Arizona landlords have a right to require a security deposit from their tenants to help protect them for losses resulting from tenant negligence, intentional conduct, or failure to fulfill an obligation stated in the lease agreement.  Here is an overview of the security deposit laws in Arizona. 

Legal Limit on Maximum Amount of Security Deposit

Arizona security deposit laws limit the amount landlords can ask from their renters as a security deposit. Specifically, as a landlord, you must charge a tenant no more than 1.5 times one month’s rent as a security deposit.

Permissible Uses of Security Deposit

Acceptable deductions from the security deposit include unpaid rent, utilities, and late fees, charges outlined in the lease, and repair of damage resulting from tenant’s negligence or noncompliance with the rental contract or law. 

This latter category must be distinguished from damage caused by normal wear and tear, i.e., damage that is expected when a rental unit is used in a normal way.  For example, slightly worn carpets and faded walls constitute normal wear and tear.  Damage resulting from abusive or negligent use of a rental unit, like ripped carpets and heavily stained walls, are examples of costs recoverable as damages that can be deducted from the security deposit.   

Non-Refundable Deposits

Non-refundable security deposits are allowed in Arizona. Per Arizona law, the only requirement is that a landlord put the agreement in writing. If the landlord fails to do so, then by default, all the renter’s security deposit will be considered refundable at the end of the lease agreement term. In addition to the writing requirement, Arizona landlords must also state the purpose of the nonrefundable fees and security deposits.

Security Deposit Returns

Landlords in Arizona must return non-refundable security deposits to the tenant’s last known address by first-class mail.  The mailing must include a written statement of deductions (if any) to the security deposit. Arizona landlords have 14 business days to return any unused portion of the security deposit. The 14-day period begins once all three of these events have occurred: (1) the tenancy terminates, (2) the tenant requests the security deposit, and (3) the tenant vacates the rental unit.

The tenant must dispute the claimed deductions within 60 days after the written statement of deductions was mailed.  Failure to do so operates as a waiver of the tenant’s right to contest the deduction(s).

Security Deposit Disputes

In Arizona a landlord’s violation of these rules supports a claim for 3x the amount wrongfully withheld under Arizona law.  The tenant can file a dispute in the small claims division of Justice Court if the amount of damages is less than $3,500.  If the amount is greater, the tenant must file a civil case in Justice Court.

If you are an Arizona landlord and have questions regarding the above, please contact Lynx Legal at 888-441-2355 or [email protected].  You may also schedule a telephonic consultation on our website to discuss your specific eviction issues and/or start your case.  Our experienced professionals are standing by to assist in any way we can.