Landlord and Tenant Rights and Responsibilities Article

Security Deposits

What is a security deposit?

A security deposit is a sum of money that a landlord is permitted to charge a tenant at the beginning of a lease or rental agreement in order to ensure that if the tenant causes any damage to the rental unit beyond ordinary wear and tear or moves out without first paying all of the rent that the tenant owes, the landlord will have the money to cover those losses.

Why is it important to document the condition of a rental unit before moving in/out?

Given that one of the major purposes of a security deposit is to ensure that a landlord has the money to cover the cost to repair any damage to the rental unit caused by a tenant, it is strongly recommended that both the tenant and the landlord TAKE PHOTOS AND/OR VIDEO of the rental unit showing its condition both before the tenant moves in and just after the tenant moves out. A tenant who is vacating a rental unit may also wish to have a friend drop by to witness the condition of the unit first-hand.

How much may a security deposit be?

Under Arizona law, a landlord may ask for a security deposit up to an amount that is equal to 1 + ½ month’s rent (A.R.S. §33-1321(A)). A landlord may not ask for more than this. (So, for example, if the monthly rent is $1,000, then the most that the landlord may charge as a security deposit is $1,500, which is one month’s rent ($1,000) plus one-half of one month’s rent ($500).)

May a landlord charge a tenant more than this amount?

As long as it is stated explicitly in the rental agreement, a landlord may ask a tenant to “voluntarily” pay advance rent in any amount (for example, first and last month’s rent) before the tenant moves into the rental unit.

May part of a deposit (or fee) be non-refundable?

If any amount of a deposit or fee is intended by a landlord to be non-refundable at the end of a lease, this must be stated explicitly in the rental agreement, which must also include an explanation of the purpose of the non-refundable deposit or fee (A.R.S. §33-1321(B)). Any part of a deposit or fee that is not specifically designated as non-refundable is considered refundable.
 
What documents is a landlord required to give a new tenant at move-in?

When a new tenant moves into a rental unit, the landlord must give the tenant:

1. a signed copy of the lease or rental agreement
2. a move-in form on which the tenant can record any damage to the unit that already exists; and
3. written notification that the tenant may be present at a move-out inspection (A.R.S. §33-1321(C).

What may be deducted from a security deposit?

At the conclusion of the rental agreement, the landlord may deduct from the security deposit:

(a) any unpaid rent that the tenant still owes (subject to the landlord’s duty to mitigate future losses)

(b) the cost required to repair any damage caused to rental unit by the tenant beyond ordinary wear and tear

(c) other expenses incurred by the landlord due to the tenant’s failure to fulfill the tenant’s obligations (for example, the cost of removing from the rental unit and disposing of personal items left behind by the tenant), and/or

(d) any other charges that the rental agreement specifically allows the landlord to collect from the tenant (A.R.S. §33-1321(D)).

After the landlord has deducted these amounts (if any), the landlord must return all remaining money from the security deposit to the tenant.

How does a tenant recover a security deposit after moving out?

A tenant who intends to vacate a rental unit should either hand deliver or send by registered or certified mail a letter to the landlord providing written notice of the date on which the tenant plans to move out and also requesting a move-out inspection date so that the tenant may be present. At the end of this article there is a link to a “Notice of Intent to Vacate and Request for Move-Out Inspection Date” form that the tenant may use. The tenant should make and keep a copy of this letter.

When the tenant moves out (or a couple of days beforehand), the tenant should also either hand deliver or send by registered or certified mail a letter to the landlord requesting the return of the tenant’s security deposit and providing the tenant’s new address. At the end of this article there is a link to a “Request for Return of Security Deposit” form that the tenant may use. The tenant should make and keep a copy of this letter as well.

Within 14 days (excluding weekends and holidays) after the tenant has moved out and the landlord has received the tenant’s Request for Return of Security Deposit, the landlord must provide the tenant with an itemized list of all the charges (if any) that the landlord intends to deduct from the security deposit as well as the balance of the security deposit itself (A.R.S. §33-1321(D)). This list of deductions and any amount due must be sent by the landlord to the address identified in the tenant’s written request or to the tenant’s last known residence if no forwarding address was supplied.

Attached Document
 Security Deposits