Security Deposit Demand Letter — Arkansas

SECURITY DEPOSIT DEMAND LETTER

Under the Arkansas Residential Security Deposit Act

Ark. Code Ann. §§ 18-16-301 through 18-16-306

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND FIRST-CLASS MAIL

Date: [__/__/____]

To:
[________________________________] (Landlord / Property Manager Name)
[________________________________] (Street Address)
[________________________________] (City, Arkansas ZIP)

Re: FORMAL DEMAND FOR RETURN OF SECURITY DEPOSIT
Former Tenant: [________________________________]
Rental Property: [________________________________]
Lease Commencement: [__/__/____]
Move-Out Date: [__/__/____]
Security Deposit Paid: $[________________________________]

Dear [________________________________]:

This law firm represents [________________________________] ("Tenant") regarding your failure to return the security deposit for the above-referenced rental property in compliance with the Arkansas Residential Security Deposit Act, Ark. Code Ann. §§ 18-16-301 through 18-16-306. This letter constitutes a formal demand for the return of the deposit, together with all damages and attorney fees authorized by Arkansas law.

I. ARKANSAS SECURITY DEPOSIT LAW — GOVERNING FRAMEWORK

A. The Arkansas Residential Security Deposit Act

Arkansas enacted a stand-alone security deposit statute at Ark. Code Ann. §§ 18-16-301 through 18-16-306. Unlike many states, Arkansas has not adopted the Uniform Residential Landlord and Tenant Act (URLTA). The Security Deposit Act is the exclusive statutory framework governing deposit collection, retention, and return in Arkansas.

B. Applicability of the Act and Maximum Deposit (Ark. Code Ann. §§ 18-16-303, 18-16-304)

Applicability (§ 18-16-303). The Arkansas Residential Security Deposit Act does not apply to dwelling units owned by an individual where that individual — together with the individual's spouse and minor children, and any partnerships, corporations, or other entities formed to rent dwelling units of which they are officers, owners, or majority shareholders — collectively owns five (5) or fewer dwelling units. Where this exemption applies, the entire subchapter is inapplicable — meaning the two-month cap, the 60-day return deadline (§ 18-16-305), and the double-damages/attorney-fee remedy (§ 18-16-306) do not apply, and a tenant's recourse is limited to the lease terms and small-claims court. Critical exception: the exemption does not apply — and the full Act therefore governs — where management, including rent collection, is performed by a third person for a fee. Ark. Code Ann. § 18-16-303.

Maximum deposit (§ 18-16-304). For a landlord to whom the Act applies, the landlord may not demand or receive a security deposit in excess of two (2) months' periodic rent. Ark. Code Ann. § 18-16-304.

Coverage check for this property: ☐ Landlord owns 6+ dwelling units — the Act applies ☐ Landlord owns 5 or fewer units AND uses no paid third-party manager — the Act does not apply ☐ Landlord owns 5 or fewer units BUT a third person manages or collects rent for a fee — the Act applies

C. The 60-Day Return Deadline (Ark. Code Ann. § 18-16-305)

Section 18-16-305(a)(1) requires property or money held as security to be returned within sixty (60) days after termination of the tenancy. If the landlord applies money to accrued unpaid rent or damages, subsection (a)(2) requires the written itemization and remainder within sixty (60) days after termination of the tenancy and delivery of possession by the tenant.

The 60-day window is not an invitation to delay. It is a maximum outer limit. A landlord who fails to return the deposit and provide the required itemization within this period faces statutory penalties.

D. Required Itemization of Deductions

If the landlord withholds any portion of the deposit, the landlord must deliver to the tenant, within the 60-day period:

1. A written, itemized list of all damages claimed;
2. The estimated or actual cost of repair for each item; and
3. The remaining balance of the deposit.

Ark. Code Ann. § 18-16-305(a). Failure to provide a compliant itemization is itself a violation of the statute.

E. Permissible vs. Impermissible Deductions

Under Ark. Code Ann. § 18-16-305(a), a landlord may deduct only:

• Accrued, unpaid rent;
• Damages to the premises beyond normal wear and tear; and
• Other charges specifically authorized in the written rental agreement.

Normal wear and tear is never a permissible deduction. This includes ordinary deterioration from everyday use — minor scuff marks, small nail holes, carpet wear in traffic areas, faded paint, and similar age-related changes.

F. Mailing to Last Known Address; 180-Day Forfeiture (Ark. Code Ann. § 18-16-305(b))

Under § 18-16-305(b)(1), the landlord is deemed to have complied with the return requirement by mailing the written notice and any payment due, via first-class mail, to the tenant's last known address. If that letter is returned to the landlord and the landlord is unable to locate the tenant after reasonable effort, the payment becomes the landlord's property 180 days from the date it was mailed. Ark. Code Ann. § 18-16-305(b)(2). (Section 18-16-305 does not itself require the tenant to provide a written forwarding address; nonetheless, giving the landlord a current address in writing helps ensure the deposit is returned and preserves the tenant's remedies.)

G. No Interest Requirement / No Separate Account Mandate

Arkansas does not require landlords to hold deposits in a separate account and does not require payment of interest on security deposits. However, Arkansas Constitution Amendment 89 caps the maximum lawful interest rate on any contract or judgment at 17% per annum, which may affect post-judgment interest calculations in deposit litigation.

II. FACTUAL BACKGROUND

A. Tenancy Summary

B. Move-Out Details

C. Post-Move-Out Timeline

The statutory 60-day deadline has expired. No deposit refund or compliant itemized statement has been received.

D. Condition of Premises at Move-Out

☐ Premises were left clean and in substantially the same condition as at move-in, reasonable wear and tear excepted

☐ Professional cleaning was performed by [________________________________] on [__/__/____]

☐ All personal property was removed

☐ Move-in and move-out photographs are available (time-stamped)

☐ Video walkthrough was recorded at move-out

III. LANDLORD'S VIOLATIONS

You have violated the Arkansas Residential Security Deposit Act in one or more of the following respects:

☐ Failure to Return Deposit Within 60 Days — You failed to return any portion of the security deposit within the statutory 60-day period mandated by Ark. Code Ann. § 18-16-305(a).

☐ Failure to Provide Itemized Statement — You failed to deliver a written, itemized list of damages and associated costs within the 60-day period.

☐ Late or Defective Itemization — You provided an itemization that was untimely, incomplete, or not supported by actual repair costs.

☐ Improper Deductions — You claimed deductions for items that do not qualify under Ark. Code Ann. § 18-16-305(a), including:
☐ Normal wear and tear (e.g., minor scuffs, nail holes, carpet wear)
☐ Pre-existing damage documented at move-in
☐ Charges not authorized by the rental agreement
☐ Inflated or fabricated repair costs
☐ Other: [________________________________]

☐ Excessive Deposit Collection — The deposit exceeded two months' rent in violation of Ark. Code Ann. § 18-16-304 (applicable where landlord owns more than 5 units).

☐ Bad-Faith Retention — You retained the deposit without any legitimate basis, as evidenced by: [________________________________]

IV. STATUTORY DAMAGES AND PENALTIES

A. Deposit Amount Owed

B. Double Damages Under Ark. Code Ann. § 18-16-306

Arkansas provides that a tenant may recover damages in an amount equal to twice the amount wrongfully withheld when the landlord wrongfully refuses to return the deposit. This penalty is in addition to the deposit itself.

C. Attorney Fees and Costs

Under Ark. Code Ann. § 18-16-306, a prevailing tenant is entitled to recover reasonable attorney fees and costs of suit. This fee-shifting provision applies in both district court and circuit court proceedings.

D. Total Demand

V. EVIDENCE IN TENANT'S POSSESSION

Our client has preserved the following evidence:

☐ Original signed lease agreement
☐ Receipt or cancelled check for deposit payment
☐ Move-in condition report / checklist
☐ Move-out condition report / checklist (if conducted)
☐ Time-stamped photographs at move-in
☐ Time-stamped photographs at move-out
☐ Video walkthrough of premises at move-out
☐ Copy of written notice to vacate
☐ Proof of forwarding address delivery (certified mail receipt / email confirmation)
☐ Professional cleaning receipt(s)
☐ All correspondence with landlord regarding deposit
☐ Landlord's itemized statement (if any was provided)
☐ Witness statements regarding premises condition
☐ Utility bills confirming occupancy through move-out date
☐ Other: [________________________________]

VI. DEMAND AND DEADLINE

We hereby demand that you take the following action within fourteen (14) days of the date of this letter:

1. Return the full deposit wrongfully withheld: $[________________________________]
2. Pay the statutory penalty (double damages): $[________________________________]
3. Total payment due: $[________________________________]

Payment must be made by certified check or money order, payable to [________________________________], and sent to:

[________________________________] (Law Firm Name)
[________________________________] (Street Address)
[________________________________] (City, Arkansas ZIP)
Reference: [________________________________] Security Deposit

VII. CONSEQUENCES OF NON-COMPLIANCE

If you fail to comply with this demand within fourteen (14) days, we are authorized to:

A. File Suit in Arkansas Court

• Arkansas District Court, Small Claims Division — for claims up to $5,000 (Ark. Code Ann. § 16-17-601 et seq.)
• Arkansas Circuit Court — for claims exceeding $5,000 or where equitable relief is sought

Filing will be in the judicial district where the rental property is located or where the landlord resides. Ark. Code Ann. § 16-60-112.

B. Seek Full Statutory Remedies

• Return of the deposit;
• Double damages under Ark. Code Ann. § 18-16-306;
• Reasonable attorney fees and costs under Ark. Code Ann. § 18-16-306;
• Post-judgment interest at the maximum rate allowed under Arkansas Constitution Amendment 89 (up to 17% per annum).

C. Report Your Conduct

• Arkansas Attorney General — Consumer Protection Division, 323 Center Street, Suite 200, Little Rock, AR 72201
• Local housing authority
• Better Business Bureau — Arkansas

D. Pursue Judgment Collection

Upon obtaining a judgment, we will pursue all lawful means of collection, including bank levies, wage garnishment (subject to Arkansas garnishment exemptions under Ark. Code Ann. § 16-110-402 et seq.), and judgment liens on real property.

VIII. RESPONSE REQUESTED

Please respond in writing within fourteen (14) days with:

1. Your position on the amount owed;
2. Any documentation supporting claimed deductions;
3. Full payment or a bona fide settlement offer.

If we do not receive a satisfactory response, we will file suit without further notice.

IX. RESERVATION OF RIGHTS

This letter is written without prejudice to any and all rights and remedies available to our client under applicable law, all of which are expressly reserved. No right, claim, or defense is waived by this letter or by any subsequent negotiations.

Respectfully submitted,

[________________________________] (Law Firm Name)

By: _________________________________
[________________________________] (Attorney Name)
Arkansas Bar No. [________________________________]
[________________________________] (Street Address)
[________________________________] (City, Arkansas ZIP)
[________________________________] (Telephone)
[________________________________] (Email)

Attorneys for [________________________________]

ENCLOSURES:
☐ Copy of lease agreement
☐ Deposit payment receipt / cancelled check
☐ Move-in / move-out photographs
☐ Copy of notice to vacate
☐ Copy of forwarding address notification
☐ Landlord's itemized statement (if any)
☐ Professional cleaning receipts
☐ Correspondence regarding deposit
☐ Authorization to represent

cc: [________________________________] (Tenant)
[________________________________] (Property Management Company, if applicable)
[________________________________] (Property Owner, if different from addressee)

ARKANSAS-SPECIFIC NOTES

Key Distinctions from Other States

☐ 60-Day Return Period — Arkansas grants landlords 60 days, one of the longest windows in the nation. Most states mandate 14 to 30 days. Do not file suit before the 60-day period has fully elapsed.

☐ No URLTA Adoption — Arkansas has not adopted the Uniform Residential Landlord and Tenant Act. The Security Deposit Act (§§ 18-16-301 through 18-16-306) is a free-standing statute, not part of a comprehensive landlord-tenant code.

☐ Small-Landlord Exemption — Exempts the ENTIRE Act — Under § 18-16-303, the Arkansas Residential Security Deposit Act does not apply at all to an individual owner (with spouse, minor children, and affiliated rental entities) collectively owning 5 or fewer dwelling units — so the two-month cap, the 60-day return deadline, and the double-damages/attorney-fee remedy are all inapplicable. The exemption is lost (and the full Act applies) where a third person manages the units, including collecting rent, for a fee. Confirm the landlord's ownership count and management arrangement before asserting any statutory claim; against a truly exempt small landlord the claim sounds in contract/small claims, not in §§ 18-16-304–306.

☐ 180-Day Forfeiture Rule — Where the landlord mails the notice/refund to the tenant's last known address and the letter is returned, and the landlord cannot locate the tenant after reasonable effort, the deposit becomes the landlord's property 180 days after mailing (§ 18-16-305(b)(2)). Ensure the landlord has the tenant's current address before asserting the claim, so this forfeiture window is not triggered.

☐ No Interest or Separate Account Requirement — Arkansas does not mandate interest accrual on deposits and does not require that deposits be held in segregated accounts.

☐ Constitutional Interest Cap (Amendment 89) — Arkansas Constitution Amendment 89 limits interest on contracts and judgments to 17% per annum. Post-judgment interest on deposit awards is capped accordingly. Ark. Code Ann. § 16-65-114.

☐ Double Damages — Not Treble — Arkansas provides double damages (the amount wrongfully withheld x 2), not treble damages. This is a penalty, not a multiplier of total deposit — it doubles only the amount wrongfully withheld.

☐ Fee-Shifting Favors Tenants — Attorney fees are available to the prevailing tenant under § 18-16-306. The statute does not expressly authorize fee-shifting in favor of the landlord.

☐ Small Claims Jurisdiction — Arkansas District Court small claims division hears cases up to $5,000. No attorney is required in small claims, though representation is permitted.

☐ Venue — File in the judicial district where the rental property is located or where the defendant resides.

Sources and References

• Ark. Code Ann. §§ 18-16-301 through 18-16-306 — Arkansas Residential Security Deposit Act
• Ark. Code Ann. § 16-17-601 et seq. — Arkansas Small Claims Procedure
• Ark. Code Ann. § 16-65-114 — Interest on judgments
• Arkansas Constitution Amendment 89 — Maximum lawful interest rate (17% per annum)
• Ark. Code Ann. § 16-60-112 — Venue for civil actions
• Ark. Code Ann. § 16-110-402 et seq. — Garnishment exemptions
• Arkansas Attorney General, Consumer Protection Division: https://arkansasag.gov
• Legal Aid of Arkansas, Security Deposits: https://a.arlawhelp.org/landlord-tenant/security-deposits

This template is for informational purposes only and does not constitute legal advice. Laws change frequently; verify current requirements with a licensed Arkansas attorney.