The biggest complaint Arizona Tenants Advocates gets from tenants, by far, is that landlords do not properly refund their security deposits. Sometimes landlords simply don’t give any of it back without explanation; more often, they give a list of deductions that encompasses most of the security deposit. It seems like they consciously try to figure out the balance of how little money they can return to the tenant to ameliorate him and prevent him from going after the rest of it in court, and then coming up with a list justifying the withholding of the balance.

Here is the general rule of security deposits. Under A.R.S. § 33-1321, a landlord may withhold from the security deposit: (1) unpaid rent; (2) actual damages caused by the tenant beyond normal wear and tear for which the landlord can demonstrate he incurred an expense in correcting; and (3) charges specified in the rental contract.  He cannot simply arbitrarily allocate a dollar amount to damages. . . say, $20.00 for a nail hole in the wall; or $50.00 for a dirty sink.  The landlord must demonstrate that the charges were actually incurred.  So, if the landlord did not, for example, perform the actual work of replacing the carpet, then the landlord has not incurred any carpet related expense and he may not withhold anything from the security deposit on that basis.

Moreover, subsection (D) of the above referenced statute (and other parts of the landlord/tenant act as well) requires the landlord to mitigate damages. This means that even if the tenant is responsible for a defective condition in the apartment, the landlord has a duty to correct it in such a way as to minimize the tenant’s exposure and expenses.  That is where the obligation to perform a joint move-out inspection comes into play, because part of the duty to mitigate involves the landlord providing the tenant an opportunity to reduce the damages suffered by, for example, performing repairs and cleaning using his or her own elbow grease.

It is also important to understand that even if you do damage an item, the landlord is only allowed to collect the depreciated value of that item. This means that if your dog urinated on the carpet but the carpet was three years old, it was substantially depreciated and the landlord arguably would only be entitled to recover a percentage of its replacement value in accordance with the reduced value. Landlords regularly charge tenants for new carpeting, new painting, etc., and that is wrong.  By doing so, they are, in effect, leaning on the tenants to underwrite the cost of improvements.

A.R.S. § 33-1321(D) also provides that the landlord must return the security deposit within 14 business days after you move. However, that 14 day period does not start until you serve him with a demand. Therefore, as soon as you get a new address you should immediately deliver a letter to the landlord demanding return of the security deposit. There are numerous ways to deliver the notice, be it by hand at a joint move-out inspection, by certified mail, or even by a process server.  If, within those 14 business days (hich is approximately three weeks), the landlord then does not return it or returns some of it but wrongly withholds a portion, then you can sue him for three times the wrongfully withheld amount. Join the Arizona Tenants Advocates and we will guide you through the process.

All of the above merely touches on the pertinent factors.  For more details, we highly recommend you read two articles in the Tenants Library section of our website: (1) Feeling Secure About Your Security Deposit; and (2) How To Refute Landlord Monetary Claims.

- Ken Volk -

June 3, 2015

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