Do you own at least 10 rental units? If so, you must abide by Georgia’s security deposit rules. You may also be subject to these rules if you hire a company to manage your properties on your behalf.
The following is a basic overview of Georgia’s security deposit laws for landlords.
Is There a Security Deposit Limit in Georgia?
No, there are Georgia security deposit limits or maximum security deposit amount. As a landlord, you can ask for any amount as a security deposit when a renter leases your rental property. However, you’ll want to be reasonable with the amount you charge. Overcharging or undercharging your tenants is never ideal. Generally, having your tenant pay either one or two month's rent for your rental units as security deposits should suffice.
Can Landlords Ask for an Additional Pet Deposit?
Yes, under Georgia law, a landlord may be able to ask for an additional pet deposit. However, people living with disabilities are exempt from paying any charges that arise from them keeping a service animal on your rental property.
According to the Fair Housing Act, tenants who use emotional support or service animals have an equal opportunity to use and enjoy their homes. Other protected classes in Georgia include race, color, nationality, religion, and familial status.
Do Landlords Have to Store a Security Deposit in a Particular Manner?
Yes, Georgia landlords are required to store their tenants’ security deposits in one of two ways.
One option is to store a tenant’s security deposit in an escrow account. Per Georgia law, escrow account must be in a bank or lending institution that’s either regulated by the state or federal government.
The other option is to post a surety bond for the full amount of the tenant security deposit, or $50,000, whichever is less. A landlord must post the surety bond at a superior court in the county where your property is located. You’ll serve as the bond’s principal.
If you fail to store the security deposit money in one of these manners, you may be liable and face certain penalties. This cost can include forfeiting the right to make any deductions to the tenant’s deposit.
Do Landlords Have to Provide a Security Deposit Receipt?
Yes, tenants in Georgia have a right to a written notice and/or receipt both before and after the landlord receives their security deposit.
Before receiving the security deposit, a landlord must provide their tenant with a list of all existing damage in the rental unit. Your tenant has a right to verify the accuracy of this list.
If the tenant agrees, both the landlord and their tenant must sign this document. The document will serve as proof of the rental property condition.
If the tenant doesn’t agree, they must state what exactly they disagree with and sign their statement.
After receiving the security deposit, the landlord must notify their tenant of this in writing. In the written notice, the landlord must state crucial details such as:
- The amount received
- When you received it
- How you’re storing it
If the landlord fails to make a reasonable effort and don't follow the aforementioned procedures, the landlord may forfeit their right to keep any portion of the security deposit when the tenant moves out.
Can Landlords Make Deductions to Tenant Security Deposits?
Yes, Georgia security deposit laws allow this. However, the deductions from a tenant deposit must be for valid reasons. The following include such reasons.
- If a tenant moves out with unpaid rent.
- If the tenant moves out and did not pay their utility bills.
- The tenant vacates the property and did not pay for or make repairs to the damages they are responsible for.
- In the event you suffer financial damage as a result of tenants abandoning the rental.
- If the tenant moves out without repairing damage exceeding normal wear and tear.
What Kinds of Security Deposit Deductions Aren’t Allowed?
The following are things that must not be covered using a tenant’s security deposit.
- Any existing damage that the tenant wasn’t responsible for.
- Damages arising from normal wear and tear. Examples of normal wear and tear include loose door handles, cracked grout on bathroom tiles, minimal carpet stains, and faded flooring.
Is There a Time Limit on Security Deposit Returns?
A landlord in Georgia must return security deposits within 30 days of the tenant moving out. If you intend to make any deductions to the deposit, then you must do the following.
- Conduct a home inspection within 3 days of the lease ending or the tenant moving out.
- During the inspection, complete an itemized list of deductions.
Your tenant may also request to inspect the unit in order to verify the claims. If they do, the following must be done.
- They must communicate their request within 5 days of moving out of the premises after the lease ends.
- If they agree with the itemized list, they must sign the document together with the landlord.
- If they dispute the claims, they must specify what they object to and then sign the document.
Within 30 days of the lease termination, you must provide your tenant the itemized list of deductions (if any) alongside the remaining portion of the security deposit in Georgia.
Wrongfully withholding your tenant’s deposit or failing to provide them the initial list of damage may bear financial consequences. For instance, there is a change you will forfeit all rights to withhold any portion of the deposit, among other things.
What Happens to the Security Deposit if the Landlord Sells the Property?
If you choose to sell your property, you must transfer the tenant’s full security deposit to the incoming owner or provide the tenant with a refund less any allowable deductions.
For expert help managing your investment property or to learn more about Georgia's Security Deposit Law, contact the Drew Doheny Property Management Team. We’re a full-service property management company that has ample experience in all areas of property management including navigating Georgia Landlord-Tenant Laws.
Get in touch with us to learn more!
Disclaimer: This blog is only meant to be informational and not a substitute for professional legal advice. Also, laws may change and this post may not be updated at the time you read it.