added source of income at the state level.

Indiana has not enacted a state-specific adverse-action notice requirement for tenant screening. Federal FCRA §615 baseline rules — notice when a report contributes to an adverse decision, identification of the reporting agency, and the applicant's dispute rights — generally apply as the operative framework.

Indiana does not cap the dollar amount of a security deposit at the state level. Under IC 32-31-3-12 and IC 32-31-3-14, a landlord generally must, within 45 days of lease termination and delivery of possession, mail or deliver a written itemized list of damages and any deductions — which may include unpaid rent, damage from noncompliance with the law or lease, and unpaid utility/sewer charges the tenant owed — along with a check or money order for the remaining balance. If a tenant does not supply the landlord with a mailing address, the landlord is not liable under this section until one is provided. A landlord who fails to comply can be liable for the entire deposit plus reasonable attorney's fees. Indiana has no statutory requirement to pay interest on security deposits.

Indiana bars local rent control statewide. IC 32-31-1-20(b) provides that a local unit of government "may not regulate rental rates for privately owned real property, through a zoning ordinance or otherwise, unless the regulation is authorized by an act of the general assembly." There is a narrower carve-out in subsection (a) for privately owned property receiving government funds or benefits specifically to provide reduced rents to low- or moderate-income tenants, which is treated differently from market-rate rent regulation. Indiana does not have a statewide just-cause eviction requirement for private market-rate housing.

Indiana is unusual in that state law affirmatively forecloses most of what a city could otherwise add. IC 32-31-1-20(c) bars any Indiana local government from regulating — without specific state authorization — a landlord's tenant-screening process, security deposits, lease applications, leasing terms and conditions, required disclosures, the rights of the parties to a lease, or any landlord-charged fees; any conflicting local ordinance "is void and unenforceable." Based on this state law, we would generally expect major Indiana cities such as Indianapolis, Fort Wayne, Bloomington, and South Bend not to have their own enforceable tenant-screening, source-of-income, or application-fee ordinances layered on top of state law, though landlords should still check current local code for each city given that this is based on the preemption statute rather than a city-by-city ordinance review.

Indiana counties are, like cities, subject to the same IC 32-31-1-20 preemption for landlord-tenant matters, so a county would generally face the same limits a city does. Indiana does maintain townships as an actual, separate unit of local government (providing services such as township assistance/poor relief and, in many areas, fire protection) — unlike some states where "township" is not a meaningful local-government category — but townships are not bodies that legislate landlord-tenant or tenant-screening rules in Indiana.

Can an Indiana city cap tenant screening fees or restrict criminal history screening on its own? Generally no. State law (IC 32-31-1-20(c)) bars Indiana local governments from regulating a landlord's screening process or fees without specific authorization from the state legislature, and any local ordinance that conflicts is void.

Is source of income a protected class in Indiana? No. Indiana's Fair Housing Act protects race, color, religion, sex, familial status, disability, and national origin, but does not include source of income, and local governments are separately barred from adding that protection on their own for private rentals.

Does Indiana have rent control? No. State law bars local rent control statewide, with a narrow carve-out for subsidized/income-restricted housing programs rather than market-rate rentals generally.

How long does an Indiana landlord have to return a security deposit? Generally 45 days from lease termination and delivery of possession, with a written itemized list of any deductions, under IC 32-31-3-12 and IC 32-31-3-14.

Checkr can help Indiana landlords set up an FCRA-aligned screening workflow that fits Indiana's largely state-controlled landlord-tenant framework. Get started at tenant.checkr.com/signup to begin screening for your Indiana rental properties.

The resources and information provided here are for educational and informational purposes only and do not constitute legal advice. Always consult your own counsel for up-to-date legal advice and guidance related to your practices, needs, and compliance with applicable laws.