Arkansas Commercial Security Deposit Laws
Understand the laws governing commercial security deposits in Arkansas, including limits, commingling rules, and return timelines.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
Arkansas Commercial Security Deposit Laws
In Arkansas, the regulations surrounding security deposits for commercial properties are remarkably different—and significantly less restrictive—than those for residential properties. Because Arkansas law views commercial landlords and commercial tenants as sophisticated parties engaging in an arms-length business transaction, the state does not impose statutory limits or strict handling requirements on commercial security deposits.
Under the foundational principles of Arkansas property law, much of which was established in the Unlawful Detainer Act of 1875, the entirety of the rules governing a commercial security deposit must be established within the commercial lease agreement.
Statutory Limits on Commercial Security Deposits
There is no maximum limit imposed by Arkansas state law on the amount a landlord can charge for a commercial security deposit.
Unlike residential leases (which are generally capped at explicitly defined parameters, often two months' rent), commercial landlords are free to negotiate the security deposit amount based on the risk profile of the tenant, the specific nature of the business, and the scope of the landlord's build-out or tenant improvements.
| Aspect | Arkansas Commercial Law | :--- | :--- | | Maximum Deposit Amount | No statutory limit; determined by the lease. | Separate Account Required | No. Commingling of funds is legally permissible unless prohibited by the lease. | | Interest Payments Required | No. Landlords are not required to pay tenants interest on held deposits. |
Handling and Commingling of Funds
Arkansas law does not require commercial landlords to hold security deposits in separate, interest-bearing escrow accounts
Unless the commercial lease explicitly states otherwise:
- The landlord may commingle the security deposit with their own operating funds.
- The landlord may use the deposit for other business purposes, provided they can return the funds according to the terms of the lease upon termination.
- Any interest earned on the deposit belongs to the landlord, not the tenant.
Best Practice: Even though it is not legally required, maintaining security deposits in a separate ledger or account is highly recommended as a best practice in commercial property management to ensure liquidity when a lease terminates.
Returning the Commercial Security Deposit
The Arkansas statutes that mandate a strict 60-day or 30-day timeline for the return of a residential security deposit (along with itemized lists of deductions) do not apply to commercial leases.
The Lease Dictates the Timeline
The deadline for returning a commercial security deposit must be explicitly drafted into the lease agreement
Commercial leases frequently structure return timelines depending on when the tenant officially vacates, when the final CAM (Common Area Maintenance) reconciliation is completed, or when any damage assessments are finalized.
Permitted Deductions
Because statutory definitions do not constrain commercial properties, landlords may deduce funds from the commercial security deposit for any reasons outlined in the lease, which commonly include:
- Unpaid base rent or percentage rent.
- Unpaid CAM charges, taxes, or insurance obligations.
- Costs to repair damages beyond normal wear and tear.
- Costs associated with the tenant failing to restore the premises to its original condition (if required by the lease).
- Legal fees incurred due to the tenant's default.
If the lease is entirely silent on the handling of the deposit (which is rare), general contract law applies, implying that the deposit must be returned within a "reasonable" time frame, sans legitimate deductions.
See our Commercial Lease Requirements guide for more details on structuring lease terms.
How Landager Helps Commercial
Landlords Managing commercial security deposits effectively requires meticulous bookkeeping
Landager allows Arkansas commercial landlords to seamlessly track security deposit balances, record custom ledger entries for permissible deductions mapped directly to lease clauses, and easily calculate final reconciliation statements at the end of a tenancy. Back to Arkansas Landlord-Tenant Laws Overview.
Frequently Asked Questions
▶What are the Arkansas landlord-tenant laws every property owner should know?
Arkansas is widely considered one of the most landlord-friendly states in the country. Its laws place significant responsibility on tenants and grant landlords broad discretion in setting lease terms. However, the landmark Act 1052 of 2021 introduced implied habitability standards, significantly updating the legal legal environment for rental properties first entering a lease after November 1, 2021. This guide covers the essential compliance requirements for property owners and landlords.
Read the complete guide▶What is the Arkansas eviction process and how long does it take?
The Arkansas eviction process requires landlords to provide written notice to tenants before filing a court action. The type and length of notice depends on the reason for eviction — typically shorter for non-payment of rent and longer for lease violations or no-fault terminations. Self-help evictions (changing locks, removing belongings, shutting off utilities) are illegal in Arkansas. The full court process varies but typically takes several weeks.
Read the complete guide▶What are the Arkansas security deposit rules and return deadlines?
Arkansas has specific rules governing how much landlords can charge for security deposits, how deposits must be held, and the deadline for returning deposits after a tenant moves out. Landlords must provide an itemized statement of any deductions made from the deposit. Failure to comply with deposit return deadlines can result in penalties and the forfeiture of the landlord's right to claim deductions.
Read the complete guide▶What are the Arkansas rent increase laws and caps for landlords?
Arkansas has specific rules governing when and how landlords can increase rent. During a fixed-term lease, rent generally cannot be increased unless the lease explicitly allows it. For month-to-month tenancies, landlords must provide proper written notice before an increase takes effect. Check whether Arkansas has any local rent control ordinances that may impose additional caps or requirements.
Read the complete guide▶What is the grace period for late rent in Arkansas?
Arkansas has specific rules regarding grace periods for late rent and the amount that can be charged as a late fee. Late fee provisions must be stated in the lease agreement, and fees must be reasonable. Check Arkansas state law and any applicable local ordinances for the exact grace period and late fee limits that apply to your rental property.
Read the complete guide▶What disclosures must Arkansas landlords provide to tenants?
Arkansas landlords must provide certain disclosures to tenants before or at the time of lease signing. Common required disclosures include lead-based paint hazards (for pre-1978 buildings, a federal requirement), the identity of the landlord or property manager, and any known material defects in the property. Additional state-specific disclosures may include flood risk, mold hazards, and environmental conditions.
Read the complete guide▶What are the Arkansas lease requirements for rental properties?
Arkansas recognizes both written and oral leases, though written leases are strongly recommended for terms longer than one year. Lease agreements should include the rent amount, payment due date, security deposit terms, maintenance responsibilities, and rules regarding entry, pets, and subletting. Certain lease clauses that waive tenant statutory rights may be void and unenforceable under Arkansas law.
Read the complete guide▶What are Arkansas landlord maintenance obligations and habitability standards?
Arkansas landlords must maintain rental properties in a condition that is fit for habitation and complies with applicable building, housing, and health codes. This includes maintaining structural integrity, plumbing, heating and cooling systems, electrical systems, and pest control. Tenants typically have the right to request repairs in writing, and if repairs are not made within a reasonable time, tenants may have legal remedies available.
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