Arkansas Security Deposit Laws: Limits, Returns, and Deductions

Effective July 20, 1979, Arkansas security deposit law is governed primarily by A.C.A. § 18-16-304 and § 18-16-305. While the rules are relatively straightforward, the 60-day return window is one of the longest in the country, and the applicability of the deposit cap depends on the size of the landlord's portfolio and management structure.

Security Deposit Limits

Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official Arkansas Code Title 18, Chapter 16, Subchapter 3 - Security DepositsPreview unavailable. Landlords must always ensure their lease agreements directly adhere to this state code.

Standard Limits (6+ Units or Managed for a Fee)

Landlords who rent more than five dwelling units or any landlord who hires someone else to manage the property or collect rent for a fee are subject to statutory deposit limits:

Small Landlords (5 or Fewer Units)

Landlords who own five or fewer residential dwelling units and do not hire a third party to manage the property or collect rent for a fee are not subject to these limits and may set deposit amounts at their discretion. However, charging excessively high deposits may still be challenged in court as unconscionable.

Pet Deposits

Arkansas law permits landlords to charge a separate pet deposit. There is no specific statutory cap on pet deposit amounts in isolation. However, for landlords subject to the security deposit limit under A.C.A. § 18-16-304, the total amount of all deposits, including any pet deposit, cannot exceed two (2) months' periodic rent.

Additionally, no pet deposit can be charged for trained service animals or emotional support animals, as these are protected under the Fair Housing Act.

What Can Be Deducted

Landlords may deduct from the security deposit for:

1. Unpaid rent - any rent owed through the end of the tenancy.
2. Damages beyond normal wear and tear - repairs for damage caused by the tenant, their guests, or pets.
3. Cleaning costs - only to restore the unit to the condition it was in at move-in.

What is NOT Deductible

• Normal wear and tear - faded paint, minor scuffs, worn carpet from regular use.
• Routine maintenance - items the landlord would need to address between any tenants (e.g., changing HVAC filters, lawn care).
• Pre-existing damage - conditions present before the tenant moved in.

Return Deadline: 60 Days

Arkansas gives landlords 60 calendar days after the tenant vacates the property to return the security deposit or provide an itemized statement of deductions. The 60-day clock begins once the tenant has vacated and provided a valid forwarding address.

Itemized Statement Requirements

If the landlord withholds any portion of the deposit, they must provide the tenant with a written, itemized list that includes:

• A description of each deduction.
• The dollar amount of each deduction.
• The remaining balance returned to the tenant.

This statement must be mailed to the tenant's last known or forwarding address.

No Interest Required

Arkansas law does not require landlords to pay interest on security deposits, nor does it require that deposits be held in a separate, dedicated bank account (though doing so is best practice).

Penalties for Non-Compliance

If a landlord fails to return the deposit or provide an itemized statement within the 60-day window:

• The landlord forfeits the right to withhold any portion of the deposit for damages.
• The tenant can demand a full refund and, if the landlord willfully violates the statute, may recover up to twice the amount wrongfully withheld plus reasonable attorney fees.

Best Practices for Arkansas Landlords

1. Conduct thorough move-in and move-out inspections - use a detailed checklist with dated, timestamped photos.
2. Document everything in writing - especially any damage noted at move-in so you can differentiate pre-existing conditions from tenant-caused damage.
3. Track the 60-day deadline - set calendar reminders immediately when a tenant gives notice to vacate.
4. Keep pet deposits separate - clearly document pet-related damages apart from general wear and tear.
5. Mail the statement via certified mail - to create proof of delivery.

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