Arizona Security Deposit Law: Limits, Deadlines & Deductions

The cap counts prepaid rent

Arizona’s cap is broader than it first looks. Under A.R.S. § 33-1321, you can’t demand or receive security, however you label it, plus prepaid rent, worth more than one and a half months’ rent. A pet deposit, a key deposit and last month’s rent collected up front all count toward the total. A tenant can choose to prepay more rent on their own, but you can’t make it a condition of the lease.

At $1,600 rent, $2,400 is the ceiling. If you want last month’s rent at signing, that $1,600 uses most of it, leaving room for an $800 deposit. How the first month’s rent paid at signing fits into the cap is less clear-cut. Most landlords collect it as current rent, separately from the deposit, but if you plan to collect close to the limit, ask an Arizona attorney how to structure it.

Nonrefundable fees

Arizona allows nonrefundable fees, such as a cleaning fee or a pet fee, if the lease states the purpose of each one in writing. Spell it out: “Nonrefundable cleaning fee of $200, used for professional cleaning after move-out.” A fee with no stated purpose, or one the lease never calls nonrefundable, is likely to be treated as refundable deposit.

Don’t charge pet deposits or pet fees for service animals. For emotional support animals, HUD changed its federal guidance in 2025, so check current Arizona law before charging anything.

Move-in and move-out inspections

Give the tenant a move-in form to note existing damage, and tell them in writing that they have the right to be present at the move-out inspection. These two documents do most of the work if a deduction is ever challenged. Add dated photos of every room on move-in day.

The 14-day clock

Arizona’s deadline is short, and it starts only after three things happen:

1. The tenancy ends.
2. The tenant returns possession (keys back, belongings out).
3. The tenant demands the deposit.

From then, you have 14 days, excluding Saturdays, Sundays and legal holidays, to return the deposit with an itemized list of deductions. In calendar terms that’s usually close to three weeks. Treat a written forwarding address with a request for the deposit as the demand, and log the date.

There’s no interest requirement and no rule on what kind of account the deposit sits in, but keeping it separate makes the 14-day accounting faster.

Damage versus wear and tear in a desert climate

You can deduct unpaid rent and the cost of damage beyond normal wear and tear. Arizona’s sun and heat make the line worth thinking about:

• Usually wear and tear: UV-faded blinds and window coverings, dried-out weatherstripping, a hazy finish on a west-facing door, light wear on tile grout.
• Usually damage: a cracked sink from something dropped, pet-chewed door frames, a torn pool screen, a broken sprinkler head from a tenant’s car.
• Owed under the lease: unpaid rent, unpaid utilities the lease made the tenant’s responsibility, and a landscaping cost if the lease required yard care and it wasn’t done.

A worked example at $1,600 a month

You rent a Tucson single-family home for $1,600. At signing you collected the first month’s rent and a $2,000 deposit (under the $2,400 cap). The lease lists a $200 nonrefundable cleaning fee with its purpose stated.

The tenant hands in keys on Friday, May 29, and emails a forwarding address asking for the deposit the same afternoon. Counting only weekdays from Monday, June 1, and assuming no legal holiday falls in between, the 14th day is Thursday, June 18. Check the calendar for holidays and write down the exact date.

At the inspection, with the tenant present, you note:

• A pet-chewed door frame in the laundry room: $180 (handyman invoice)
• A broken sprinkler head and valve box: $95
• Faded blinds: $0, wear and tear
• Cleaning: $0 against the deposit, since the nonrefundable fee covers it

Total deductions: $275. You send an itemized list and a refund of $1,725 before the deadline.

The double-damages penalty

If you wrongfully withhold any part of the deposit, the tenant can recover the money owed plus damages of twice the amount wrongfully withheld. On the $275 above, an unsupported deduction could cost $275 plus $550.

This page is general information, not legal advice. For a contested deduction, check with an Arizona landlord-tenant attorney or your local justice court’s self-help resources.