Arkansas Security Deposit Law: Two-Month Cap, 60-Day Return

Under Ark. Code § 18-16-304, a landlord may not demand or receive a security deposit "in an amount or value in excess of two (2) months periodic rent." Section 18-16-305 requires that, within 60 days of termination of the tenancy and delivery of possession, the landlord return the deposit, less any amounts applied to accrued unpaid rent and damages from the tenant's noncompliance with the rental agreement, all itemized in a written notice delivered to the tenant. Mailing the notice and any refund by first-class mail to the tenant's last known address satisfies this duty. Notably, § 18-16-303 exempts a landlord who, with their spouse, minor children, and related entities, owns five or fewer dwelling units, unless management or rent collection is performed by a third party for a fee.

If a landlord wrongfully withholds a deposit or fails to provide the itemized notice within 60 days, Ark. Code § 18-16-306 lets the tenant recover the property and money due, damages equal to two (2) times the amount wrongfully withheld, court costs, and reasonable attorney's fees.