Alabama landlords benefit from understanding Alabama security deposit law, as it helps them avoid common issues like incorrect handling of deposits, unlawful deductions, and missed return deadlines.
In this guide, you’ll learn everything to know about these regulations, including maximum deposit amounts, storage rules, interest requirements, lawful deductions, return procedures, dispute processes, and more.
Statutes Regulating Alabama Security Deposits
Alabama’s security deposit rules are set out in Section 35-9A-201 of the Alabama Code, which governs how landlords collect, manage, and return deposits for residential rental units.
Maximum Security Deposit Amounts Under Alabama Law
Alabama law sets a standard security deposit limit equal to 1 month’s rent. This cap applies to most residential leases and does not vary by lease type, contract length, or other routine rental terms.
Alabama law also allows landlords to collect extra security deposits when a tenant owns a pet, requests changes to the unit, or creates higher liability risks. These additional deposits do not count toward the 1-month limit.
Security Deposit Storage Regulations
Alabama law does not set rules for how landlords must store tenant security deposits, so they may choose any reasonable method to hold these funds. The law does not require a specific account type, receipts, or tenant notifications, giving landlords flexibility to store deposits as they please, so long as they keep them secure.
Security Deposit Interest in Alabama
Alabama law does not require landlords to place security deposits in interest-bearing accounts, and landlords need not pay tenants any interest on these funds.
Making Security Deposit Deductions
Security deposit deductions help landlords protect the condition of a rental property. Tenants sometimes leave damage beyond normal wear and tear, and landlords can use deposit funds to cover repairs and return the unit to its previous condition.
When Landlords Can Deduct
Alabama landlords may draw from a tenant’s security deposit for the following reasons:
- Repair damage beyond normal wear and tear caused during the tenancy
- Replace items that the tenant broke or removed without permission
- Cover unpaid rent owed at the end of the rental term
- Address costs tied to unauthorized pets or related property damage
- Restore the unit after the alterations the tenant made without approval
When Landlords Can’t Deduct
Alabama landlords may not draw from a tenant’s security deposit for the following reasons:
- Address routine upkeep already expected as part of normal maintenance
- Charge for improvements that upgrade the property beyond its earlier condition
- Cover expenses caused by landlord negligence or delayed repairs
- Charge for standard cleaning needed after an ordinary tenancy
- Pay for issues unrelated to the tenant’s occupancy or conduct
Necessary Documentation to Accompany Deductions
Alabama law requires landlords to provide tenants with an itemized list of deductions when they withdraw from the security deposit. This list must show each charge and the amount owed. However, the law does not require landlords to include receipts, invoices, or other documents with the itemized statement.
What to Do When Deductions are Greater Than the Deposit
Tenants sometimes leave damage or unpaid charges that exceed the security deposit. When this happens, Alabama landlords may request the remaining balance from the former tenant and should do so in writing. State law does not set a specific deadline for collecting these extra funds.
If the landlord cannot recover the remaining balance, the landlord may pursue the claim in their local Alabama small claims court.
Returning Security Deposits to Tenants
Alabama law outlines clear rules for how landlords must return any remaining security deposit funds after making eligible deductions.
Required Timeline for Return
Alabama landlords must return the remaining deposit and provide an itemized list of deductions within 60 days after the tenant vacates the unit and hands over possession. The 60-day period begins once the tenant leaves and the landlord regains control of the property.
Method for Return
Alabama law does not require a specific method for returning the deposit, so landlords may use any reasonable form of payment, including a check or an electronic transfer. When a landlord withholds any amount from the tenant’s deposit, they must include an itemized list of deductions with the return.
Penalties for Late Return
If a landlord does not return the deposit or provide an itemized list within 60 days, they lose the right to keep any portion of the deposit. In some situations, the landlord may also be liable for damages if they withholds funds without a valid reason.
Security Deposit Disputes
If a tenant disagrees with how a landlord handles the security deposit, they may raise a dispute. Tenants often start by requesting an explanation directly from the landlord and may pursue mediation or a court claim if they believe the landlord violated Alabama requirements.
As a landlord, prepare for potential deposit disputes by using move-in and move-out checklist tools, staying current with accounting and bookkeeping, and adding clear terms to all future lease agreements. Strong documentation, a solid understanding of Alabama security deposit laws, and compliance with all timelines can go a long way towards preventing and resolving potential disagreements.
Using Condition Reports to Document Damage
When handling security deposits in Alabama, landlords should always conduct thorough move-in and move-out evaluations. Digital Condition reports help document a unit’s condition at each stage, promote transparency with tenants, and make day-to-day property management easier.
Landlords can create digital reports with photos and videos through property management software on their smartphones. Accurate documentation before move-in and after move-out strengthens proof of any changes and helps make security deposit deductions straightforward and non-negotiable.
Sign up for a free TurboTenant account to streamline your documentation process and manage your rentals with more confidence.
FAQs: Alabama Security Deposit Law
Can a landlord deduct painting from a security deposit in Alabama?
A landlord may deduct painting costs only when a tenant causes damage that goes beyond normal wear and tear. Routine repainting that comes from ordinary use does not qualify as a deductible expense under Alabama law.
Are nail holes considered normal wear and tear in Alabama?
Small nail holes from typical picture hanging usually count as normal wear and tear in Alabama. A landlord may deduct only when nail holes cause noticeable or excessive damage requiring more than routine maintenance.
Who has to pay for carpet cleaning in Alabama, the landlord or the tenant?
A landlord cannot charge for standard carpet cleaning after an ordinary tenancy. They may deduct cleaning costs only when a tenant leaves stains, odors, or damage beyond normal wear and tear.
What happens if a landlord doesn’t return a security deposit within 60 days in Alabama?
If a landlord does not return the deposit or provide an itemized list within 60 days, they lose the right to keep any part of the deposit and may also be liable for withholding funds without a valid reason.
