A security deposit is a one time payment that landlords require from tenants prior to moving in and beginning their tenancy. The security deposit provides a financial cushion against certain negligent tenant actions. It is important that you have a comprehensive lease agreement that outlines these expectations. 

An example of such an action is when Arkansas tenants causes damage during their tenancy that exceeds normal wear and tear. If the tenant moves out of your housing without fixing the damage, you may use part or all of their security deposit to cover the cost of repairs. If there is a lease violation or unpaid rent, the security deposit can help lessen your expenses. 

There are certain rules that landlords must abide by under Arkansas landlord-tenant law, which includes the collection and return of residents’ security deposit. Under the Arkansas landlord tenant laws, those rules are regulated under AR Code § 18-16-301 to 306. Failure to follow them can result in hefty financial repercussions. 

The following are answers to commonly asked questions regarding the Arkansas landlord tenant law, deposit laws, and a written lease agreement. 


Is there a deposit limit in the state of Arkansas? 

Some states have a law that states just how much a landlord can charge their tenant for a security deposit. The state of Arkansas is one of these states. As a landlord in Arkansas, the maximum security deposit you charge your residents living in your housing must be “reasonable”. 

Also, for landlords who own more than six housing rentals, the most you can charge your Arkansas tenants for a security deposit is 2 months’ rent. 


Do landlords in Arkansas have to provide their tenants with a deposit receipt? 

No, this isn’t a law in the state of Arkansas. Nevertheless, it is recommended for record-keeping purposes. 


Can landlords charge an additional pet deposit in the state of Arkansas? 

Yes, under state law, Arkansas landlords can ask for an additional pet deposit in the written lease agreement if they allow residents with pets in their rental unit. You may use the security deposit towards covering potential damages that your tenant’s pet can cause to the unit. 

pet deposit

A pet deposit is similar to a security deposit. In that, you must refund it back to Arkansas tenants at the end of the lease term. 

The Fair Housing Act, however, exempts residents with service animals from paying a pet deposit. In contrast, dogs that serve the purpose of providing emotional support or comfort do not quality as service animals. 


Are there exceptions to the Arkansas security deposit laws? 

Unlike most states, the Arkansas security deposit laws exempt landlords in certain situations. The Arkansas laws will not apply if both of the following requirements aren’t satisfied. 

  • The landlord owns less than 6 rental units. 
  • The landlord is self-managing their rental property. 


What deductions can a landlord make on a tenant’s security deposit? 

The following are the deductions that you can make on a tenant’s security deposit. 

  • If the tenant moves out and leaves unpaid rent or utility payments. 
  • If the tenant moves out without fixing damage exceeding normal wear and tear. 

The state of Arkansas defines “normal wear and tear” as the deterioration that occurs on the premises due to normal use. They are minor issues, such as loosening of the door handles, wearing out of the carpets, fading of the wall paint, or a few nail holes on the walls. They are generally regular maintenance and if the landlord fails to repair, the tenant will not want to lease long term. These are your responsibility to fix. 

Home repair

On the other hand, damage exceeding normal wear and tear occurs as a result of a tenant’s carelessness, negligence, or accident. These are major issues such as missing floorboards, a broken bathroom mirror, a ripped off door, or a missing tile.

These are your tenant’s responsibility to fix. If they move out without doing so, you can make appropriate deductions from their deposit. 


Can tenants in Arkansas use the security deposit to pay rent for the last month? 

Security deposits and rents serve two distinct purposes. One is payment for the regular use of the rental premises, while the other one is to provide a financial cushion against certain tenant negligent actions or make repairs. 

Be that as it may, there is one scenario in which tenants in Arkansas can use the deposit to pay rent for the last month. And that is if both you and your tenant agree to it in a written notice in the rental agreement. 


How must landlords in the state of Arkansas store their tenant’s security deposit? 

Some states dictate how landlords in those states must store their tenant’s security deposits. 

However, the state of Arkansas has no such requirements. There is neither the requirement to store the tenant’s security deposit in an escrow account nor to keep it separate from other funds. 


When must landlords return their tenant’s security deposits in Arkansas? 

Once your tenant has moved out, you must return their security deposit within a period of 60 days. If you have made deductions to the deposit, then you must send the portion of the remaining deposit alongside an itemized list of damages. You must send these to your tenant via first class mail. 

Security deposit

It’s your tenant’s responsibility to provide you with an address to send mail to. If they don’t, then they will have up to 180 days to lay claim to the deposit. After this period, the tenant will forfeit the deposit to the landlord. 

Under Arkansas law, landlords who fail to return their tenant’s deposit on time risk a number of repercussions. Including, forfeiting any right to keep any portion, as well as paying them damages and reasonable attorney fees in small claims court. 


What happens if the property ownership changes hands? 

If you sell your property or the property’s ownership otherwise changes hands, then the incoming landlord will inherit the liability regarding the use and return of the tenant’s deposit. 


Bottom Line

We’re a professional rental company in Fayetteville AR that provides comprehensive solutions to landlords. Get in touch to learn more! Keyrenter Arkansas can take on the responsibility of understanding and abiding to the security deposit law, the landlord tenant law, and drafting lease agreements so you don’t have to.

Disclaimer: This content isn’t a substitute for professional legal advice from a qualified attorney. Also, these rules may change and may not be updated at the time of your reading. For expert advice, Keyrenter Arkansas can help.