Last Updated on October 21, 2023 by Kelvin Nielsen
AL Code § 35-9A-201 requires landlords who collect a security deposit to adhere to certain regulations. Such as, how much security deposit to collect, what deductions to make, and when to return the deposit back to the tenant.
As a landlord, collecting a security deposit from your tenant is key to safeguarding yourself against potential financial risks. The deposit can provide you a financial cushion, albeit to some extent, when your tenant:
- Moves out without clearing their rent payments.
- Moves out without clearing their utility bills.
- Causes damage exceeding normal wear and tear.
On your part, you must ensure that you abide by the Alabama security deposit law to the letter. Overcharging your tenant or wrongfully withholding their deposit could spell legal trouble for you.
The following is everything you need to know regarding the Alabama security deposit law.
What is the most you can charge as a security deposit in Alabama?
In the state of Alabama, you must not charge your tenant a deposit that exceeds the equivalent of one month’s rent. If the monthly rent is, say, $1,200, then the most you can ask as a security deposit must be $1,200.
There are some exceptions, though. You have a right to collect a separate deposit for pets, property alterations, or anything else that heightens your liability risks.
However, when charging a pet deposit, you must make an exemption for disabled tenants who use service animals. A service animal, unlike a pet, is meant to assist a person with a specific living situation.
What’s more, disability is a protected class under the Alabama Fair Housing Act. Other protected classes include religion, sex, race, color, nationality, and familial status.
What can a landlord deduct from a security deposit in Alabama?
As a landlord in Alabama, you have a right to make appropriate deductions from your tenant’s security deposit for two reasons. That is, unpaid rent and if they cause damage exceeding normal wear and tear.
What is Considered Normal Wear and Tear in Alabama?
Normal wear and tear refers to deterioration that occurs in a rental property due to normal, everyday use. They are minor issues such as:
- Loose door handles
- Gently worn carpets
- Stained bath fixtures
- Faded wall paint
- Lightly scratched glass
- Dirty grout
Damage, on the other hand, exceeds normal wear and tear. It occurs as a result of negligence, carelessness, abuse, or misuse. Examples include:
- Broken tiles
- Pet damage
- Broken windows
- Hole in the wall
As a landlord, you can only charge your tenant for damage exceeding normal wear and tear.
Can a landlord charge for carpet cleaning in Alabama?
According to the Department of Agriculture, Trade and Consumer Protection (ATCP), a landlord can only charge a tenant for carpet cleaning where there is “unusual damage” resulting from tenant abuse. For instance, if the carpet is ripped or is soaked in pet urine.
Other than that, it’d be unlawful for you to charge your tenant for routine carpet cleaning regardless of what the lease says.
How long do landlords have to return the security deposit in Alabama?
You have 35 days from the time your tenant leaves to return their portion of security deposit. If you’ve made deductions to their deposit, you must send the portion of the deposit alongside an itemized statement.
On the statement, you must outline the nature of the damage as well as the approximate repair costs.
Next, you must send the portion of the deposit alongside the itemized list to the tenant via first-class mail. It’s your tenant’s responsibility to provide you with a valid forwarding address. If they don’t provide you with an address, you must send the deposit to the tenant’s last known address. The tenant will have 180 days to claim the deposit. Failure to which, they would forfeit any rights to claim it.
Does a landlord have to store the deposit in an interest-earning account?
Some states require landlords to do this. That said, Alabama doesn’t have any specific requirements for how a landlord must store their tenant’s security deposit. As such, you have no obligation to pay your tenant any interest on their security deposit.
What happens if you fail to follow these guidelines?
If you fail to follow these guidelines, you may forfeit any right to withhold any portion of your tenant’s deposit. In addition, you may be liable to paying your tenant up to 2X the security deposit amount plus any court and attorney fees.
What happens if the property’s ownership changes hands?
If the property’s ownership changes hands, the incoming landlord will automatically inherit the responsibility of returning the tenant’s security deposit.
Disclosure: The content herein isn’t a substitute for advice from a professional attorney. It’s only meant to serve educational purposes. If you have a specific question, kindly seek expert attorney services.
Hi, I’m Kelvin Nielsen, an experienced landlord and accomplished real estate lawyer. My focus is on answering your questions about renting in the hopes of making your life as a renter or a landlord a bit easier.