Georgia Security Deposit Law: Escrow, Charges and Return

Security Deposit Amount and Allowable Charges

In Georgia, state law offers flexibility on deposit amounts but enforces strict rules for deductions and documentation. Here’s what landlords and tenants need to know about security deposit amounts and allowable charges: 

Allowed deposit amount and typical charges

Georgia law does not impose a maximum limit on security deposits, giving landlords the flexibility to charge amounts appropriate for their rental units. However, local ordinances may set caps. For example:

• Atlanta: Limits security deposits to 1.5 months’ rent.
• Savannah: Imposes a cap of 2 months' rent on security deposits.
• Augusta: Restricts security deposits to 1 month's rent.

Typical practices across Georgia:

• 1-2 months’ rent is the standard deposit range for most properties.
• Higher-end rentals may also require first and last month’s rent alongside a security deposit.

Documentation requirements for deductions

To make lawful deductions, landlords must:

• Provide an itemized list of damages and charges.
• Include supporting documentation such as photos, repair receipts, or vendor estimates.
• Deliver this notice to the tenant’s last known address within 30 days.

Escrow Account Requirement for Security Deposits

Georgia security deposit laws ensure that landlords handle deposits responsibly and transparently. By requiring specific management methods and prioritizing tenant protections, the law aims to prevent disputes and promote fairness for both parties: 

Escrow account or surety bond requirement

Georgia law requires landlords to manage security deposits through one of two methods. First, landlords can deposit the funds into a federally or state-regulated escrow account and provide tenants with written notification of the account’s location. 

Alternatively, landlords may post a surety bond equal to the total deposit amount or $50,000 (whichever is less). Importantly, tenants cannot be charged any fees related to obtaining or maintaining the bond.

Tenant protections and transparency 

Georgia law prioritizes tenant protections to ensure transparency in handling security deposits. If a landlord fails to comply with the requirements for escrow accounts or surety bonds, they forfeit the right to withhold any portion of the security deposit. 

Tenants also have the legal right to take action against non-compliant landlords, which can result in damages awarded to the tenant, including up to three times the withheld amount and attorney fees in cases of bad faith.

Written Checklist and Move-Out Inspection

A comprehensive checklist plays a vital role in documenting the condition of a rental property at both move-in and move-out stages: 

Move-in checklist requirement 

Before accepting a security deposit, landlords must provide tenants with a comprehensive checklist of the rental unit’s condition. This list must:

• Be completed within three business days of lease commencement.
• Include detailed descriptions of any pre-existing damages.
• Be signed by both landlord and tenant, with the tenant having five days to inspect and amend the list.

Move-out inspection and itemized damages list

Landlords must conduct a move-out inspection within three business days of the lease’s termination. The itemized damage report must:

• Detail all damages exceeding normal wear and tear.
• Provide estimated repair costs or invoices.

Tenants have the right to review and dispute this list within five business days.

Procedure for Return of Security Deposit 

Ensuring the proper return of a tenant’s security deposit is a critical responsibility for Georgia landlords. Here's what landlords and tenants need to know:

30-day return period after tenant move-out 

Georgia law mandates that landlords return a tenant’s security deposit or provide an itemized list of deductions within 30 days after the tenant vacates the property. The timeline is strict and applies to most rental agreements to ensure tenants receive timely resolution of their deposits.

• For Military Tenants: Active-duty service members are granted additional flexibility, with landlords allowed up to 60 days to return deposits under specific conditions.

Timely compliance with this timeline is essential. Failure to meet this requirement results in the landlord forfeiting their right to withhold any part of the security deposit, as per Georgia Code § 44-7-34.

Notice requirements for deductions 

If landlords need to make deductions from the security deposit, they must provide a detailed written notice to the tenant. This notice must include:

• Reasons for deductions: A clear explanation of the damages, unpaid rent, or other lawful charges being deducted.
• Supporting documentation: Copies of repair estimates, invoices, or receipts to substantiate the deductions, as required by Georgia Code § 44-7-33.

Without proper documentation, landlords cannot legally withhold funds. Tenants have the right to dispute any deductions they deem unfair or unsupported.

Landlord’s Liability for Non-Compliance 

Non-compliance with Georgia’s security deposit laws can lead to significant financial and legal consequences for landlords. These regulations are designed to protect tenants and ensure transparency in managing security deposits: 

Potential liabilities for non-compliance 

Landlords who fail to comply with Georgia’s security deposit laws may face severe consequences, including:

• Triple Damages: Tenants may recover up to three times the wrongfully withheld deposit amount.
• Legal Fees: Courts may also award attorney fees and court costs to tenants.

Tenant rights for pursuing claims

Tenants can take the following actions if their deposit is wrongfully withheld:

1. File a claim in small claims court for up to $15,000.
2. Report violations to the Georgia Consumer Protection Unit.
3. Dispute deductions by providing evidence such as move-in checklists or photos. 

Conclusion

Georgia’s security deposit laws foster transparency and fairness between landlords and tenants. By adhering to regulations regarding escrow accounts, written checklists, and timely deposit returns, landlords can avoid costly disputes. Tenants, on the other hand, should remain informed about their rights and responsibilities to ensure their deposits are protected.