Arizona security deposit rules: limit, return deadline and deductions

The limit: one and a half months’ rent

Section 33-1321(A) says a landlord shall not demand or receive security, however denominated, including prepaid rent, in an amount or value of more than one and one-half month’s rent. The label on the money doesn’t matter. A pet deposit, a key deposit and prepaid rent all count toward the same limit.

Example: on rent of $1,600 a month, the limit is $1,600 × 1.5 = $2,400. A $1,600 security deposit plus $800 of prepaid rent reaches it exactly.

The limit is on what the landlord asks for. The same subsection says it doesn’t prohibit a tenant from voluntarily paying more than one and a half months’ rent in advance.

Maximum

Security, however denominated, including prepaid rent, of no more than one and a half months’ rent. A.R.S. § 33-1321(A)

Voluntary prepayment

A tenant may voluntarily pay more than one and a half months’ rent in advance. A.R.S. § 33-1321(A)

What counts as security

Money or property given to assure payment or performance under a rental agreement. The definition says security does not include a reasonable charge for redecorating or cleaning. A.R.S. § 33-1310(15)

Interest

The section doesn’t require it. A.R.S. § 33-1321

How it’s held

The section names no special account or bond. During the tenancy the landlord may use refundable deposits in accordance with any applicable provisions of the property management agreement. At the end, all refundable deposits are refunded under this section (subsection G). A.R.S. § 33-1321

Nonrefundable fees and the move-in paperwork

Arizona allows nonrefundable fees and deposits, with one condition: the landlord states the purpose of each in writing. Any fee or deposit not designated as nonrefundable is refundable.

On move in, the statute lists three things the landlord furnishes to the tenant: a signed copy of the lease, a move-in form for specifying any existing damages to the dwelling unit, and written notification that the tenant may be present at the move-out inspection.

Nonrefundable fees or deposits

The purpose of each is stated in writing by the landlord. Any fee or deposit not designated as nonrefundable is refundable. A.R.S. § 33-1321(B)

At move in

A signed copy of the lease, a move-in form for existing damages, and written notification that the tenant may be present at the move-out inspection. A.R.S. § 33-1321(C)

Move-out inspection

On request by the tenant, the landlord notifies the tenant when the move-out inspection will occur. There is no obligation to hold a joint inspection when the tenant is being evicted for a material and irreparable breach and the landlord has reasonable cause to fear violence or intimidation by the tenant. A.R.S. § 33-1321(C)

The 14-day deadline and how to count it

The 14 days start after three things have happened: the tenancy has terminated, the tenant has delivered possession, and the tenant has demanded the deposit. Delivery of possession is defined as returning the dwelling unit keys to the landlord and vacating the premises. The section doesn’t say what form the tenant’s demand takes.

Saturdays, Sundays and other legal holidays are left out of the count. Example: the lease ends on February 28, 2026, and the tenant returns the keys and asks for the deposit on Monday, March 2, 2026. Counting 14 weekdays from March 3 puts the deadline on Friday, March 20, 2026. A legal holiday inside that stretch would push it one more business day.

Section 33-1321 doesn’t list the legal holidays. Arizona’s holidays are listed in A.R.S. § 1-301.

Deadline

Within 14 days, excluding Saturdays, Sundays or other legal holidays. A.R.S. § 33-1321(D)

Starting point

After termination of the tenancy, delivery of possession and demand by the tenant. A.R.S. § 33-1321(D)

Delivery of possession

Returning dwelling unit keys to the landlord and vacating the premises. A.R.S. § 33-1310(3)

What is due

An itemized list of all deductions together with the amount due and payable to the tenant, if any. A.R.S. § 33-1321(D)

Arizona holidays

The state’s holidays are listed in a separate statute. A.R.S. § 1-301

What can be deducted, and where the list goes

When the tenancy ends, prepaid rent and security may be applied to all rent and, subject to the landlord’s duty to mitigate, to all charges specified in the signed lease agreement or provided in the Residential Landlord and Tenant Act. That includes damages the landlord suffered because the tenant didn’t meet the tenant duties in § 33-1341, such as keeping the unit clean and safe and not deliberately or negligently damaging the premises.

Section 33-1321 doesn’t use the words “wear and tear.” It ties damage deductions to the tenant’s noncompliance with § 33-1341.

Example: on a $2,400 deposit with $350 of unpaid rent and $250 to repair a door the tenant broke, the list shows both lines, $600 in total, and the amount due to the tenant is $1,800. Unless the tenant makes other arrangements in writing, the list and the money are mailed by first-class mail to the tenant’s last known place of residence.

Allowed deductions

All rent and, subject to the landlord’s duty to mitigate, all charges specified in the signed lease agreement or provided in the chapter. Includes the damages the landlord suffered by reason of the tenant’s noncompliance with § 33-1341. A.R.S. § 33-1321(D)

Tenant duties behind damage claims

Among them: keep the occupied premises as clean and safe as their condition permits, and not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises. A.R.S. § 33-1341(2), (6)

Delivery

Mailed to the tenant’s last known place of residence, unless the tenant makes other arrangements in writing. The itemized list and any amount due go together. A.R.S. § 33-1321(D)

Tenant’s 60 days

If the tenant doesn’t dispute the deductions or the amount due within 60 days after the list and amount due are mailed, the amount is deemed valid and final. Any further claims of the tenant are waived. A.R.S. § 33-1321(D)

Penalty for wrongfully keeping a deposit

If the landlord fails to comply with subsection D, the tenant may recover the property and money due together with damages equal to twice the amount wrongfully withheld. The subsection has no bad-faith test written into it.

Example: a landlord wrongfully withholds $500 of a deposit. The tenant may recover the $500 plus damages of 2 × $500 = $1,000, which is $1,500 in all. The section also says it doesn’t stop either side from recovering other damages allowed under the Act.

A sale doesn’t end the duty. Whoever holds the landlord’s interest in the premises when the tenancy terminates is bound by the section.

Damages

The property and money due the tenant, together with damages in an amount equal to twice the amount wrongfully withheld. A.R.S. § 33-1321(E)

Other damages

The section doesn’t preclude the landlord or the tenant from recovering other damages under the chapter. A.R.S. § 33-1321(F)

New owner

The holder of the landlord’s interest in the premises at the time the tenancy terminates is bound by the section. A.R.S. § 33-1321(H)

No waiver in the lease

A rental agreement can’t provide that the tenant agrees to waive or forego rights or remedies under the chapter. A prohibited provision is unenforceable. A.R.S. § 33-1315(A)(1)

Rentals this page doesn’t cover

This page covers ordinary residential rentals under the Arizona Residential Landlord and Tenant Act. Spaces in mobile home parks follow a separate act with its own deposit section: a two months’ rent limit, at least 5% annual interest and a 14-day return.

The Act lists arrangements it doesn’t cover, including public housing, transient stays in a hotel, motel or recreational lodging, and occupancy under a contract of sale. Subsidized housing programs can add deposit rules of their own, and cities can add local requirements.

Mobile home park spaces

Prepaid rent as security limited to two months’ rent, with not less than 5% annual interest on deposits and return within 14 days. A rented mobile home itself counts as a dwelling unit under the Residential Landlord and Tenant Act (§ 33-1310(4)). A.R.S. § 33-1431(A) to (C)

Arrangements outside the Act

Public housing, transient occupancy in a hotel, motel or recreational lodging, and occupancy under a contract of sale are among those listed. A.R.S. § 33-1308