Every Alabama landlord or landlords have the right to demand their tenant pay a security deposit prior to signing a lease. But the management of the tenant’s original deposit is something that is controlled by the statewide security deposit laws and landlord tenant laws.

So, having an understanding of the laws surrounding the landlord tenant relationship is critical when managing an Alabama security deposit. With this in mind, we at Level Property Management Group have put together the following guidelines regarding the state’s security deposit laws.

Is There a Limit to How Much You Can Ask For a Security Deposit in Alabama?

Yes! The Alabama landlord tenant laws state that the maximum limit a landlord can charge a tenant for security deposit is one month’s rent. This however, doesn’t include any other deposits a landlord can charge their tenant, like charging a tenant a pet deposit or one for property modifications.

Can Landlords Charge Tenants an Additional Deposit in Alabama?

Yes! Under the state’s security deposit laws, a landlord has the right to charge their tenant an additional deposit should you allow pets. This pet deposit helps absorb some of the costs of wear and tear that the pet might cause to your Alabama home. Just like the regular security deposit, a pet deposit is a one-time charge that a tenant pays upfront for keeping a pet.

That said, you can’t charge a pet deposit for a service animal. According to the Alabama Fair Housing Act, a tenant with a disability who’s living with a service animal also has a right to full and equal housing access.

As for any damage the service animal might cause, you can hold the tenant liable for the repair costs without breaking the lease or violating the Fair Housing Act.

What Are Acceptable Reasons for Deposit Deductions?

After a tenant moves out of their rental unit, Alabama landlords might be able to make certain deductions to their security deposit, such as:

  • For unpaid rent.
  • For costs arising from damages exceeding normal wear and tear or other costs to get the rental unit ready to rent.

What is the Difference Between ‘Normal Wear and Tear’ and Excessive Damage?

‘Normal wear and tear’ is the term for normal deterioration a property undergoes with age. These are minor issues such as faded paint, scuffed wallpaper, grout on tiles and a faded carpet due to normal, everyday tenant use.

Excessive damage, on the other hand, refers to damage to a home that occurs due to accident, abuse, misuse, negligence or carelessness. These are serious issues and include things like missing windows or doors, a missing curtain, a ripped off tile or a ripped carpet.

As an Alabama landlord, you’re only allowed to make deductions to a tenant’s unit if that tenant causes excessive damage. Costs of fixing damages occurring due to normal wear and tear fall under the responsibilities of Alabama landlords.

Do Security Deposits Earn Interest in Alabama?

There are no specific laws in Alabama requiring landlords to store their tenants’ deposits in a specific manner. As such, you can store it in any manner you see fit.

Do You Have to Charge all Tenants the Same Security Deposit?

No, it doesn’t have to be equal. According to Alabama landlord tenant laws however, it must be based on the same scale. While the deposit must be equivalent to one month’s rent, the security deposit can differ if the monthly rent for the rental property is different as well.

For instance, suppose you have two apartment units with a rent of $1,000 and $1,500. In such a case, the security deposit you can ask for the two apartment units can’t exceed the rent prices of $1,000 and $1,500, respectively.

Do You Have to Provide a Receipt After Receiving Their Security Deposit?

No, as per Alabama Security Deposit laws, a landlord isn’t required to provide their Alabama tenant a receipt of their security deposit after receiving it.

Are Walk-Through Inspections Required in the State of Alabama?

Generally, walk-through inspections can happen anywhere between one or two weeks before a tenant moves out. During these inspections, both the landlord and tenant can examine the condition of the property relative to its move-in state.

As per Alabama landlord tenant laws, the tenant will have to fix any excessive damage found prior to moving out. If they don’t fix excessive damages to the unit, the landlord will have to fix the damage and make appropriate deductions to the tenant’s security deposit.

How Much Time do Alabama Landlords Have to Return a Tenant’s Security Deposit?

According to Alabama landlord tenant laws, landlords have exactly 35 days to return their tenant’s security deposit. If an Alabama landlord made any deductions in this time, they need to send their tenant an itemized written statement alongside the remaining portion of deposit. In the statement, the landlord needs to detail the damages done by the tenant, as well as their approximate costs of repair.

Ideally, an Alabama landlord would send the statement to the tenant in question via first class mail, alongside the remaining deposit. It’s your tenant’s responsibility to provide you a valid forwarding address. A tenant’s forfeits their security deposit if they don’t claim their deposit within 180 days. In the event of an eviction, other rules might apply so consult a property management company familiar with Alabama law.

What Happens If I Sell the Property?

If you sell the property, then the new landlord is responsible for the security. Once you sell your property, the incoming landlord inherits the liability of returning any tenant security deposits.

Can a Landlord be Penalized for Wrongfully Withholding Their Tenant’s Security Deposit?

Yes. If you don’t return a tenant deposit within that 35-day window, you might be liable for certain penalties. This might mean you need to pay the tenant double the original security deposit, as well as pay for attorney and court costs.

Can a Tenant Apply the Security Deposit Towards Last Month’s Rent?

No. Security deposits are meant to serve a different purpose than rent and it should be stated as such in the lease. The only exception to this is if both parties agree to such an arrangement in writing, for example, in a clause included in the written lease.

Bottom Line: Understanding Alabama Security Deposit Laws

Understanding the laws for tenant deposits in Alabama is incredibly important for all Alabama landlords as these laws form systems that govern how security deposits are used and when they should be returned.

If you have any further questions, please don’t hesitate to contact the expert property managers at Level Property Management Group.

Disclaimer: This blog isn’t a substitute for professional legal advice. Also, laws change, and this information may not be updated at the time you read it. For expert advice, kindly get in touch with Level Property Management Group. We’re a professional and knowledgeable property management company that has been operating for over 15 years.