Arizona Security Deposit Deductions: What a Landlord Can Keep and Must Itemize

By the FigureMyTax Editorial Team · How we calculate

Arizona lets a landlord apply a deposit to unpaid rent, charges in the signed lease and damages the tenant caused, subject to a duty to mitigate. Here is what the statute allows and what the itemized list has to do.

What can an Arizona landlord deduct from a deposit?

On termination of the tenancy, property or money held as prepaid rent and security may be applied to the payment of all rent and, subject to the landlord’s duty to mitigate, all charges specified in the signed lease agreement or provided in the chapter, including the damages the landlord has suffered by reason of the tenant’s noncompliance with section 33-1341 (A.R.S. 33-1321(D)). Three buckets, then: unpaid rent, charges that the signed lease or the chapter provides for, and damages from breaking the tenant’s duties.

What are the tenant’s duties in section 33-1341?

The tenant must comply with building code obligations affecting health and safety; keep the occupied premises as clean and safe as their condition permits; dispose of waste in a clean and safe manner; keep plumbing fixtures as clean as their condition permits; use electrical, plumbing and other facilities in a reasonable manner; not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises; conduct themselves so as not to disturb neighbors; and promptly notify the landlord in writing of any situation requiring repairs (33-1341). Damage from deliberate or negligent acts fits the statute; the text does not describe ordinary aging as noncompliance.

What does the landlord’s duty to mitigate mean here?

The statute makes the application of charges subject to the landlord’s duty to mitigate. The duty to mitigate generally means taking reasonable steps to limit a loss, so a landlord should be able to show what it actually spent. Keep invoices and receipts, and compare each line with the signed lease.

What must the itemized list look like?

It must be an itemized list of all deductions together with the amount due and payable to the tenant, if any (33-1321(D)). The statute does not prescribe line items, but each deduction should be named with its amount so that the tenant can dispute it within the 60 days. See the 14-day deadline.

What about nonrefundable fees and deposits?

The purpose of all nonrefundable fees or deposits must be stated in writing by the landlord, and any fee or deposit not designated as nonrefundable is refundable (33-1321(B)). A landlord therefore cannot keep a charge that it never labeled nonrefundable; it must account for it in the deposit return. Compare the lease with the itemized list.

Can a landlord recover more than the deposit?

Yes. The section does not preclude either side from recovering other damages to which it may be entitled under the chapter (33-1321(F)), and the landlord may recover reasonable damages resulting from the tenant’s noncompliance, court costs and reasonable attorney fees (A.R.S. 33-1368(C)).

A checklist for tenants

Compare the itemized list with the signed lease and the move-in form; ask for invoices behind each charge; photograph the unit when you hand it back; and put any dispute in writing within 60 days after the list and amount are mailed, because after that the amounts are deemed valid and final (33-1321(D)).

A checklist for landlords

Itemize each deduction with its amount; keep receipts and invoices; limit charges to rent, the charges in the signed lease or the chapter and damages from the tenant’s noncompliance; account for any fee not designated nonrefundable; mail the list by first class mail to the last known residence within the 14 days; and keep proof of mailing.

Frequently asked questions

Official sources

• A.R.S. 33-1321: security deposits
• A.R.S. 33-1341: tenant to maintain dwelling unit
• A.R.S. 33-1368: noncompliance by the tenant; landlord damages and fees

This is general information, not legal advice. It is based on the cited Arizona statutes, rules and court opinions, and every case turns on its own facts. Confirm how the law applies to your situation with a licensed Arizona attorney.