What is the maximum security deposit allowed under Arizona law?

In Arizona, the law stipulates that the maximum security deposit a landlord can collect from a tenant is 1.5 times the monthly rent for a residential lease. This limitation is designed to provide a balance between protecting landlords’ interests in ensuring that they can cover potential damages or unpaid rent while also safeguarding tenants from excessive upfront costs. It prevents landlords from demanding large sums that could be burdensome to tenants at the time of lease agreement.

Understanding the legal framework surrounding security deposits is crucial for both landlords and tenants, as it sets clear expectations on what is permissible in lease agreements. Collecting more than this cap could expose landlords to legal challenges and might result in invalidating certain terms of the lease. This 1.5 times maximum on the deposit is specifically codified in Arizona Revised Statutes § 33-1321, reinforcing its importance in the leasing process.