Under landlord-tenant laws, an Arkansas landlord may collect security deposits from tenants. In fact, requiring a tenant to pay a security deposit can significantly enhance a landlord's management strategy, ensuring a win-win situation for both landlords and tenants. It's not just about financial security for a landlord; it's about building trust and fostering a transparent relationship.

As a landlord, you also need to protect your investment in the case of damage, a tenant who doesn't pay rent, or lease termination. Understanding these laws can help a landlord avoid small claims court.

In this blog post, we'll delve into the ins and outs of security deposit laws in Arkansas, shedding light on how they protect an investment while offering tenants the peace of mind they deserve during the lease agreement.

From addressing damage to clarifying refund expectations, let's explore how understanding the Arkansas security deposit law can cushion a landlord against potential financial losses that can arise from the following scenarios:

  • A tenant who moves out without paying off their utility bills.
  • A tenant whose vacated unit needs additional cleaning.
  • A tenant who terminates their lease agreement with remaining unpaid rent.
  • A tenant who abandons the rental.
  • A tenant who causes damage exceeding normal wear and tear.

Arkansas law, however, requires any landlord who asks for a security deposit from tenants to abide by certain rules. The following is everything a landlord needs to know in this regard:

Security Deposit Deductions

Arkansas law allows every landlord to deduct the following from a renter’s security deposit.

Unpaid Rent and Late Fees

If a tenant moves out of the unit owned by the landlord and does not pay rent, then the landlord can make appropriate deductions on their deposit.

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Damage Exceeding Normal Wear and Tear

Most written leases require tenants to return the property in the same condition they received it in, excluding normal wear and tear by the end of the tenancy. A tenant may think they have left their rental in great condition but the landlord may feel differently.

The difference between damage and normal wear and tear is often a source of conflict between a landlord and renters. Therefore, it’s important to know the differences between the two types of damage.

Normal wear and tear is the expected type of damage that occurs when a rental unit is used in a normal way. Examples include:

  • Faded walls
  • Gently worn carpets
  • Stained bath fixtures
  • Loose door handles
  • Lightly dirtied grout

Damage, on the other hand, occurs as a result of negligence by a tenant during their residency. Examples of this type of damage include:

  • Missing fixtures
  • Broken tiles
  • Broken windows
  • A damaged door or hinge
  • A burned or torn carpet

Security Deposit as Last Month’s Rent

While state law doesn't explicitly prohibit a landlord from utilizing the security deposit as the final month's rent, it's worth considering if the landlord wants to incorporate a clause in the written lease agreement to address this possibility.

Maximum Security Deposit Amount

In Arkansas, there is a maximum limit on the amount a landlord can charge a tenant as a security deposit. The amount must not exceed the equivalent of two months’ rent. If the landlord charges renters a monthly rental price of, say, $1,200, then the maximum security deposit they can charge them is $2,400.

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Non-Refundable Security Deposit

In the state of Arkansas, it's important to note that non-refundable security deposits are prohibited by law. A landlord is required to refund all security deposits they collect from renters, deducting any necessary costs.

Pet Deposits

Arkansas law allows a landlord to charge renters a pet deposit, however, the amount must not exceed the state’s limit. The pet deposit must also comply with the Arkansas and federal Fair Housing Act.

The law prohibits landlords from charging renters with disabilities who use a service animal an extra deposit. A tenant with a service animal does not have to pay the cost of a pet deposit.

Storage of Tenants’ Security Deposits

In Arkansas, the law doesn't impose any specific requirements on how landlords must store renters' deposit money. This means the landlord has the flexibility to choose how to manage the money during the lease, whether it's in a standard account, a separate account, or even an interest-bearing account.

However, in some states, landlords must store the security deposit in a designated bank account.

Returning a Security Deposit

After the lease or rent agreement concludes and the tenant vacates the property, Arkansas law stipulates a 90-day window for landlords to return the tenant's security deposit via first class mail. If the landlord intends to make a deduction, then the landlord must provide their renter with a written notice of an itemized list as well.

The tenant has the responsibility to provide the landlord with their forwarding address. If the tenant fails to do so, then the security deposit becomes yours after 180 days.

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Frequently Asked Questions About an Arkansas Security Deposit

Do Landlords Owe Interest on a Security Deposit in Arkansas?

No! Unlike some other states like Tennessee and New Jersey, landlords don’t have to store renters’ deposits in interest-bearing accounts.

Can a Landlord Charge for Damaged Wall Painting in Arkansas?

As previously stated, landlords can charge deductions for damages exceeding normal wear and tear. Examples of excessive damage include deep scratches, stains, and water damage.

It's worth noting, though, that charging Arkansas tenants for damages like minor scrapes, minor cracks, or the natural fading of paint isn't permissible. In such cases, the responsibility for covering the repair expenses is your responsibility.

Can a Landlord in Arkansas Charge a Cleaning Fee?

Yes, especially if the Arkansas tenant fails to complete their deep-cleaning responsibilities as outlined in the move-out checklist or written lease agreement.

Can a Landlord Charge for Nail Holes in Arkansas?

Yes, you may be able to charge a tenant for any wall damage including multiple nail holes, and large holes from drilling. That said, renters have a right to use the walls to hang posters and pictures.

Can Landlords in Arkansas Charge Tenants for Carpet Replacement?

Yes, you may be able to charge tenants for carpet replacement if the damage goes beyond normal wear and tear.

Bottom Line

As a landlord, understanding the state’s security deposit laws is imperative for success. You should also remain informed for the legal eviction process in Arkansas and any other local laws and regulations to ensure that your rental business remains complaint, and you can avoid small claims court.

Keeping track of all necessary laws is vital to protecting your investment property. If you have a question or need expert help in the management of your Arkansas property, then look no further than Pro X Property Management - Bentonville AR. Get in touch to learn more about our full-service property management company.

Disclaimer: Please note that the information provided in this blog is intended for general guidance and should not be considered as a replacement for professional legal advice. It is important to be aware that laws pertaining to property management may change, rendering this information outdated by the time you read it.