Security Deposit Law
What Arizona landlords must do with security deposits — the cap, interest, return deadline, account rules, and penalties — with citations to the statute itself.
Verified as of June 11, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
1.5 months' rent maximum
Interest
No interest required
Return deadline
14 business days after move-out
Arizona caps what you can demand at one and one-half month's rent, and the cap counts prepaid rent toward the total. A tenant may voluntarily pay more, but you cannot require it.
Arizona's residential security deposit statute does not require landlords to pay or credit interest on deposits. The full deposit (less lawful deductions) is simply due back at move-out.
The clock runs from termination of the tenancy, delivery of possession, and demand by the tenant, and excludes Saturdays, Sundays, and legal holidays. You must provide an itemized list of all deductions plus any refund, mailed first class to the tenant's last known residence unless other arrangements are made in writing. If the tenant does not dispute the accounting within 60 days after mailing, it becomes valid and final.
Arizona does not require deposits to be held in a separate or escrow account. During the tenancy you may use refundable deposits in accordance with any applicable property management agreement, but all refundable deposits must be refunded under § 33-1321 at the end of the tenancy.
If you miss the 14-business-day itemization/refund requirement, the tenant can recover the property and money due plus damages equal to twice the amount wrongfully withheld. The statute also preserves any other damages either party is entitled to under the Arizona Residential Landlord and Tenant Act.
No city or county security deposit ordinances identified; Arizona regulates residential security deposits statewide under A.R.S. § 33-1321.
The cap covers "security, however denominated, including prepaid rent." Demanding a full deposit plus last month's rent that together exceed 1.5 months' rent violates the statute, unless the tenant volunteers the excess.
The purpose of every nonrefundable fee or deposit must be stated in writing. Any fee or deposit not designated as nonrefundable is refundable by law.
At move-in you must give the tenant a signed copy of the lease, a move-in form for noting existing damage, and written notice that the tenant may be present at the move-out inspection. On request, you must tell the tenant when that inspection will occur (with a narrow exception for material-and-irreparable-breach evictions where you reasonably fear violence).
If the tenant does not dispute the deductions within 60 days after you mail the itemized list and any amount due, the accounting is deemed valid and final and further tenant claims are waived. Mail first class to the last known residence to start this clock.
Whoever holds the landlord's interest in the premises when the tenancy ends is bound by § 33-1321. If you buy an occupied rental, you own the deposit-return duty even if the seller kept the cash.
The demand violates § 33-1321(A) because prepaid rent counts toward the cap; only voluntarily offered excess is allowed.
Any fee or deposit not designated as nonrefundable in writing is refundable, so you must return it at move-out.
The statute excludes Saturdays, Sundays, and legal holidays, but if you misread it the other way and miss the true deadline, the tenant can recover twice the amount wrongfully withheld.
You are out of compliance with § 33-1321(C), which undercuts your ability to defend damage deductions and exposes you in a deposit dispute.
Unless other arrangements are made in writing by the tenant, the statute requires first-class mail to the tenant's last known residence; improper delivery risks noncompliance with subsection D and the 60-day finality clock may not start.
No more than one and one-half month's rent, and that cap includes any prepaid rent you require (such as last month's rent). A tenant may voluntarily pay more, but you cannot demand it. (A.R.S. § 33-1321(A))
Fourteen days, excluding Saturdays, Sundays, and legal holidays, after the tenancy ends, the tenant delivers possession, and the tenant demands the deposit. You must send an itemized list of deductions plus any refund, by first-class mail to the tenant's last known residence unless the tenant agreed in writing to another arrangement. (A.R.S. § 33-1321(D))
The tenant can sue to recover the property and money due plus damages equal to twice the amount wrongfully withheld. Sending a timely, accurate itemization is much cheaper than litigating treble-like exposure. (A.R.S. § 33-1321(E))
Yes, but only if you state the purpose of the fee in writing and designate it as nonrefundable. Any fee or deposit not designated as nonrefundable in writing is refundable. (A.R.S. § 33-1321(B))
No. A.R.S. § 33-1321 requires neither interest nor a separate account. During the tenancy you may use refundable deposits consistent with your property management agreement, but everything refundable must be returned at move-out per the statute.
Yes. The tenant has 60 days after you mail the itemized list and any amount due to dispute it. If they do not, the accounting is deemed valid and final and further claims are waived — one more reason to mail the itemization properly. (A.R.S. § 33-1321(D))
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Statute facts on this page were verified against the cited official sources on June 11, 2026.
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