Overview
Arkansas security deposit laws are governed by Arkansas Code Title 18, Chapter 16, Subchapter 3. Arkansas provides moderate deposit limits and a 60-day return deadline, with potential double damages for willful violations. A security deposit compliance platform helps landlords avoid these penalties.
Important: These security deposit statutes do not apply to landlords who own five (5) or fewer dwelling units, among other exceptions.
Maximum Security Deposit
Under Arkansas Code § 18-16-304, security deposit limits vary by unit type:
- Unfurnished units: Maximum of 2 months' rent
- Furnished units: Maximum of 3 months' rent
The limits apply to the total security deposit amount, regardless of what it's called (security deposit, damage deposit, cleaning deposit, etc.).
Return Timeline
Under Arkansas Code § 18-16-305, landlords must return the security deposit within 60 days of the termination of tenancy.
- The landlord must provide a written, itemized list of any deductions
- Compliance is satisfied by mailing via first class mail to the tenant's last known address
Unclaimed Deposits
If the deposit is returned by mail and the landlord cannot locate the tenant after reasonable effort, the payment becomes the property of the landlord 180 days from the date it was mailed.
Interest Requirements
Arkansas does not require landlords to pay interest on security deposits.
Storage Requirements
Arkansas law does not require landlords to: (Oklahoma follows a similar approach—see Oklahoma security deposit laws.)
- Hold deposits in a separate account
- Use an interest-bearing account
- Disclose where the deposit is being held
Allowable Deductions
Landlords may deduct from the security deposit for:
- Accrued unpaid rent
- Damages beyond normal wear and tear
- Other charges permitted under the lease agreement
Arkansas law requires an itemized written list of deductions but does not require receipts, invoices, or other supporting documentation.
Penalties for Non-Compliance
If an Arkansas landlord fails to return the security deposit or provide an itemized list within 60 days:
- The landlord may lose the right to keep any portion of the deposit
- Courts may award up to double the amount wrongfully withheld when a landlord willfully violates the statute
- Reasonable attorney fees may also be awarded to the prevailing tenant
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. Schedule a demo to learn how Passive automates this workflow.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.