Most small landlords in Georgia will be in the category of a “natural person” owning ten or fewer rental units either individually or together with a spouse or minor children, and where they are performing any property management activities on their own.

How security deposits are handled by landlords in Georgia depends on two factors: the number of rental units owned and if property management is performed for a fee. Most small landlords in Georgia will be in the category of a “natural person” owning ten or fewer rental units either individually or together with a spouse or minor children, and where they are performing any property management activities on their own. In that case, the laws for handling security deposits are straightforward. However, as an abundance of caution landlords in this situation may still wish to deposit the security deposit in an escrow account.

Security Deposit Amount

There is no limitation on the amount of the security deposit, but per O.C.G.A. § 44-7-30(3), the term “Security deposit” includes damage deposits, advance rent deposits, and pet deposits. And the statute continues to stipulate that the term security deposit does not include nonrefundable fees, money, or other consideration which will not to be returned to the tenant or which were to be applied toward the payment of rent or reimbursement of services or utilities provided to the tenant. And remember that although the law does not require that a landlord provide a written receipt for the security deposit received, it’s always a good idea to provide a written receipt.

Allowable Charges and Return of Deposit

The tenant needs to provide the landlord with his forwarding address prior to move out so the landlord send the security deposit, all or a portion of it, to the tenant. O.C.G.A. § 44-7-34 states that within one month after the termination of the rental agreement the landlord must return the full security deposit to the tenant. The security deposit can not be used for normal wear and tear, but any actual damage that exists would be the responsibility of the tenant, the cost of which is taken out of the security deposit prior to forwarding to the tenant.

If there is actual damage the landlord must provide the tenant with a written statement listing the exact reasons for the retention of the deposit. If the reason for retaining all or a portion of the deposit is due to damages then those damages must be listed. This written statement is delivered via first class mail to the tenant, along with any remaining deposit money. If the letter containing the payment is returned to the landlord as undeliverable and if the landlord is unable to locate the tenant after reasonable effort, the payment becomes the property of the landlord 90 days after the date the payment was mailed.

It’s important to note that the landlord can also retain the security deposit for such items as nonpayment of rent or fees for late payment, for abandonment of the Premises, for nonpayment of utility charges, for repair work or cleaning contracted for by the tenant with third parties, for unpaid pet fees, or for actual damages caused by the tenant’s breach of the rental agreement, provided that the landlord attempts to mitigate the actual damages.