Basics of Alabama's Security Deposit Law

Alabama landlords are legally allowed to collect security deposits from their tenants, but they must follow certain statewide laws regarding this deposit. All rental property owners in the state must understand and follow these laws in case there is a security deposit dispute in the future. Here are nine basics of Alabama’s security deposit law.

Maximum Security Deposit of One Month's Rent in Alabama

In the state of Alabama, landlords can charge a maximum security deposit equivalent to one month’s rent. Additional fees can be charged for pets, for changes to the unit and for situations that create an additional liability for the landlord.

Reasons You Can Keep a Tenant’s Security Deposit in Alabama

In the state of Alabama, a landlord can keep a tenant’s security deposit or a portion of the deposit for unpaid rent and damages in excess of normal wear and tear.

35 Days to Return Tenant's Security Deposit in Alabama

Alabama landlords must return a tenant’s security deposit within 35 days of tenant move-out.

Itemized Written Notice:
If a landlord has made any deductions from the tenant’s security deposit, the landlord must include an itemized written statement along with the portion of the tenant’s security deposit that is being returned. This statement must outline the nature of the damage as well as the approximate cost to repair it.

First Class Mail:
The landlord must send the tenant’s portion of the security deposit along with the itemized list, if necessary, by first class mail.

Forwarding Address:
The tenant is responsible for providing the landlord with a valid forwarding address, in writing, where the tenant’s security deposit and the itemized list, if necessary, can be sent. If the tenant fails to provide the landlord with a valid forwarding address, the landlord must send the deposit to the tenant’s last known address or lacking that, to the address of the rental property.

Tenant Forfeiture:
If the tenant does not claim their security deposit or cash the check for the deposit within 180 days, they forfeit their right to the deposit.

Do You Have to Charge All Tenants the Same Amount as a Security Deposit?

The security deposit does not have to be the same amount, but it has to be based on the same scale. Deposits cannot be more than the equivalent of one month’s rent, but if the monthly rent is different, then the amount of security deposit required will be as well.

For example, an apartment that rents for $1000 a month can only command a security deposit of $1000 while an apartment that rents for $1500 a month can command up to $1500 as the security deposit.

Security Deposits Not Required to Earn Interest in Alabama

Alabama does not have any specific requirements for how a landlord must store a tenant’s security deposit. A landlord is also not required to pay a tenant interest on their security deposit.

 Written Notice Not Required After Receipt of the Security Deposit in Alabama

A landlord is not required to provide a tenant with written notice after receiving the security deposit.

Walk-Through Inspection Not Required in Alabama

The state of Alabama does not require a walk-through inspection prior to tenant move-out.

New Buyer Responsible for Security Deposits if You Sell Your Property

If you sell your property, the buyer inherits the liability of returning the tenant’s security deposit, so it is his or her responsibility to make sure all tenants’ security deposits have been properly transferred to them. All buyers should make sure this is an included clause in the purchase contract.

What Happens to Landlords Who Fail to Follow Alabama’s Security Deposit Law?

Failure to adhere to Alabama’s security deposit law could result in the tenant receiving up to two times their security deposit plus any damages awarded by the court.

What Is Alabama’s Security Deposit Law?

For those interested in viewing the original text governing the security deposit in the state of Alabama, please consult Alabama Code §§ 35-9A-201 and 35-9A-301.