Georgia Security Deposit Law

Maximum Security Deposit Amount

Maximum amount: According to Georgia security deposit law, landlords can charge up to 2 months’ rent, regardless of furnishings or the number of properties they own (OCGA § 44-7-30.1).

Pet deposits: Pet deposits can be charged to a tenant with pets as long as the deposit, when combined with the regular security deposit, doesn’t exceed 2 months’ rent. Per federal Fair Housing Act laws, pet rent or pet deposits cannot be charged for service animals or emotional support animals (ESAs).

Penalties: Georgia’s security deposit law isn’t specific about what happens when a landlord overcharges for security deposits. It states that landlords must return the overcharged amount or apply it to rent payments. However, statutory damages are possible depending on court rulings.

Handling Damage Deposits

Georgia landlords must handle the funds according to the law when collecting the security deposit.

Security deposit storage: In Georgia, security deposits must be stored in an escrow account at a federally insured financial institution, separate from the landlord’s other funds (OCGA § 44-7-31).

Interest-bearing account: State law doesn’t require landlords to store the funds in an interest-bearing account or pay the tenant interest on the deposit.

Receipt: While a receipt isn’t explicitly required, the landlord must give the tenant written documentation of where they deposited the funds, including the institution’s contact information (OCGA § 44-7-31).

Documentation: Before accepting the security deposit funds, landlords must provide tenants with a move-in checklist. This checklist allows the tenant to review the property’s condition at the beginning of the lease (OCGA § 44-7-33(a)).

Ownership transfer: Upon transfer of ownership, the previous owner must transfer the full deposit amount to the new owner.

Deductions

Georgia’s security deposit law allows landlords to deduct and use funds from the damage deposit to cover certain tenant-caused expenses. The law (OCGA § 44-7-34) is specific about the circumstances under which landlords can use the funds. They should take care to follow the law exactly.

Landlords can deduct for

Unpaid rent: Should a tenant leave the unit still owing rent payments, the landlord can use funds from the deposit to cover the debt. Landlords who use TurboTenant can easily stay on top of rent payments and collect rent online to limit the risk of late payments.

Damage beyond normal wear and tear: If a tenant damages the unit beyond what happens during everyday use, the damage can be repaired using funds from the deposit. Excessive damages include large holes in the walls, floors, and ceilings, unauthorized painting, torn or excessively stained carpet, missing appliances, or broken windows.

Excessive cleaning: Although some cleaning is expected when a tenant moves out, landlords can use funds to clean excessive filth or trash.

Non-payment of utilities: If the lease agreement requires the tenant to pay utilities, landlords may deduct any unpaid bills from the security deposit.

Smoking damage: If the lease prohibits smoking, any damage or odor caused by the tenant’s indoor smoking can be remediated using funds from the deposit.

Landlords cannot deduct for

Normal wear and tear: Landlords are not allowed to use funds from the deposit to remedy minor issues throughout the property. Those include nail holes, scuffed baseboards, marks on walls, faded paint, or worn carpet.

Routine property maintenance or improvements: If a landlord makes improvements or performs routine maintenance on the property after a tenant has moved out, this is not a valid reason to deduct it from the security deposit.

Damage listed on the move-in checklist: If a tenant flagged an issue on the move-in checklist and both parties signed it, the landlord cannot fix the issue using funds from the security deposit.

Return Timeline

Timeframe: Security deposits must be returned within 30 days of the after a lease ends. If the landlord is unable to find the tenant and the last known address of the tenant returns the letter undelivered, the landlord may keep the funds after 90 days (OCGA § 44-7-34).

Deduction tracking: If the landlord withholds funds from the deposit when the tenant has moved out, they must provide the tenant an itemized list of the deductions. Landlords should list each charge and its amount separately (OCGA § 44-7-34).

Itemized deduction notification: The itemized list and the remaining funds should be delivered to the tenant by first-class mail, ideally with tracking, to the address provided by the tenant. The funds can also be delivered by check, direct deposit, or any method that both parties agree to.

Penalties: If a landlord doesn’t follow Georgia security deposit law and mismanages the deposit by deducting for things that aren’t allowed or returning the deposit late, they could forfeit the right to withhold funds or owe the tenant three times the amount of the original deposit (OCGA § 44-7-35).

Handling Disputes

While no landlord hopes for a dispute to arise after a tenant has moved out, it’s possible that a tenant could challenge your deductions from the deposit. Maintaining clear communication and storing all records is a great way to protect yourself should you find yourself in a dispute.

Move-in/move-out checklist: A move-in checklist form is a great way to stay on the same page with your tenant. It ensures all parties fully understand the condition of a property when the tenant moves in. Taking clear and detailed photographs is a great way to add to the move-in checklist and provide an unambiguous view of the property at a moment in time.

Tenant challenge: If a tenant challenges your deductions, respond within 30 days to the challenge with as much information as you can. Include copies of the move-in checklist and any photographs you may have. You could offer a walk-through (in-person or virtual) to show the tenant your side of the story, or even offer a partial refund if you feel the tenant may be justified in their complaint. Either way, document everything at every step to protect yourself if the tenant decides to escalate the situation and file a lawsuit. If you follow Georgia’s security deposit law to the letter, you should be in good shape.