Overview
Security deposits play an essential role in Alabama’s rental agreements, providing landlords financial protection against damages or unpaid rent. However, Alabama law outlines strict rules regarding their collection, storage, and return to ensure fairness for both parties.
Under Alabama Code Title 35, Chapter 9A, landlords must adhere to specific security deposit regulations. Failure to comply with these laws can result in penalties, including potential forfeiture of the deposit.
This guide covers:
How much landlords can charge
Where deposits must be stored
Rules for returning security deposits
Penalties for non-compliance
Related Statute: Alabama Code § 35-9A-201, § 35-9A-204
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords cannot charge more than one month’s rent as a security deposit.
Exceptions: Additional deposits may be required for pets, alterations, or increased liability risks.
Storage requirements: Alabama law does not mandate landlords to hold security deposits in a separate or interest-bearing account.
Tenant notification: Alabama law does not require landlords to provide tenants with written notice about where the security deposit is held.
Law Reference: Alabama Code § 35-9A-201
2. Security Deposit Returns & Allowable Deductions
Return deadline: Landlords must return the full deposit within 60 days of move-out.
Permissible deductions: Landlords may withhold portions of the deposit for:
Unpaid rent
Damages beyond normal wear and tear
Costs associated with lease violations
What landlords cannot deduct:
Routine cleaning
General maintenance
Normal wear and tear (e.g., minor carpet wear, small nail holes)
Itemized statement required: If any portion of the deposit is withheld, the landlord must provide an itemized statement of deductions within 60 days.
Law Reference: Alabama Code § 35-9A-201
3. Interest Payments & Documentation Requirements
Interest payments: Alabama law does not require landlords to pay interest on security deposits.
Move-in condition report: Although not explicitly required by state law, providing a move-in inspection checklist is recommended to prevent disputes.
Tenant review period: Tenants should document the unit’s condition at move-in to ensure fair handling of the deposit.
Failure to provide documentation: Landlords who do not provide an itemized list of damages may be required to return the full deposit.
Law Reference: Alabama Code § 35-9A-201
4. Penalties for Mishandling Security Deposits
Alabama imposes penalties on landlords who fail to comply with security deposit laws:
Failure to return the deposit within 60 days → Landlord may owe double the amount wrongfully withheld
Failure to provide an itemized statement → Tenant may pursue legal action for full deposit recovery
Law Reference: Alabama Code § 35-9A-201, § 35-9A-204
Key Takeaways
Security deposits cannot exceed one month’s rent, except for specific situations.
Landlords do not have to store deposits in a separate account or pay interest.
Deposits must be returned within 60 days, with an itemized deduction statement if applicable.
Only specific deductions are allowed—normal wear and tear cannot be charged.
Non-compliance can result in double damages owed to tenants.
By understanding and following Alabama security deposit laws, landlords can avoid costly legal issues, and tenants can ensure their rights are protected.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
