Arkansas landlords must understand Arkansas security deposit law, as doing so will help them avoid improper deductions, missed return deadlines, and other mistakes that will affect their bottom line.
This guide explains everything landlords need to know about these regulations, including maximum amounts landlords can request, how to store deposits, whether interest applies, legal reasons to deduct, returning deposits, handling disputes, and more.
Statutes Regulating Arkansas Security Deposits
Arkansas’s security deposit laws live within Title 18, Chapter 16, Subchapter 3 of the Arkansas Code, which outlines how landlords collect, manage, and return residential security deposits. These statutes also establish baseline requirements for deposit handling, permissible deductions, and procedural obligations that landlords must follow to remain compliant.
Maximum Security Deposit Amounts Under Arkansas Law
Arkansas law caps security deposits at 2 months’ rent, which applies only to landlords who own six or more residential units or operate as a corporation. The limit stays the same regardless of lease type or contract length and remains consistent across standard rental agreements.
Landlords who own fewer than six residential units and do not operate as a corporation fall outside this cap and may collect higher deposits if they choose. No other exceptions affect statewide deposit limits.
Security Deposit Storage Regulations
Arkansas law does not set rules for how landlords must store security deposits or whether they must issue receipts. Since no storage requirements apply, landlords may choose any storage method that fits their business, as long as they handle the funds responsibly and return them within the timelines set by Arkansas law.
Security Deposit Interest in Arkansas
Arkansas law does not require landlords to place security deposits in interest-bearing accounts, and landlords do not need to calculate or return interest when they refund a tenant’s deposit.
Making Security Deposit Deductions
Landlords depend on security deposit deductions to protect the overall condition of a rental property. Tenants sometimes default on rent or cause damage beyond normal wear and tear, and landlords need funds available to square up balances and complete repairs to return the unit to its original condition.
When Landlords Can Deduct
Arkansas landlords may use a tenant’s security deposit for the following reasons:
- Repairing damage that exceeds normal wear and tear
- Recovering unpaid rent that remains after the lease ends
- Covering cleaning costs needed to restore the unit’s earlier condition
- Repairing fixtures or appliances damaged through tenant misuse
- Addressing damage caused by unauthorized alterations or negligence
When Landlords Can’t Deduct
Arkansas landlords may not use a tenant’s security deposit for the following reasons:
- Repairing deterioration that results from typical aging and use
- Addressing cosmetic updates meant only to improve the property
- Covering routine cleaning expected after normal occupancy
- Fixing minor marks or scuffs consistent with everyday living
- Funding upgrades that increase the property’s value beyond its earlier state
Necessary Documentation to Accompany Deductions
Arkansas law requires landlords to provide an itemized written list of deductions when retaining any portion of a security deposit, but it does not require receipts, invoices, or other supporting documentation to accompany those deductions. Landlords may still choose to share such records to promote transparency or reduce disputes, but the statute does not obligate them to include documentation when returning the remaining balance to a tenant.
What to Do When Deductions are Greater Than the Deposit
Tenants sometimes leave damage that exceeds the amount of their security deposit, and landlords need a clear plan to recover the additional costs. Arkansas landlords should first request repayment directly from former tenants and should keep detailed records of all damages and repair expenses. Arkansas law requires landlords to return any remaining deposit or send an itemized list of deductions within 60 days, which supports efforts to collect extra funds.
Landlords who cannot recover the remaining balance can file a claim in the Arkansas small claims court or hire a collection agency to pursue the money owed.
Returning Security Deposits to Tenants
Arkansas law outlines clear rules for how landlords must return any remaining portion of a tenant’s security deposit after making all eligible deductions.
Required Timeline for Return
Arkansas landlords must return a tenant’s security deposit, along with an itemized list of deductions, within 60 days after the tenant vacates the property and provides a valid mailing address. The 60-day period begins once the tenant moves out and notifies the landlord of that address.
Method for Return
Arkansas law allows landlords to return deposits by standard payment methods, such as a check or money order, or through another form of payment both parties agree to. Landlords must include an itemized list of deductions with any remaining funds so the tenant understands how the landlord calculated the final amount.
Penalties for Late Return
Arkansas landlords who miss the 60-day deadline or improperly withhold funds risk losing the right to keep any portion of the deposit. They may also owe damages equal to twice the amount wrongfully withheld, which gives landlords a strong incentive to follow the legal return process.
Security Deposit Disputes
Tenants who disagree with how a landlord handles their security deposit have every right to challenge the decision. They should begin by reviewing the itemized deductions, contacting the landlord directly for an explanation, or sending a written request for repayment. If the landlord refuses to resolve the issue, they may consider trying mediation or pursuing the matter in court.
As a landlord, prepare yourself for security deposit disputes by using a move-in and move-out checklist, staying current with accounting and bookkeeping, and including clear terms within your lease agreement. Strong documentation, familiarity with Arkansas landlord-tenant laws, and attention to all required timelines can help limit disputes before they begin.
Using Condition Reports to Document Damage in Arkansas
Security deposits in Arkansas are easier to manage when landlords use digital condition reports to establish clear responsibility for property damage and reduce disputes over security deposit deductions. Straighforward documentation from the beginning of the lease creates consistency and supports smoother property management workflows.
Landlords can also create digital condition reports with photos and videos using property management software on their smartphone or tablet. Byrecording a rental unit’s condition before move-in and after move-out, landlords will gather clear damage-related evidence and strengthen their position when making lawful security deposit deductions.
Sign up for a free TurboTenant account to document property conditions efficiently and store all inspection records in one secure, organized location.
FAQs: Arkansas Security Deposit Law
Can a landlord deduct painting from a security deposit in Arkansas?
An Arkansas landlord may deduct painting costs only when the damage goes beyond normal wear and tear. Minor scuffs or fading from ordinary use generally qualify as everyday wear, while repainting required due to stains, significant markings, or unauthorized paint colors may support a valid security deposit deduction.
Are nail holes considered normal wear and tear in Arkansas?
In Arkansas, small nail holes from typical picture hanging are usually considered normal wear and tear and do not justify a deduction. Larger holes, wall anchors, or damage requiring significant repair may be deducted when the condition exceeds routine maintenance.
Does the landlord or tenant have to pay for carpet cleaning in Arkansas?
Arkansas landlords may deduct for carpet cleaning only when a tenant leaves carpeting excessively dirty or damaged beyond everyday use. Routine cleaning associated with ordinary wear remains the landlord’s responsibility and is not a valid deduction from the security deposit.
What happens if a landlord doesn’t return a security deposit within 60 days in Arkansas?
If an Arkansas landlord fails to return the security deposit or an itemized list of deductions within 60 days after move-out, the landlord may lose the right to keep any portion of the deposit. Courts may also award up to double the amount wrongfully withheld, along with reasonable attorney fees, when a landlord willfully violates the statute.
