How to Hold and Return a Security Deposit in Alabama

Here are the steps you will need to follow to correctly manage a security deposit in Alabama.

Capped at one month of rent in Alabama

You can't charge a security deposit in Alabama that exceeds more than one month's rent, so you will need to choose a number for the deposit that is under this amount.

Storage

Alabama offers no state legal guidance on how or where you must store a security deposit. Many people opt to store the security deposit in a bank account separate from their personal finances, but you aren't required to escrow it.

Inspections

You're not required by law to provide an inspection list, but if you record the state of the unit before the lease begins it will be easier to document any claims you might end up making on the deposit later on.

Carefully document claims made on the deposit

You must provide an itemized list of any deductions you take from the security deposit and send it by mail to your subtenant's last known address within sixty days of the end of the sublease.

Returning the deposit

Security deposits need to be returned within sixty days of the end of the rental in Alabama. You can use the security deposit to cover any unpaid rent at the end of the lease or to cover the cost of any damages to the unit that exceed normal wear and tear.

If the deposit goes unclaimed for ninety days, your subtenant forfeits their right to receive it. If you fail to return any or all of the security deposit in this manner, the subtenant has the right to claim up to twice the amount of the security deposit, so follow these instructions exactly.