Arizona Security Deposit Law: Deadlines & Penalties

Arizona landlords must return the security deposit, minus lawful deductions, within 14 days after the tenancy ends, the tenant returns possession and makes a demand. Those 14 days don't count Saturdays, Sundays or legal holidays, so in practice the deadline is roughly three weeks. Deductions are limited to unpaid rent and damage caused by the tenant beyond normal wear and tear.

The landlord must mail the tenant an itemized list of all deductions together with any amount being refunded, by first-class mail to the tenant's last known place of residence unless the tenant arranged otherwise in writing. If you don't dispute the deductions within 60 days after the list is mailed, the amounts become final. Tenants have the right to be present at the move-out inspection, and total deposits, including prepaid rent, are capped at one and a half months' rent.

If a landlord fails to follow these rules, the tenant may recover the money due plus damages equal to twice the amount wrongfully withheld. The small claims division of Arizona's justice courts hears disputes up to $5,000, not counting interest and costs. Neither side may be represented by counsel in small claims hearings.