In Alabama, landlords are legally allowed to collect up to the equivalency of one month’s rent for a security deposit. Landlords are free to choose how much they want to charge tenants to live in their homes or units, but they must establish amounts based on the same scale. For instance, if a landlord decides to charge one tenant one month’s rent for a security deposit, he or she must do the same for every tenant. If the landlord picks an arbitrary number, such as $500, he or she must stick with that arbitrary number regardless of the value of the unit being rented. Landlords also have the freedom to charge additional fees for pets, changes to the unit, and situations that may pose a liability to the landlord.

In addition to regulations regarding security deposit amounts, landlords must abide by other rules if they collect security deposits. At Cloud Willis & Ellis, our real estate attorneys advise business owners, including landlords, of their rights and responsibilities. Whether you are new to the rental business or you want to brush up on rental law, contact our team today to ensure you are compliant with Alabama landlord/tenant laws.

When You Can Keep a Tenant’s Security Deposit

In Alabama, there are only two reasons why a landlord may withhold a security deposit:

  1. The tenant failed to pay rent for any period of time he or she lived on the property; and
  2. The tenant caused damage that was in excess of wear and tear.

When it comes to unpaid rent, there is no question about what that means—the tenant either did or did not pay his or her rent. However, when it comes to wear and tear, “excessive” is objective. However, it is important to understand what is considered normal and what is considered damage.

“Normal wear and tear” refers to minor issues that are the result of everyday living. Stains on the carpet, dings in the wood, fading wall paint, loose door handles, dirty grout, stained bath fixtures, and even crayon markings on the wall are all examples of normal wear and tear. Mold is an example of normal wear if it is in a room that does not have proper ventilation, as establishing proper ventilation is the job of the landlord, not the tenant.

“Damage,” on the other hand, refers to destruction that a reasonable human being would not have accrued during his or her tenancy. This type of harm affects the value, normal function, or usefulness of the property. Damage is typically committed through neglect or on purpose. Some examples of damage are as follows:

  • A broken toilet seat;
  • A hole in the wall;
  • A smashed bathroom or closet mirror;
  • Missing fixtures or door handles;
  • Broken windows; and
  • Pet urine-soaked carpets.

Laws for Keeping and Returning a Tenant’s Security Deposit

If the tenant did not damage the property in any way, you must return the full security deposit within 60 days. You must send it via certified mail to the address provided to you by the tenant. If the tenant does not accept the deposit or cash the check within 180 days, he or she forfeits his or her rights to the money.

If you do plan to keep all or part of a tenant’s security deposit, you must make an itemized list of damages along with the portion of the tenant’s deposit he or she is owed. Your itemized list must include a detailed description of the damage as well as the approximate cost to repair it.

When a Landlord Fails to Abide by Deposit Laws 

If a landlord violates Alabama’s laws regarding security deposits, he or she may be forced to pay the tenant up to two times the value of the security deposit. The court may also choose to award the tenant additional damages.

You can keep up-to-date on Alabama’s deposit laws by referring periodically to Alabama Code, Title 35, Chapter 9A, or you can retain an Alabama real estate attorney who will do that for you and advise you on what you need to do to maintain compliance. If you want to focus more on your business and less on legalities, contact Cloud Willis & Ellis today.