Arizona Nonrefundable Fees and Deposits: What the Statute Says

A.R.S. 33-1321(B) says the landlord shall state in writing the purpose of all nonrefundable fees or deposits, and that any fee or deposit not designated as nonrefundable is refundable. The security cap in subsection (A) is a separate rule, and the statute text does not say whether a nonrefundable fee counts toward it.

The Security Deposit Cap

A.R.S. 33-1321(A) limits what a landlord may demand or receive: "A landlord shall not demand or receive security, however denominated, including prepaid rent in an amount or value of more than one and one-half month's rent."

This means:

Security, including prepaid rent, cannot exceed one and one-half month's rent.
The statute says security "however denominated", so the label on the charge is not what counts.
Subsection (A) does not prohibit a tenant from voluntarily paying more than one and one-half month's rent in advance.

Example: rent is $1,200 per month. One and one-half month's rent is 1.5 × $1,200 = $1,800, the most a landlord may demand or receive as security including prepaid rent.

Nonrefundable Fees: What Subsection (B) Says

A.R.S. 33-1321(B) states: "The purpose of all nonrefundable fees or deposits shall be stated in writing by the landlord. Any fee or deposit not designated as nonrefundable is refundable."

Two rules follow from the text:

Purpose in writing. The landlord shall state the purpose of every nonrefundable fee or deposit in writing. The statute does not say what counts as an adequate purpose, and it does not say what happens if the purpose is left out. An Arizona attorney can advise on that.
Designation. A fee or deposit not designated as nonrefundable is refundable. The statute does not say what wording counts as a designation. Putting the word nonrefundable in the same writing as the purpose is the clearest approach.

Security and Nonrefundable Fees Side by Side

Question	Security, including prepaid rent	Nonrefundable fee or deposit
Rule in the text	Capped at one and one-half month's rent (subsection A)	Purpose stated in writing; refundable unless designated nonrefundable (subsection B)
Return at move-out	Under subsection (D), within fourteen days, excluding Saturdays, Sundays or other legal holidays, after termination of the tenancy and delivery of possession and demand by the tenant, the landlord provides an itemized list of all deductions with the amount due, if any	The text sets no separate return rule for a fee designated nonrefundable
Counts toward the cap?	Yes, by definition	Not stated in the text

Example: Pet Fees

The statute text does not name pet fees; it speaks of nonrefundable fees or deposits generally. A landlord who calls a pet charge nonrefundable should state its purpose in writing and designate it nonrefundable. Our template; the statute requires the purpose in writing, not this wording:

One-time nonrefundable pet fee: $300.
Purpose: to cover the cost of reviewing and recording the pet approval.

If a charge is written only as a pet fee, with no designation as nonrefundable, subsection (B) says a fee not designated as nonrefundable is refundable. Under subsection (G), at the end of the tenancy all refundable deposits shall be refunded to the tenant pursuant to that section.

The Open Question: Fees and the Cap

Subsection (A) caps “security” including prepaid rent; subsection (B) speaks of nonrefundable fees or deposits. The text does not say whether a properly designated nonrefundable fee counts toward the cap in (A). An Arizona attorney can advise before you rely on either reading.

Do This

Work out the cap: one and one-half times the monthly rent, for security including prepaid rent.
For any nonrefundable fee or deposit, state its purpose in writing.
Designate it as nonrefundable in the same writing, using the word nonrefundable.
Keep a signed copy of the lease and the writing for your records.
At move-out, follow subsection (D): the itemized list of deductions is due within fourteen days, excluding Saturdays, Sundays or other legal holidays, after termination of the tenancy and delivery of possession and demand by the tenant. Unless the tenant makes other written arrangements, mail it, with any amount due, by first class mail to the tenant's last known place of residence.

Common Mistakes

Calling a fee nonrefundable without stating its purpose in writing.
Using a vague label such as miscellaneous fee without saying what it covers, when the statute requires the purpose to be stated in writing.
Treating a fee as nonrefundable in practice without designating it as nonrefundable; the statute says an undesignated fee is refundable.
Assuming a nonrefundable fee falls outside the one and one-half month cap; the text does not say so.
Counting the 14 days with the wrong rule: subsection (D) excludes Saturdays, Sundays and legal holidays, while other sections count days their own way.

This describes statute text; it is not legal advice. For disputes about whether a fee was properly designated or what counts as a valid purpose, consult an Arizona attorney.

Checked against the text published on azleg.gov on 5 October 2026.

Sources

A.R.S. 33-1321 — Arizona Legislature, Arizona Revised Statutes

Related guides

Informational only, not legal advice. Statute text checked against the Arizona Revised Statutes (Title 33, Chapter 10 and Title 12, Chapter 8, Article 4) as published at azleg.gov on October 5, 2026. Statutes change every legislative session and a court may read them differently than a summary does; for a dispute, an eviction or anything expensive to get wrong, talk to an Arizona landlord-tenant attorney.

Want the complete picture? The Arizona Small Landlord Compliance Guide puts the deposit, notice and eviction rules of the Arizona Residential Landlord and Tenant Act in one place, with each rule cited to the statute text.

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