When you become a landlord in Alaska (or in any state) it’s important to take on the leasing paperwork and administration with a keen eye toward the rental laws. Failure to be informed or failure to work within the law will only cause headaches and potentially cost you money as a landlord. Tackling the security deposit is easy if you know the law and follow it.
You need a trust account in Alaska
Landlords can ask for up to two times the rent amount as a security deposit, with one exception. If the monthly rent exceeds $2,000 the landlord is not limited to capping the security deposit at two times the monthly rent. Whatever you do, make sure to provide a receipt for the security deposit that is received. This is the beginning of keeping accurate records.
Alaska landlords are required to put the security deposit in a trust account or with a licensed escrow agent, as well as any prepaid rents. It is permissible to combine prepaid rents and security deposits from multiple tenants into one trust or escrow account, but other funds cannot be commingled in that account. In addition, the landlord must separately account for the different prepaid rent and security deposits for each tenant. Separately accounting for each tenant is important because the landlord cannot use the funds from one tenant for the return of another tenant’s deposit, prepaid rent, or to pay for damages. Basically, keep good records and only use one tenant’s prepaid rent and security deposit for that particular tenant’s activities.
Return the deposit on time
When a tenant moves out it’s important to follow the law and return the deposit on time, along with a written accounting of any amounts withheld for damages beyond wear and tear or noncompliance with the rental agreement, including unpaid rent. The time frames for returning the security deposit is dependent on whether or not funds are being withheld or if notice was provided. A full refund of the deposit must be sent to the tenant’s forwarding address (if provided; last known address otherwise) within 14 days of termination of the rental agreement and possession by the landlord. If funds are being withheld for damages, or if the landlord did not receive proper notice of termination of the rental agreement by the tenant, the time frame for returning the security deposit and the itemized accounting of charges withheld is 30 days. There is a penalty for a landlord’s willful noncompliance with the security deposit procedures, which is twice the amount actually withheld.