Arkansas Security Deposit Collections & Holdings

Last Updated: March 2, 2023 by Ashley Porter

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

Maximum Security Deposit Allowed in Arkansas

Arkansas law limits the maximum security deposit to two months’ rent. [1] However, some landlords that own five or fewer units are exempt from the security deposit rules.

Rental units are exempt from these laws if both of the following are true:

• The total number of rental units the landlord owns collectively with their immediate family and their companies is five or fewer rental units [2]
• The landlord does not use a management service to rent out units, including rent collection services [3]

Can Landlords Charge an Additional Pet Deposit in Arkansas?

In Arkansas, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total security deposit cannot exceed two months’ rent. Landlords cannot exceed the limit by giving them another name like “pet deposit” or “damage deposit”.

This law does not prevent landlords from adding a monthly pet premium.

How Much Rent Can a Landlord Collect Upfront in Arkansas?

There is no limit on the amount of rent that can be collected upfront in Arkansas. Many states have a limit on the amount of rent that can be collected at once, but Arkansas does not. Prepaid rent is not considered part of the security deposit in Arkansas.

Security Deposit Collections in Arkansas

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, Arkansas does not.

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

Although some states like Washington require a receipt, landlords are not required to provide a receipt for the security deposit in Arkansas.

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

Arkansas law does not have specific obligations before a tenancy. While other states like Washington have pre-tenancy obligations like a written inventory of damages, Arkansas does not.

Security Deposit Holdings in Arkansas

Arkansas law does not require landlords to hold security deposits separate from other funds. Some other states mandate how and where security deposits are held, but Arkansas does not.

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

Arkansas law does not require landlords to provide interest on held security deposits.

How Are Security Deposits Accounted for in Arkansas?

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

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

When a property is sold in Arkansas, the seller must transfer the security deposit to the new owner, who must handle it according to the same rules. [4]