Alabama Security Deposit Collections & Holdings

Last Updated: January 31, 2023 by Ashley Porter

To learn about laws on security deposit returns in Alabama, click here.

Maximum Security Deposit Allowed in Alabama

Alabama law limits the maximum security deposit to one month’s rent, [1]
with exceptions. Landlords can collect more than one month’s rent for pets, modifications to the property, or anything that could increase liability risks to the landlord or property. [2]

For example, landlords may collect more than one month’s rent as a security deposit if the tenant has a waterbed or a history of eviction.

Can Landlords Charge an Additional Pet Deposit in Alabama?

Yes, landlords can collect an additional pet deposit in Alabama, except for service dogs and emotional support animals.

How Much Rent Can a Landlord Collect Upfront in Alabama?

There is no limit on the amount of rent that can be collected upfront in Alabama. Many states have a limit on the amount of rent that can be collected at once, but Alabama does not.

Security Deposit Collections in Alabama

While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, Alabama does not.

Do Landlords Have to Provide a Receipt for the Security Deposit in Alabama?

In Alabama, landlords are not required to provide a receipt for the security deposit.

What Obligations Do Landlords Have to Establish the Condition at Move-in in Alabama?

Alabama law does not require landlords to document or establish the property’s condition at move-in. While other states legally require a written inventory of damages to be completed when collecting a security deposit, Alabama does not.

Security Deposit Holdings in Alabama

Alabama law does not require landlords to hold security deposits separate from other funds.

Are Tenants Entitled to Interest on Their Security Deposit in Alabama?

No, Alabama law does not require landlords to provide interest on held security deposits.

How Are Security Deposits Accounted for in Alabama?

Security deposits are not considered taxable income when they are collected.

What Happens to a Security Deposit When the Property is Sold in Alabama?

If a property is sold in Alabama, the seller must transfer the security deposit to the new owner and handle it according to the same rules. [3]