What does Arizona security deposit law say? Under A.R.S. 33-1321, a residential landlord can't collect security, including prepaid rent, of more than one and one-half month's rent. After move-out, the landlord has 14 days, excluding weekends and legal holidays, to send an itemized list of deductions and any refund, once the tenant has moved out and asked for it.
What if the landlord doesn't follow the rules? The tenant can recover what's owed plus twice the amount wrongfully withheld. For anyone renting out a Scottsdale or Phoenix home, these rules are worth knowing before the first lease is signed.
Data note: Rules come from the Arizona Residential Landlord and Tenant Act, A.R.S. 33-1321 (security deposits) and 33-1341 (tenant duties), and small claims limits from A.R.S. 22-503. Examples are illustrative math, not market data.
Arizona Security Deposit Rules at a Glance
- Maximum: 1.5 months' rent, counting prepaid rent
- Nonrefundable fees: allowed if their purpose is stated in writing
- Anything not labeled nonrefundable: refundable
- Refund deadline: 14 business days after move-out, possession and the tenant's demand
- Delivery: first-class mail to the last known address, unless agreed otherwise in writing
- Penalty: twice the amount wrongfully withheld, plus the money due
- Dispute window: 60 days after the list is mailed
What Landlords Can Collect
The Cap
Security, "however denominated," can't top one and one-half month's rent. On a home renting for $3,000 a month, that's a maximum of $4,500 in security and prepaid rent combined. A tenant may still choose to pay rent further ahead.
Nonrefundable Fees
A fee or deposit can be nonrefundable, but only if the landlord states their purpose in writing. If the lease doesn't designate a fee as nonrefundable, the law treats it as refundable.
Move-In Paperwork
At move-in, the landlord must give the tenant:
- A signed copy of the lease
- A move-in form to note existing damage
- Written notice that the tenant may attend the move-out inspection
What Landlords Can Deduct
At the end of the lease, the deposit can be applied to unpaid rent and charges specified in the signed lease, subject to the landlord's duty to mitigate, plus damages from the tenant's failure to meet their duties under A.R.S. 33-1341. Those duties include keeping the home clean and safe, using appliances and systems reasonably, and not deliberately or negligently damaging the property.
A thorough move-in form with photos is the landlord's and the tenant's best evidence later.
The 14-Day Refund Rule, Step by Step
- The tenancy ends and the tenant returns possession
- The tenant demands the deposit's return
- Within 14 days, not counting Saturdays, Sundays or legal holidays, the landlord sends an itemized list and any refund
- The tenant has 60 days from mailing to dispute; after that, the list is final
Tips for Tenants
- Fill out the move-in form carefully and keep a copy with dated photos
- Ask to attend the move-out inspection; the law says you may be present
- Make your demand in writing and give a forwarding address
- Dispute deductions within 60 days of the list being mailed
If the landlord misses these rules, the tenant may recover the money due plus damages equal to twice the amount wrongfully withheld. Disputes of up to $5,000 can go to the small claims division of justice court.
Buying or Selling a Home With a Tenant
The law binds whoever holds the landlord's interest when the tenancy ends. If you buy a tenant-occupied home, you could owe a deposit you never received, so make sure deposits transfer through escrow at closing.
“When a client decides to keep their Scottsdale home as a rental, the deposit rules are one of the first things we cover. Clear nonrefundable fees, a detailed move-in form with photos and a calendar reminder for the 14-day deadline prevent most disputes. And if you're buying a home with a tenant in place, the deposits need to follow the keys.”
— Elizabeth Vijan, Tackett Team, eXp Realty
Weighing a rental? Read should I sell or rent my house in Arizona and our Scottsdale short-term rental rules.
Frequently Asked Questions
What is the maximum security deposit in Arizona?
1.5 months' rent, including prepaid rent.
How long does a landlord have to return a security deposit in Arizona?
14 days, excluding weekends and holidays, after move-out and the tenant's demand.
What happens if a landlord doesn't return a security deposit in Arizona?
The tenant can recover it plus twice the amount wrongfully withheld.
Are nonrefundable fees allowed in Arizona?
Yes, if their purpose is stated in writing.
Thinking About Renting Out Your Home, or Buying One With a Tenant?
I'll help you run the numbers on selling versus renting, and make sure deposits and leases are handled at closing.
Elizabeth Vijan | Tackett Team, eXp Realty
Scottsdale & Phoenix Real Estate
Let's Talk · Call or text 602-885-7752
Sources: A.R.S. 33-1321: Security Deposits · A.R.S. 33-1341: Tenant to Maintain Dwelling Unit · A.R.S. 22-503: Small Claims Jurisdiction
Disclaimer: General information, not legal advice. Talk to a real estate attorney about a specific lease or dispute. Information deemed reliable but not guaranteed. Equal Housing Opportunity.
Tackett Team, eXp Realty · Get in touch