Overview
Arizona security deposit laws are governed by A.R.S. § 33-1321. Arizona stands out for having one of the shortest return deadlines in the country at just 14 business days. The law clearly defines deposit limits, required documentation, and tenant rights. With such a tight deadline, using Passive's deposit management platform helps ensure timely returns.
Maximum Security Deposit
Under A.R.S. § 33-1321, landlords may not demand or receive security (including prepaid rent) in an amount exceeding one and one-half month's rent.
Voluntary Prepayment
This limit does not prohibit a tenant from voluntarily paying more than one and one-half month's rent in advance—but landlords cannot demand it.
Nonrefundable Fees
Arizona allows landlords to charge nonrefundable fees, but the purpose of all nonrefundable fees or deposits must be stated in writing by the landlord. Any fee or deposit not designated as nonrefundable is automatically considered refundable.
Return Timeline
Arizona has one of the shortest return deadlines in the nation. Under A.R.S. § 33-1321(D), landlords must return the security deposit within 14 business days after termination of the tenancy and delivery of possession.
- The 14-day period excludes Saturdays, Sundays, and legal holidays
- If deductions are made, the landlord must include a written itemized list
What Must Be Provided
Within the 14 business day period, landlords must provide either: (neighboring Nevada—see Nevada security deposit laws.)
- The full security deposit, OR
- The remainder after deductions, plus a written itemization of all charges
Interest Requirements
Arizona does not require landlords to pay interest on security deposits for standard residential rentals. Even if deposits are held in an interest-bearing account, any interest earned belongs to the landlord unless otherwise specified in the lease.
Storage Requirements
Arizona law does not require landlords to hold security deposits in a separate or interest-bearing account. Technically, landlords can commingle tenant deposits with operating funds.
Mobile Home Parks Exception
Mobile home parks have different rules under A.R.S. § 33-1431:
- Maximum deposit: 2 months' rent
- Interest required: At least 5% per annum on any damage, security, cleaning, or landscaping deposit
- Interest must be paid annually or compounded annually
Move-In Requirements
Arizona requires specific documentation at the start of tenancy:
- Landlord must provide a signed copy of the lease
- A move-in form documenting any existing damages to the dwelling unit
- Written notification that the tenant may be present at the move-out inspection
Upon tenant request, the landlord must notify the tenant when the move-out inspection will occur.
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Cleaning costs necessary to return the unit to move-in condition
- Other lease violations
Normal wear and tear cannot be charged to the tenant.
Penalties for Non-Compliance
Under A.R.S. § 33-1321, if the landlord fails to comply with the deposit return requirements:
- The tenant may recover the property and money due
- Plus damages equal to twice the amount wrongfully withheld
This effectively means tenants can recover up to 3x the wrongfully withheld amount (original amount plus double damages).
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. See how Passive works to automate this documentation.
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.