lease-provisions

Georgia Security Deposit Laws: A Comprehensive Guide for 2024

Author: Kasee Godwin
Date: 10.30.2023

Navigating Georgia’s security deposit laws can be a complex task, but it’s crucial for ensuring a fair and lawful rental experience.  As a property manager, understanding your rights and responsibilities when it comes to security deposits is essential for protecting both yourself and your residents.

In this guide, we’ll break down Georgia’s security deposit laws, including how much you can charge, what you can deduct from a deposit, and the timeline for returning deposits. We’ll also cover what you need to know about security deposit alternatives—and if they’re required for Peach State properties.

Georgia Security Deposit Laws: Key Takeaways

At a glance, there are a few key points property managers should remember about how to price, obtain, store, and return security deposits at the end of the tenancy:

  • Georgia law does not limit security deposit amounts.
  • Property managers may request additional deposits for pets.
  • Atlanta has passed a law requiring properties to offer security deposit alternatives, but nothing has been passed yet at the state level.
  • Property managers may either store security deposits in an escrow account, or they may opt for a surety bond.
  • Property managers must disclose the deposit’s location to residents.
  • Property managers must reimburse the security deposit within 30 days post-tenancy termination

Now let’s take a closer look at the intricacies of Georgia’s security deposit laws.

Recent Changes to Georgia’s Security Deposit Laws

Regulations surrounding security deposits are always changing. For example, in March of 2023, the Georgia House of Representatives passed the “Safe at Home Act.” This would have put a limit on security deposit amounts. The bill failed to pass in the Senate, but Georgia lawmakers are actively looking to create new legislation around housing.

Another pivotal development is Atlanta’s “Rental Choice Law.” This law requires property managers to accept alternatives for the required security deposit if the property manager 1) controls more than ten units and 2) the security deposit is more than sixty percent (60%) of the monthly rental rate.

Managing properties in Atlanta? Click here to learn more about Atlanta’s security deposit laws and their impact on both renters and property managers.

Collecting Security Deposits in Georgia

Georgia security deposit law grants property managers plenty of freedom to create the terms of their security deposits. This allows property managers to create terms that will best meet the needs of their business. 

Security Deposit Limit Laws

Georgia landlord-tenant law is quite accommodating. There are no limits on the security deposit amount a property manager can demand. However, property managers are encouraged to keep security deposits priced reasonably to increase the number of new leases on rental properties. 

Pet Deposit Laws

Property managers can request an additional deposit for pets, distinct from the primary security deposit. However, please note that service pets are exempt. This law ensures that disabled individuals with service animals aren’t unfairly charged. Nevertheless, damages caused by service animals are still the resident’s responsibility.

Security Deposit Alternative Laws in Georgia

In Georgia, at the state level, property managers are not required to offer security deposit alternatives. However, the city of Atlanta passed legislation requiring some property managers to offer residents a security deposit alternative.

A security deposit alternative is an alternative to the traditional cash deposit required by property managers. Rather than asking residents to pay a sizeable upfront sum, alternatives such as surety bonds or installment-based deposit programs allow residents to pay smaller, recurring payments.

For example, Qira is a financial management platform for property managers that offers a security deposit program. This program allows residents to pay a nominal monthly fee (as low as $5/month) instead of a lump-sum cash deposit, reducing move-in costs. Qira also helps streamline the security deposit collection process for property managers. 

While security deposit alternatives might not be required in Georgia, platforms like Qira offer major benefits to both residents and property managers. Renters get to keep cash in their pockets, and property managers don’t have to assume any additional risk—Qira handles it for them. 

Want to learn more? Check out Qira’s security deposit program here.

Laws on Storing a Security Deposit in Georgia

Failure to properly store a security deposit may mean property managers are unable to withhold any of the deposit from renters. property managers should carefully consider their options and provide residents with transparent communication about the location of their deposit.

Storing the Security Deposit

Property managers and landlords in Georgia have two choices for storing security deposits:

  • Deposit the funds into an escrow account dedicated to security deposits.
  • Opt for a surety bond of $50,000 or the total of all collected security deposits, whichever is less.

Those who own ten or fewer rental units are not required to hold security deposits in an escrow account. The exception for this law applies to units managed by an outside party, such as a property management company.

Informing Reisdents about the Deposit’s Location

Georgia law requires property managers to give residents a written notice stating where their deposit is held. However, property managers are not obligated to disclose the account’s interest rate.

Georgia Laws on Returning a Security Deposit

Moving can be overwhelming and stressful for both residents and property managers. Understanding and communicating security deposit laws to residents can help the process move more smoothly for all parties.

Security Deposit Return Timeline

After the lease’s conclusion, property managers have a 30-day window to reimburse the security deposit.

Property managers must conduct a move-out inspection within three business days post-tenancy termination. During this inspection, property managers must prepare a detailed list of damages. Property managers then evaluate the cost of those damages and assign a price. It is mandatory, by Georgia law, to prepare a written statement of deductions for renters.

Deposit Claim Requirements

To claim part of the security deposit, Georgia property managers should:

  • Inspect the property within three business days post-lease termination or resident departure.
  • Create an itemized list of damages and associated cost estimates.

Even if the renter has abandoned the property, property managers are still required to perform a timely inspection. Residents have the right to inspect the property within five business days after the termination of the lease. 

During the resident’s inspection, they may cross-check the property manager’s determined damages. The property manager may make deductions from the security deposit once both parties have agreed to the damages.

Deductions from the Security Deposit

Per Georgia security deposit law, property managers can make deductions from the full security deposit for:

  • Nonpayment of rent or unpaid utility bills
  • Financial losses due to resident property abandonment or breach of the lease terms
  • Damages surpassing regular wear and tear

Damages that surpass normal wear and tear may include:

  • Broken windows and light fixtures
  • Large nail holes in the wall
  • Carpet stains or holes
  • Broken locks, door frames, or doors
  • Unauthorized painting or remodeling

Keep in mind that Georgia law specifies regular wear and tear as any damage that occurs during the normal use of the property. Property managers are solely responsible for these repairs.

Additionally, property managers are responsible for routine management to make the property desirable for potential residents—like painting and deep cleaning. Property managers must also manage systems that make the apartment or home livable, such as HVAC, plumbing, and electricity.

The Bottom Line on Georgia’s Security Deposit Laws

Understanding Georgia’s security deposit laws is crucial for maintaining a respectful and lawful relationship between property managers and their residents. By adhering to these guidelines, property managers protect their properties and ensure a fair process for all parties involved.

Looking for a way to reduce resident move-in costs and streamline the security deposit collection process? Qira can help—learn more and book a demo here.

FAQs About Georgia’s Security Deposit Laws

Can residents use the security deposit for last month’s rent?

Georgia security deposit law doesn’t allow renters to substitute their deposit for the last month’s rent unless the landlord or property manager consents in writing.

Are property managers required to compile a list of pre-existing damage?

Property managers who own ten or fewer rental units are not required to create a list of pre-existing damage unless those units are managed by an outside party. However, creating a list of pre-existing damages and having the resident sign off on that document is a useful way to limit potential conflicts that may later arise between residents and their property managers.

What are the penalties for failing to comply with Georgia’s security deposit laws?

Landlords and property managers who miss the timeline or fail to provide an exhaustive deduction list risk forfeiting the entire security deposit. Additionally, they might incur penalties up to three times for covering the resident’s security deposit amount. Property managers who fail to comply may also be responsible for covering reasonable attorney fees.

Do property managers have the right to ask for another security deposit?

It is not typical for a property manager to request another security deposit at the start of a new leasing period. However, property managers retain the right to ask for a new security deposit at the start of a new lease if permitted in the terms of the lease agreement.

Disclaimer

Qira aims to keep this information as up-to-date as possible. The content provided here is informational and should not be considered as legal advice. Please refer to the relevant government sources to check for any changes to the law.

kasee-godwin-80x80

Kasee Godwin

Position: Director of Marketing
Social Networks

Kasee is the Director of Marketing for Qira. She has nearly 15 years of experience in the real estate marketing industry, including 10 years on the client side. In her spare time, she enjoys reading science fiction, exploring new wineries, and fostering Golden Retrievers.

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