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Security Deposit Laws in Arizona

Deposits are capped at one-and-a-half months’ rent, and landlords must refund the tenant within 14 days of the end of a lease.

Perhaps surprisingly, security deposit laws in Arizona are fairly tenant-friendly. Deposits are capped and must be returned (minus any deductions) within two weeks. What’s more, landlords can’t just guess how much it will cost to repair damages to an apartment and deduct that number from the deposit—they should get an actual estimate from a contractor.

Deposits are capped at one-and-a-half times the monthly rent

By default, security deposits in Arizona are capped at one-and-a-half times the monthly rent. However, tenants are free to put down a bigger security deposit if they want to.1

Why would anyone want to pay a higher deposit? Because Arizona law also allows landlords and tenants to agree, in a lease, that a security deposit can be used for certain expenses. For example, if a landlord pays the electric bill directly, that charge may get tacked onto a monthly rent bill. A tenant and a landlord can decide that the tenant will pay a security deposit of more than one-and-a-half times the monthly rent, but the additional amounts will be applied directly to the electric bill during the tenancy. This way, the tenant doesn't have to write out a new check every month.

Landlords can store security deposits wherever they please

There are no legal requirements as to how a landlord must store a security deposit in Arizona. The deposit doesn’t have to generate interest. Even if it does, a landlord is not required to give any of the interest to the tenant. If a landlord wants to keep a deposit inside their mattress, they’re free to do so—as long as they are able to give it back to a tenant at the end of the lease.1

Landlords must return deposits within 14 days with a list of deductions

When the lease ends, a landlord has 14 days to mail a tenant’s deposit to the tenant’s last known address. If they withheld any of the money, they must also provide an itemized list that explains the reason for each deduction. If a landlord fails to provide this list (or the remaining deposit) within 14 days, they forfeit their right to keep any of the deposit. They are additionally liable to pay the tenant double the amount of the deposit, on top of repaying the initial deposit.1

Landlords can only deduct for certain things

Arizona landlords can withhold some or all of a tenant’s security deposit for the following reasons:2

  • Any charges laid out in the lease (which could include unpaid rent)
  • Cleaning of the unit
  • Fixing and cleaning plumbing fixtures
  • Fixing any parts of a property intentionally or negligently destroyed or damaged by a tenant

What counts as “destroyed or damaged”? Unfortunately, Arizona law does not provide much clarity on that point. Unlike other states, there is no law that explicitly prohibits charging for normal wear and tear. That said, landlords can be subject to severe penalties if they withhold funds wrongly, as detailed below—so there is an incentive for landlords to play nice.

A tenant has 60 days to challenge any withheld deposit funds

If a tenant feels that their security deposit has been wrongly withheld, they have 60 days from receiving the remaining deposit and itemized list to sue the landlord. If the tenant fails to act within 60 days, they lose their right to sue.1

Landlords should justify any withheld funds

A landlord should not provide guesswork “estimates” of how much it will cost to fix any damages. Arizona courts have held that there needs to be some good faith basis to any withheld funds—so, for example, a landlord should receive actual estimates from contractors. If a tenant sues the landlord, and the landlord cannot show any reasoning behind their deductions, that landlord may be liable to return the full deposit, plus damages amounting to double the deposit.3

These laws still apply if a landlord sells their property

If a landlord sells their property, or if (in a very specific and unusual circumstance) they sell their right to profit from the lease to a third party, the new owner or third party is also expected to follow all of these rules.1

Next steps

Make sure your lease doesn’t include any unenforceable terms—and that both landlord and tenant understand their responsibilities under the rental agreement.

[1] ARS § 33-1321

[2] ARS § 33-1341

[3] Gangadean v. Byrne, 491 P.2d 501 (Ariz. Ct. App. 1971)

The information provided on this website does not, and is not intended to, constitute legal advice.