Georgia Security Deposit Laws for 2024 | Deductions, Returns, & Rights

All the Georgia security deposit laws are regulated under the Georgia Code, Title 44. Both landlords and tenants must comply with these regulations in order to ensure a better leasing experience according to Georgia law.

The following page will cover the Georgia security deposit law for rental units. It's important for landlords in this state to consider all of the regulations stated below before signing a lease agreement with a prospective tenant.

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Now, let’s dive in. 

Overview

• Maximum Charge - There's no established limit
• Return Deadline - Up to 30 days from the date the tenant moves out of the rental property.
• Return Penalty - Up to three times the security deposit plus attorney's fees.
• Allowed Deductions - Unpaid rent, unpaid pet fees, unpaid utilities, and damages that exceed normal wear and tear.

Maximum Deposit

Georgia security deposit limits are fairly easy to understand. First, it's vital to note that there's no statutory limit on security deposits. This means that Georgia landlords don't have a particular limit regarding what they can charge their tenant for the security deposit.

Before we dive deeper into the Georgia security deposit law, let's consider that all the rules that will get explained below, except those who discuss deposit returns, don't apply if the landlord meets the following conditions:

• They own 10 or fewer rental units in total.
• They're a natural person.
• They don't use management services for their rental property.

Remember that the deadline requirements in Georgia's security deposit law still apply to the landlord, even if they meet one or all of the statements mentioned above.

Pet Deposits

While it's not mandated by Georgia's security deposit laws, landlords can ask for additional pet deposits, unless they're dealing with people with disabilities that use emotional support or service animals.

People with disabilities are entitled to equal housing, so landlords cannot charge extra for service animals. However, if the service animal causes any kind of damage to the rental unit, the tenant will have to pay for these damages with a portion or the full security deposit.

Escrow Account

Yes. You need to place the deposit on an escrow account in any bank or lending institution regulated by the United States Government or the Georgia state (also referred to as a "federally regulated depository"). We'll cover more of this information further on this page.

Allowable Deductions

Security deposits in Georgia can get used to cover particular factors that count as "Damage." According to the state's security deposit laws, you can use the deposit to cover:

• Unpaid rent, utility bills, or pet fees.
• Cost of repairs for damages that exceed normal wear and tear.
• Any damage suffered by the property manager due to the tenant's abandonment of the rental property.

Keep in mind that, in order for you to use the tenant's security deposit to cover damages, you must meet two requirements:

• The damage must exceed regular wear and tear.
• The damage wasn't included in the original lease as "existing damage."

Moreover, landlords who own 10 or fewer rental units don't have to include a list of preexisting damage.

Difference Between "Damage" and "Normal Wear and Tear"

If a landlord attempts to use the tenant's security deposit to cover regular damages, then they could get exposed to legal claims from the tenant. Let's cover the difference between "Damage" and "Regular Wear and Tear."

Overall, damage is anything that resulted from the tenant's abuse or negligence and damaged the property in a significant way. If the damage impacted the property's value or function negatively, the landlord can use the deposit to cover everything.

"Damage" includes:

• Heavily ripped or stained carpets
• Broken or cracked tiles
• Broken windows
• Mixing fixtures

On the other hand, regular wear and tear is the amount of damage the property gets due to prolonged usage. As long as the deterioration of the property didn't happen due to negligence or abuse, the landlord cannot use the security deposit to cover damages.

Wear and tear includes:

• Fading paint
• Loose handles
• Worn carpets
• Stained fixtures

Holding Requirements

As mentioned before, the landlord must save the tenant's security deposit in an escrow account located in a federally regulated depository or state account. Moreover, they must notify the tenant about the location of this deposit.

The second option for landlords is to post a surety bond, either for the amount of the complete security deposit or $50,000, whichever is lower.

Landlords and tenants must work with an authorized surety company, and the surety bond should get posted with the local Clerk of the Superior Court, who will charge a $5.00 fee for filing and recording the bond.

It's important to note that if the landlord doesn't comply with these holding rules, they will lose the right to withhold the tenant's security deposit in any way, according to Georgia law.

Tenant's Deposit

Landlords aren't required to pay interest on a security deposit, according to Georgia law. On the other hand, they're not required to provide the tenant with any receipts for the security deposit, which gives landlords more freedom.

Returning

Every Georgia landlord has up to 30 days from the day the tenant left the property to return the deposit with an itemized list of deductions via first-class mail.

Landlords must inspect the unit within three business days after the lease ends if they want to make the itemized list of damages. Moreover, the tenant will get required to inspect the property within five business days to verify that the items mentioned are there.

If the tenant agrees to the mentioned damages, the list will get approved as evidence of damages, and the landlord will be able to use the security deposit to cover the damages. On the other hand, if the tenant wants to dispute some (or all) of the damages, they must specify each item and request a court proceeding.

Remember, if the landlord doesn't provide an itemized list of damages, they won't be able to withhold any part of the security deposit. Moreover, if the landlord fails to return the security deposit within the specified time frame, they could get charged with up to three times the requested amount for the security deposit, as well as attorney fees.

In case the landlord proves that the refusal to return the deposit happened due to a mistake that was not their fault, they may only have to pay for the withheld amount.

Finally, if the tenant doesn't respond to the written notice to return the security deposit, and the landlord fails to locate them after reasonable effort, they will legally forfeit it. After 90 days, the security deposit will become the landlord's property, and the tenant will not be able to dispute it.

Tax Filing

Depending on whether the landlord will keep the security deposit or not, they may have to report it as taxable income.

As long as the landlord has the responsibility of returning the security deposit, the IRS won't count it as taxable income. Deposits become taxable income for the landlord once the landlord doesn't have to return them anymore (meaning the tenant forfeited it).

Here are some scenarios where you would need to report your security deposit as income:

• Any security deposit amount that got forfeited due to a lease breach or unpaid fees must get declared as taxable income in the year it was applied.
• Any security deposit amount that gets used to cover repair expenses must get reported as income. On the other hand, if the landlord doesn't include the repairs as expenses, they don't need to report them as income.
• If the tenant and landlord agree to use the security deposit to pay for last month's rent, the landlord must include the amount as income when they receive it.

Bottom Line

Georgia landlords have quite some freedom regarding security deposits. As long as you follow the rules stated on this page, you won't have any issues ensuring a better lease relationship with your tenant.