Georgia Security Deposit Law

Georgia Security Deposit Law

Last Updated: June 15, 2022 by Elizabeth Souza

In Georgia, the collection and return of security deposits are primarily regulated under GA Code § 44-7-30 to § 44-7-37. These laws provide a set of rules that Georgia landlords and property managers have to follow to protect all parties.

Quick Facts Answer
Maximum Charge No Limit
  • Unpaid Rent
  • Utilities & Services
  • Cost of Repairs for Damage
Return Deadline 30 Days
Return Penalty Three Times the Security Deposit + Attorneys’ Fees
Questions? To chat with a Georgia landlord tenant attorney, Click here

Maximum Security Deposit Charge in Georgia

In Georgia, landlords are not bound by a statutory limit on the amount of security deposit that a tenant can be charged.

Exceptions to Certain Security Deposit Rules in Georgia

The rules to be discussed below, except for those pertaining to the manner of returning the security, do not apply if all of the conditions below are met:

  1. The landlord is a natural person (i.e., not a company or business entity).
  2. The total number of rental units the landlord owns collectively with their immediate family is less than 10 rental units.
  3. Landlord does not use a management service in relation to renting out units, including rent collection services.

It’s important to note that even if the landlord falls within the exception, the rules on the deadline for returning the security deposit, providing a written statement, mailing both and the tenant’s forfeiture of the security deposit will apply.

Additional Pet Deposits. Under Georgia’s law, the landlord may ask for an additional pet deposit; however, people with disabilities who use service animals are entitled to full and equal access to housing. Thus, the tenant may not be discriminated against and the landlord may not require the tenant to pay extra to have a service animal. If the service animal causes damage to the rental unit, the tenant is liable to pay for any damages.

The Federal Fair Housing Act requires housing facilities to allow tenants who use service dogs and emotional support animals to have an equal opportunity to use and enjoy their home.

Security Deposit Holdings in Georgia

Unless the landlord falls within the exception discussed, the landlord must do one of the two things below:

1. Place the security deposit in an escrow account in a state or federally regulated depository that is only used for holding security deposits and notify the tenant in writing of the details of where the latter’s security deposit is being kept.

2. Post a surety bond in the amount of $50,000 or the total amount that the landlord is holding in security deposits (from all tenants), whichever is lower. The bond must be issued by a surety company authorized to do business as such in Georgia and posted with the Clerk of the Superior Court in the county where the rental property is located. It shall be conditioned upon the landlord returning the security deposit on time and in compliance with the rules. The Clerk of the Superior Court shall receive $5.00 as a filing fee and to record the surety bond. If the surety bond is cancelled there is a filing fee of $5.00. Note, the Clerk of the Superior Court is not liable if the surety bond is invalid.

If the landlord fails to comply with the above rule on holding the security deposit, the landlord will lose the right to withhold the security deposit or retain any part thereof.

Allowable Deductions on Security Deposits in Georgia

The landlord can only use the security deposit when the lease or tenancy has ended or has been terminated. Also, the landlord can only use the security deposit to cover:

  1. Unpaid rent.
  2. Unpaid utilities or cleaning services contracted by the tenant.
  3. Unpaid pet fees.
  4. Cost of repairs for damage caused by the tenant or their invited guests (which includes negligence, carelessness, and abuse of the property).
  5. Damages or loss suffered by the landlord caused by the tenant’s abandonment of the unit.

The landlord is not always allowed to use the security deposit to cover repairs for damage to the unit. Two things must be met before the landlord may do so:

  1. The damage must not be due to normal wear and tear ; and
  2. The damage was not included in the list of existing damage presented to the tenant prior to the latter’s move-in date.

Can the deposit be used by the tenant as last month’s rent? Not usually, but it can be done if there is a written agreement between the parties to do so.

“Normal Wear and Tear” vs. “Damage” in Georgia

  • Normal wear and tear” refers to minor issues that occur naturally as a result of the tenant using the property as it was intended to be used to be used but only when that deterioration occurs without negligence, carelessness, accident, misuse, or abuse by the tenant or the people the tenant brings there. These minor issues can include gently worn carpets, loose door handles, fading wall paint and flooring, stained bath fixtures, lightly scratched glass, dirty grout and even mold.
  • Damage” refers to the destruction that is a result of abuse or negligence by a tenant during the tenancy period. Damage to the rental property negatively impacts its usefulness, value, or normal function. It can include pet damage (heavily stained and ripped carpets), broken tiles, holes in the wall, broken windows and missing fixtures.

Check out our article on “wear and tear” vs. “damage” to get a better idea of the difference and visit our state laws page to learn more about other landlord-tenant responsibilities.

Returning Security Deposit in Georgia

Time Frame: The landlord has 30 days from the day the landlord gets the unit back from the tenant to return the security deposit. If the landlord intends to make any deduction on the security deposit, the landlord must do the following:

1. The landlord shall inspect the premises within three business days from the end of the lease or of the tenant’s vacation of the premises, whichever is earlier.

2. The landlord must make a complete itemized list of damage in the unit and estimated costs of the same. The tenant may request to inspect the premises within five business days from vacating the premises or the end of the tenancy to verify the items on the list.

If the tenant vacates the unit without notifying the landlord, the landlord must do the inspection within a reasonable time from finding out that the tenant has left. This will serve as the basis for the deductions.

If the tenant agrees to the damage as itemized in the list and signs the same together with the landlord, then the list will serve as evidence of the damage. If the tenant objects to some or all of the items stated in the list, the tenant must specify the same therein, otherwise, the tenant will not be able to dispute them in a court proceeding to recover the security deposit. However, if the tenant never saw the list or was not present for the inspection they can dispute the items on the list later on.

Within 30 days of the termination of the lease or of the tenant’s vacancy of the premises, the landlord must provide the tenant with the written statement of deductions and return what is left of the security deposit.

Manner of Returning the Deposit: The landlord can return the deposit and deliver the notice for deductions any reasonable way. If there isn’t a more practical way, the landlord is considered to have fulfilled their obligation if they mail the deposit with the written notice of deductions via first-class mail to the tenant’s last known address.

Failure to Provide the Itemized List of Damage: Failure to provide the tenant with an initial list of damage will cause the landlord to forfeit all rights to retain any part of the security deposit.

Failure to Provide the Tenant with the Written Statement of Deductions: If the landlord fails or refuses to provide the tenant with the written statement of deductions, the landlord loses all rights to withhold any portions of the security deposit.

Failure to Return the Security Deposit on Time: If the landlord fails or refuses to return the security deposit, or what’s left of it, then the landlord may be made to pay three times the amount withheld plus reasonable attorneys’ fees.

However, if the landlord is able to show that the refusal was due to an honest mistake that was not due to the landlord’s fault, then the landlord will only be made to pay the amount mistakenly withheld.

Unclaimed Funds: If the letter containing the written statement and the balance of the security deposit is returned to the landlord undelivered and if the landlord is unable to find the tenant despite reasonable efforts, the unclaimed security deposit will be forfeited by the tenant. The security deposit will become the landlord’s property within 90 days after the initial mailing.

Questions? To chat with a Georgia landlord tenant attorney, Click here

Security Deposits and Tax Filing in Georgia

How the security deposit will be treated tax-wise depends on whether or not the landlord gets to keep it (or part of it).

Taxable Income: Security deposits are not automatically considered income when the landlord receives them. The IRS advises to not include security deposits as income if the landlord may still be required to return the same. They only become taxable income when the landlord no longer has any obligation to refund them. For example, if the security deposit was given in 2020 but was only forfeited in 2021, then the landlord should only include it as income in 2021.

Reporting Security Deposit as Income: Whether or not security deposit should be reported as income and when to do so will depend on what it is being applied to or used as. Below are three simple rules the IRS has suggested to follow:

  1. If the deposit is forfeited due to a breach of the lease or applied to unpaid rent, then the amount kept should be declared as income in the year it was forfeited or applied.
  2. If the security deposit is used to cover expenses that are chargeable to it, then the landlord should only include the part of the deposit used as income if the landlord includes the cost of repairs as expenses. If the landlord doesn’t include them as expenses as a matter of practice, then there’s no need to include the part of the deposit kept to cover them as income.
  3. There is an agreement between the parties to use the deposit or part of it as the final month’s rent, then the landlord should include it as income when the same is received.

Additional Rules & Regulations in Georgia

Receipt Requirements: The landlord is not required to provide a receipt for the security deposit in Georgia.

Security Deposit Interest in Georgia: Georgia’s law require security deposits to be deposited into a separate account but the landlord is not required to pay interest on them.

For additional questions about security deposits in Georgia, please refer to the official state legislation, Georgia Code § 44-7-30 – § 44-7-37, for more information.