Security Deposit Alternative in Alabama
Alabama caps a security deposit at one month's rent, with more allowed only for pets, changes to the premises, or increased liability risk. You have 60 days after the tenancy ends and the resident moves out to refund the deposit or send an itemized list of what you kept. Mail it first class to the forwarding address the resident gave you in writing, and if they gave none, to their last known address. Miss the 60 days and the penalty is double the original deposit.
What Alabama law says about security deposits
Read from the Alabama statute on 2026-09-14. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every Alabama resident?
Alabama has no statute written for a monthly fee charged instead of a deposit, so the arrangement rests on your lease and the general deposit rules. A landlord may not demand or receive money as security above one month's rent, except for pets, changes to the premises, or increased liability risks to the landlord or the premises. When the tenancy ends, the deposit may be applied to accrued rent and to damages from the resident's noncompliance, all itemized in a written notice delivered with the amount due within 60 days of termination and delivery of possession. The resident is supposed to give you a forwarding address in writing. If they do not, you mail the refund or accounting to their last known address, or to the unit itself, and any deposit or check that goes unclaimed for 90 days is forfeited. Miss the 60-day window and you owe the resident double the original deposit.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in Alabama
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a Alabama property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
Alabama security deposit alternative FAQs
Alabama has no statute answering that, so a mandatory version is a question for your own attorney. Section 35-9A-201 governs money held as security, from the one-month cap to the 60-day accounting, so whether a monthly fee is money held as security at all is where that review should begin.
See it on your Alabama units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.