Property Management Laws And Regulations In Indiana

Updated August 5, 2026

10 min read

Indiana regulates third-party property management through several authorities at once, and the rules that matter most to a management company are the ones covering your license, your client trust accounts, and the money you hold on behalf of owners and tenants. This guide covers those rules for professional managers, with the statute or agency regulation behind each one.

Everything below is sourced to Indiana's own statutes, agency rules, and court materials rather than to secondhand summaries. Specific dollar amounts and deadlines do change; the citations do not, so you can always open the authority and confirm the current text before you act on it.

Licensing Requirements For Property Managers

Performing property management for a fee on behalf of another owner (leasing, renting, collecting rent, or otherwise managing real estate for others) is treated as licensed real estate brokerage activity in Indiana, regulated by the Indiana Real Estate Commission under the Indiana Professional Licensing Agency (PLA). The governing law is IC 25-34.1, the Real Estate Brokers and Salespersons Licensing Act, supplemented by the Commission's administrative rules at 876 IAC. Every broker company must have a managing broker who supervises its licensees and is held responsible for the company's licensed activity.

Real estate brokerage activity subject to licensure in Indiana includes managing, leasing, or renting real estate for another person for compensation; a person performing these acts must hold a broker's license under this article. (IC 25-34.1-3-4.1)
It is unlawful to engage in the activities of a real estate broker in Indiana without a license issued under this article, subject to the exemptions set out in this chapter. (IC 25-34.1-3-2)
The Indiana Real Estate Commission is created and vested with authority to license and regulate real estate brokers and broker companies, and it operates within the Indiana Professional Licensing Agency. (IC 25-34.1-2-1)
Each broker company must designate a managing (principal) broker responsible for supervising the licensees affiliated with the company, and that managing broker generally must be an Indiana resident, with a narrow exception if none of the company's affiliated licensees reside in Indiana. (IC 25-34.1-4)
The Commission's rules governing the day-to-day operation of broker companies, including supervision and advertising standards, are codified at 876 IAC 8. (876 IAC 8)

Client Trust Account Rules

Indiana Real Estate Commission rules at 876 IAC 8 require every broker company that collects money belonging to others, which includes rent and other property management funds, to hold it in a dedicated trust/escrow account at a federally insured institution. Commingling with personal or operating funds is prohibited, per-beneficiary recordkeeping is required, the account must be open to Commission and Attorney General review, and the Commission holds the responsible broker personally accountable for the money.

A broker company that engages in activities involving the collection of money in the course of its licensed activity must establish an escrow/trust account with a federally insured financial institution. (876 IAC 8)
Broker companies must keep, in one or more trust accounts, all funds belonging to others, including earnest money deposits, funds held for closing escrows, undisbursed sale proceeds, and other funds belonging to others, which for a management company includes owner and tenant funds. (876 IAC 8)
A broker company may not use a trust account for the deposit of personal funds or other business funds, which prohibits commingling company or personal money with client trust money. (876 IAC 8)
Broker companies must keep a detailed record of the funds, and any interest accrued, in each trust account, identifying the amount of funds held for each beneficiary. (876 IAC 8)
A broker company must provide a detailed summary of its escrow/trust account upon request of an authorized representative of the Commission or the Office of the Attorney General for investigative purposes. (876 IAC 8)
The Commission holds the broker with whom client money is deposited personally responsible for that money, placing ultimate liability for trust funds on the managing or responsible broker, not only the company. (876 IAC 8; IC 25-34.1-4)

Trust account rules are where Indiana management companies get into trouble fastest, because a shortage is a licensing problem and not just a bookkeeping problem. The habits that keep you clean are the boring ones: deposit on time, never let operating money and client money mix, reconcile every account every month, and keep a per, property record you could hand to an auditor without preparing it first. Our guide to preparing for a trust account audit walks through what examiners actually ask for.

Security Deposit Rules

Indiana does not statutorily cap the amount a landlord may charge as a security deposit. IC 32-31-3 governs handling at move-out: within 45 days of lease termination and delivery of possession, the landlord must send the tenant a written, itemized list of any damage deductions and the deposit balance, and failure to do so forfeits the landlord's right to withhold anything from the deposit.

A security deposit is defined as a deposit of money paid by a tenant to the landlord or the landlord's agent, to be held for all or part of the lease term to secure performance of the tenant's obligations under the rental agreement. (IC 32-31-3-9)
Upon termination of a rental agreement, the landlord must return the security deposit minus any amount applied to damages or unpaid utility or sewer charges, itemized in a written notice delivered to the tenant not more than 45 days after termination of the rental agreement and delivery of possession. (IC 32-31-3-12)
The landlord is not liable under the security deposit chapter until the tenant has supplied the landlord, in writing, with a mailing address to which the itemized notice and any deposit balance should be sent. (IC 32-31-3-12)
A landlord's failure to timely provide the itemized damage notice is treated as the landlord's agreement that no damages are due, requiring the full deposit to be returned, and a tenant may recover the deposit wrongfully withheld plus reasonable attorney's fees. (IC 32-31-3-12)

Lease Agreements And Required Disclosures

Indiana's landlord-tenant statutes (IC 32-31) do not set out a broad, itemized list of mandatory lease disclosures comparable to some other states. Verified disclosure-type obligations found in official sources are tied to specific events, such as the tenant furnishing a forwarding address for security deposit purposes, rather than a general lease disclosure statute.

Indiana's landlord-tenant relations article does not require a residential rental agreement to be in writing, and obligations such as the 45-day itemized deposit notice apply regardless of whether the tenancy arose from a written or oral agreement. (IC 32-31-1; IC 32-31-3-12)

Entry Notice And Tenant Privacy

Indiana law requires landlords to give tenants reasonable notice before entering an occupied dwelling and to enter only at reasonable times, with an exception for emergencies. Landlords are barred from using the right of entry to harass tenants or interfere with a tenant's possession or access to essential services.

A landlord may enter a tenant's dwelling unit only at reasonable times and, except in an emergency, after giving the tenant reasonable notice of the landlord's intent to enter. (IC 32-31-5-6)
A landlord may not abuse the right of entry or use a right of entry to harass a tenant, and may not interfere with a tenant's access, possession, or essential services. (IC 32-31-5-6)

Rent, Late Fees, And Other Charges

Indiana has no statewide rent control, and state law affirmatively preempts local governments from regulating rental rates on privately owned residential property, so a management company operating anywhere in Indiana does not need to track municipal rent-control ordinances. No statutory cap on late fees was located in official sources.

A political subdivision (unit of local government) may not regulate the rental rate for privately owned residential rental property through a zoning ordinance or otherwise, unless the regulation is authorized by an act of the Indiana General Assembly, which effectively preempts local rent control. (IC 32-31-1-20)
The rent-control preemption does not apply to privately owned rental property for which government funds or benefits have been allocated by the federal government, the state, or a political subdivision for the express purpose of providing reduced rents to low- or moderate-income tenants. (IC 32-31-1-20)

Fee income is also taxable income, and how you record management fees, late fees, and pass, through charges affects both your compliance position and your books. See our guide to Indiana property management taxes for the reporting side.

Fair Housing Obligations

The Indiana Civil Rights Commission (ICRC) is the state agency that investigates and enforces housing discrimination complaints under the Indiana Fair Housing Act. Indiana's protected classes largely mirror the federal Fair Housing Act but add ancestry as a separate protected class in housing.

The Indiana Civil Rights Commission enforces the Indiana Fair Housing Act (IC 22-9.5), which is intended to provide rights and remedies substantially equivalent to the federal Fair Housing Act and creates a procedure for investigating and settling housing discrimination complaints. (IC 22-9.5)
Indiana's protected classes in housing are race, color, national origin, ancestry, religion, sex, disability, and familial status, which adds ancestry as a protected class beyond those enumerated in the federal Fair Housing Act. (IC 22-9.5-5)

Habitability And Safety Duties

Indiana law requires landlords to deliver and maintain rental premises in a safe, clean, and habitable condition, comply with applicable housing and building codes, and keep essential systems in working order, and this duty cannot be waived by lease terms. A separate statute bars landlords from retaliating against tenants who exercise their rights, such as by complaining about code violations.

A landlord must deliver the rental premises in a safe, clean, and habitable condition, comply with all health and housing codes, keep common areas reasonably safe and clean, and provide and maintain the electrical, plumbing, sanitary, and heating, ventilating, and air conditioning systems. (IC 32-31-8-5)
A landlord may not increase rent, decrease services, or bring or threaten to bring an eviction action in retaliation for a tenant's protected activity, such as complaining in good faith to a governmental entity or to the landlord about a building, housing, or health code violation, or bringing a legal action against the landlord. (IC 32-31-8.5-5)
A tenant who prevails on a retaliation claim under this chapter may recover actual and consequential damages, attorney's fees, court costs, and injunctive relief. (IC 32-31-8.5)

Eviction Basics

For nonpayment of rent, Indiana law requires a landlord to give the tenant at least 10 days' written notice to pay or vacate before the tenancy can be terminated on that ground, and if the tenant pays all rent due within that period, the tenancy continues.

For nonpayment of rent, a landlord may terminate the lease by giving the tenant not less than 10 days' written notice to vacate, unless the tenant pays the rent due within that 10-day period. (IC 32-31-1-6)
The statute prescribes the required form of the 10-day pay-or-vacate notice, and if the tenant cannot be found, permits the notice to be served on a resident of the premises or affixed to a conspicuous part of the property. (IC 32-31-1-7)

Staying Compliant Without Guessing

Most Indiana compliance failures are not decisions, they are drift: a deposit that sat too long, a reconciliation that got skipped in a busy month, a lease template that never got updated after a statute changed. Build the calendar first. Monthly trust reconciliations, an annual review of your lease and disclosure packet against current statutes, and a documented process for deposits and refunds cover the large majority of what an examiner will ask about.

This guide is a starting point for professional managers, not legal advice. For a specific dispute, a novel fact pattern, or anything with real money at stake, work with a Indiana attorney, and confirm the current text of any statute cited above with Indiana Real Estate Commission (within the Indiana Professional Licensing Agency) or the Indiana legislature.