Overview
Alabama security deposit laws are governed by Alabama Code § 35-9A-201, part of the Uniform Residential Landlord and Tenant Act. Alabama has relatively landlord-friendly laws with moderate deposit limits and provides double damages penalties for wrongful withholding. Using a security deposit compliance platform can help landlords stay on top of these requirements.
Maximum Security Deposit
Alabama sets security deposit limits based on whether the unit is furnished:
- Unfurnished units: Maximum of 1 month's rent
- Furnished units: Maximum of 1.5 months' rent
Additional Deposits
Alabama law allows landlords to collect extra security deposits when:
- A tenant owns a pet
- The tenant requests changes to the unit
- There are higher liability risks
Return Timeline
Alabama landlords must return the security deposit within 60 days after the tenant vacates the unit and hands over possession.
- Must provide a written, itemized list of any deductions
- The itemization must explain exactly what the deductions cover
- Return must be sent to the forwarding address provided by the tenant
Forwarding Address
The tenant should provide a forwarding address in writing. Without this, the landlord may have difficulty returning the deposit, though they remain obligated to do so. (Georgia has similar deposit rules—see Georgia security deposit laws.)
Interest Requirements
Alabama does not require landlords to pay interest on security deposits or hold them in interest-bearing accounts.
Storage Requirements
Alabama law does not mandate specific storage requirements for security deposits. Landlords are not required to:
- Hold deposits in a separate account
- Use an interest-bearing account
- Disclose where the deposit is being held
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Outstanding utility charges owed by the tenant
- Other amounts permitted under the lease
Normal wear and tear cannot be charged to the tenant. The landlord must document damages with an itemized list.
Penalties for Non-Compliance
If a landlord fails to return the security deposit or provide the required itemized list within 60 days:
- The landlord must pay the tenant double the amount of the original deposit
- Without proper documentation, the landlord may not legally retain any portion of the deposit
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. To see how automated documentation works, schedule a demo of Passive.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.