Alabama Security Deposit Laws: Limits, Returns, and Deductions

Alabama's security deposit laws are governed by the Alabama Uniform Residential Landlord and Tenant Act (AURLTA), codified in Alabama Code § 35-9A-201. This guide covers everything landlords need to know about collecting, holding, and returning security deposits in Alabama.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Alabama for guidance specific to your situation. Information last verified: March 2026.

Security Deposit Limits

Residential Properties

Under the AURLTA, the maximum security deposit for residential rental properties is one month's rent. This applies regardless of:

• Whether the unit is furnished or unfurnished
• The type of property (apartment, house, condo)
• The number of tenants on the lease

Additional Deposits

The one-month limit generally does not apply to:

• Pet deposits — Landlords may collect additional deposits for pets
• Tenant alterations — Extra deposits for tenant-requested modifications
• Increased liability — Additional deposits where risk factors warrant them

Non-AURLTA Properties

If a rental agreement is not covered by the AURLTA (e.g., certain commercial properties), there may be no statutory limit on the deposit amount. However, the vast majority of residential rentals in Alabama fall under the AURLTA.

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. Damage beyond normal wear and tear — Tenant-caused damage that exceeds ordinary use
3. Unpaid late fees — If specified in the lease agreement
4. Cleaning costs — Costs to restore the unit to move-in condition (beyond normal wear)
5. Other lease-specified charges — Any additional charges outlined in the lease

What is NOT Deductible

• Normal wear and tear — Faded paint, minor carpet wear, small nail holes
• Pre-existing damage — Conditions present before the tenant's occupancy
• Routine maintenance — Items the landlord would replace or repair regardless of tenant actions

Return Deadline: 60 Days

After a tenant moves out, landlords have 60 days to either:

1. Return the full security deposit, or
2. Provide an itemized written statement of deductions along with the remaining balance

The 60-day period begins from the date the tenant vacates and surrenders possession of the property.

Itemized Statement Requirements

If any deductions are made, the landlord must provide:

• A written list of each deduction with a description
• The dollar amount of each deduction
• The remaining balance of the deposit (if any)

Penalties for Non-Compliance

If a landlord fails to return the security deposit or provide an itemized list of deductions within the 60-day window:

• The tenant may be entitled to double the amount of the deposit that should have been returned
• The tenant can pursue the claim in small claims court
• The landlord may also be liable for court costs and attorney's fees

Holding the Deposit

Alabama law has relatively few restrictions on how landlords hold security deposits:

• No separate account required — Landlords are not required to keep deposits in a separate or escrow account
• No interest required — Landlords do not have to pay interest on security deposits
• No receipt required — There is no statutory requirement to provide a receipt, though doing so is advisable

Best Practices for Landlords

1. Document the unit's condition at move-in — Take dated photos and videos; have the tenant sign a move-in checklist
2. Use a written lease — Clearly specify the deposit amount, what it covers, and conditions for deductions
3. Keep deposits organized — Even though a separate account isn't required, tracking deposits per unit prevents confusion
4. Conduct a move-out inspection — Compare the unit's condition against the move-in documentation
5. Return deposits promptly — Don't wait until day 60; earlier returns reduce disputes
6. Keep itemized records — Maintain receipts for any repair or cleaning work deducted from the deposit

How Landager Helps

Landager's property management dashboard helps you track security deposits for each lease, set automated reminders for the 60-day return deadline, and store move-in/move-out documentation — keeping your records organized and your operations compliant.

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