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Landlord Security Deposits

Posted by attorney Aaron Kelly

Landlord Security Deposits

Landlord security deposit obligations

In Arizona, the maximum security deposit that a landlord can collect cannot be more than one and one-half months rent. Some landlords, however, fail to follow this law which is found in A.R.S. 33-1321. This mistake can be costly to the landlord, as the tenant could file a lawsuit and collect the amount of the deposit plus twice that amount as punishment for failing to comply with the landlord tenant law.

Why landlord security deposits are important

Landlords collect security deposits to ensure that the tenants are upholding their end of the bargain by paying rent, and also to ensure that if there is damage to the unit that the landlord can be compensated.

Once the tenant leaves, the landlord has fourteen (14) business days to send the tenant either the deposit, or letter to the tenant explaining what damages were found and how much of the security deposit is being held. At this point, a smart tenant would have already consulted with an experienced landlord tenant lawyer to draft a letter to the landlord, which could look like this:

Dear____:My lease for___ends on _______________. When the lease started, I paid you $_______ as a security deposit. I request that a full refund of the security deposit be mailed to the following address: _____________________________ ___________________________________________. I would appreciate receiving my Security Deposit back within the next two weeks, pursuant to A.R.S. 33-1321(d). If any portion of the security deposit is not returned, please send a written explanation detailing your reasons.Thank you again for your help, Best regards

Although this letter may not be appropriate for all situations, it is a good start. However, the tenant does not even have to send this letter to the landlord to start the clock, but once a landlord receives this letter they should immediately act upon it. Also, the landlord should take special care to document all damages that are in the unit the day the tenant took possession of the premises, and give a copy of that to the tenant.

What about nonrefundable fees?

Some landlords also require a nonrefundable fee. In order to do so, a nonrefundable fee must be stated in writing, and the landlord must also provide a copy to the tenant. Landlords should be careful not to call a "nonrefundable fee" a deposit, as it may be confusing to the tenant.

If the landlord has not disclosed the nonrefundable fees in writing, and then fails to return that fee to the tenant, then the tenant can sue the landlord for that fee together with damages in an amount equal to twice the amount wrongfully withheld.

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