Hi, all. This may appear to be a knuckle-head type question, but please bear with me. This is the first time I have rented to anyone. In Arizona, the landlord and tenant act says…
“A. A landlord shall not demand or receive security, however denominated, including, but not limited to, prepaid rent in an amount or value in excess of one and one-half month’s rent. This subsection does not prohibit a tenant from voluntarily paying more than one and one-half month’s rent in advance.”
Does this mean that if my rent is $925 payable in advance (when tenancy begins) that all I can also ask for a security deposit is an additional $462.50? Or am I misinterpreting what is meant by prepaid rent?
thank you
You are misinterpreting it…you can charge “an amount or value in excess of one and one-half month’s rent”…so your security deposit can be 1.5 X $925 = $1387.50 plus the current month’s rent (total of $2312.50).
You cannot charge, for example, first month, last month, and a large security deposit.
Unless it is a spectacular property or you think your tenants are a problem, I personally think that $1300+ deposit is excessive. My rentals are solid and decent and I usually charge less than a month’s rent. My last property was $850 rent with a $500 deposit but I rented to military folks.
Hint: NEVER charge the same amount for rent as you do a deposit. Otherwise, there is a high likelihood the tenants will say “you already have my last month’s rent”…and you’ll have no money to repair any damages.