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In Alabama, the laws governing the tenant's deposit are covered by AL Code 35-9A-201. All parties to a leasing arrangement are to be protected by these laws.
THE MAXIMUM AMOUNT OF SECURITY DEPOSIT
A security deposit in Alabama cannot be greater than one month's rent.
Pet deposits, deposits for correcting the renter's changes, and deposits for tenant actions that increase liability risks are not included in this deposit, nevertheless—35-9A-201 of the Alabama Code (2022).
SECURITY DEPOSIT DEDUCTIONS
The following items may be subtracted from security deposits in Alabama:
"Normal wear and tear" is the term used to describe the gradual deterioration of a property brought on by regular use over time. This type of wear and tear is expected and considered acceptable.
On the other hand, "damage" refers to any intentional or accidental destruction or alteration of the property. Landlords may require tenants to pay for repairs or replace items damaged by something other than normal wear and tear.
Typical wear and tear examples:
Damages examples:
Note that some types of damage may also be considered criminal acts and may result in legal consequences.
RETURN OF SECURITY DEPOSIT
Alabama landlords have 60 days from the end of the lease term and the tenant's departure from the rental unit to return any outstanding amount of the security deposit.
TAXES AND SECURITY DEPOSITS
Security deposits are not typically tax deductible for landlords or tenants. This is because security deposits are not considered income for landlords, and tenants cannot claim them as a tax deduction. However, suppose a landlord utilizes a portion of the security deposit to settle delinquent rent or to repair property damage beyond normal wear and tear. In that case, the landlord's expenses may be tax deductible. It is recommended that landlords and tenants consult with a tax professional or legal expert for advice on any tax implications related to security deposits.
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