Security Deposit Alternative in Arizona
Arizona caps what you can hold as security at one and a half months' rent, and the cap reaches anything held as security however it is labeled, prepaid rent included. Once the resident moves out and asks for it, you have 14 days, not counting weekends and legal holidays, to send an itemized list of deductions with whatever is owed. Get that wrong and the resident can recover twice the amount wrongfully withheld.
What Arizona law says about security deposits
Read from the Arizona statute on 2026-09-09. 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 Arizona resident?
Arizona has no statute covering a monthly fee charged instead of a deposit, so the structure rests on the general deposit rules. Two of them matter. The cap in subsection A applies to security however denominated, prepaid rent included, so the label on a charge does not decide whether it counts against the one and a half month ceiling. Subsection B is the other: the purpose of every nonrefundable fee or deposit has to be stated in writing by the landlord, and any fee or deposit not designated as nonrefundable is refundable. A fee nobody wrote down properly is money you are holding for the resident.
Fee-in-lieu provision: A.R.S. 33-1321(B), read on 2026-09-09.
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 Arizona
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 Arizona 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.
Arizona security deposit alternative FAQs
The cap applies to security however denominated, so what matters is whether money is being held as security rather than what the lease calls it. A recurring nonrefundable fee is structured differently because nothing is held, but Arizona has no statute written for the arrangement, so the lease language and the written statement of purpose required by subsection B are where the legal review is worth spending.
See it on your Arizona 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.