Arkansas Security Deposit Laws (2026 Guide)

Small Landlord Exception

Many Arkansas renters are surprised to learn that certain statutory security deposit protections do not apply equally to every landlord in the state. Under Arkansas Code § 18-16-303, Arkansas's security deposit statutes generally apply to landlords owning six or more rental units.

Conversely, the statutory exemption generally applies to landlords owning five or fewer dwelling units, subject to the conditions set forth in Arkansas law. However, an important statutory condition applies: a landlord using a fee-based third-party property manager may still be subject to the statutory requirements even if they own fewer units.

This is known as the "small landlord exception." If you rent directly from a private landlord who owns five or fewer units and manages them independently without a third-party property manager, your tenancy may fall outside the explicit statutory framework of the Arkansas security deposit code.

Does this mean small landlords can keep my deposit for any reason? No. Even if the specific state statute regarding timelines and itemizations does not directly govern your landlord, you still have rights derived from your written lease agreement and general contract law. If a small landlord wrongfully withholds your money without a valid breach of contract, you can still pursue legal remedies, though the procedures and penalties may differ.

Understanding Arkansas's 60-Day Rule

While many states require deposits to be returned within 14, 21, or 30 days, Arkansas gives landlords a much longer window. Once a tenant moves out and possession of the property is returned, an Arkansas landlord has up to 60 days to return the security deposit or provide a written, itemized list of deductions.

This extended timeline requires patience from tenants. Here is how the process typically flows:

• Day 1 to 30: You have moved out and provided your forwarding address. The landlord assesses the unit, awaits final utility bills, or schedules repairs. You will likely not receive your deposit during this initial phase.
• Day 30 to 60: The landlord finalizes the numbers. By day 60, they must either refund your deposit fully or send a detailed statement itemizing why any money was withheld, along with the remaining balance.
• After Day 60: If the 60-day deadline expires and the landlord has neither refunded the deposit nor provided a legally compliant itemized list of deductions, the landlord may forfeit their right to keep any portion of the deposit, unlocking your right to pursue legal demand and litigation.

How Long Do I Have to Sue?

When an Arkansas landlord wrongfully retains a security deposit or fails to deliver an itemized statement within 60 days, tenants have the right to seek legal recovery. However, this legal remedy is governed by Arkansas's statute of limitations, which sets strict time limits for initiating a lawsuit in court.

In Arkansas, the deadline to file a legal claim depends on the nature of your rental agreement:

• Written Lease Agreements (5 Years): Under Arkansas Code Annotated § 16-56-111, claims arising from a breach of a written contract—such as a signed lease agreement—must be brought within five years from the date the cause of action accrued (typically when the 60-day deposit refund deadline passed without compliance).
• Oral Lease Agreements (3 Years): Under Arkansas Code Annotated § 16-56-105, claims based on an oral agreement or implied contract have a shorter statute of limitations of three years.

Although five or three years may sound like plenty of time, tenants should avoid waiting until near the deadline to pursue their money. Over time, crucial evidence degrades significantly. Move-out photographs, move-in inspection checklists, bank statements, receipts for move-out cleaning, emails, and text messages can be lost or accidentally deleted. Furthermore, key witnesses, neighbors, or former property managers may relocate or forget essential details regarding the condition of the rental property.

It is also critical to understand that sending a formal demand letter or engaging in informal negotiations does not pause, stop, or extend the legal statute of limitations. The clock continues ticking regardless of ongoing discussions with your former landlord. Taking prompt action ensures your legal rights remain fully protected and your evidence stays fresh.

Can I Recover Attorney Fees?

When pursuing the return of a wrongfully withheld security deposit, tenants often wonder whether they can recover the cost of legal representation. In Arkansas, statutory provisions and contract principles may allow a prevailing tenant to recover reasonable attorney fees in qualifying security deposit disputes. Under Arkansas Code Annotated § 16-22-308, courts may award reasonable attorney fees to the prevailing party in civil actions involving a breach of contract, such as a residential lease agreement.

However, the recovery of attorney fees is never automatic or guaranteed. Potential fee awards depend heavily on the specific governing laws, the judicial forum handling the dispute, and the unique factual circumstances of each case. Judges generally retain discretion when determining whether an award of attorney fees is appropriate and what amount constitutes reasonable compensation.

It is also important to understand the structural rules of different Arkansas courts. Arkansas Small Claims Division courts are designed to provide an accessible, low-cost forum for resolving minor monetary disputes. Consequently, attorneys are generally not permitted to represent parties in Small Claims Court proceedings. A tenant who chooses to hire an attorney to represent them in formal litigation may need to file their lawsuit in the regular District Court or Circuit Court civil division, depending on the jurisdictional limits and specific circumstances.

Despite these litigation considerations, going to court is often unnecessary. A substantial number of security deposit disputes are resolved before any formal legal action is initiated. Serving a clear, legally grounded demand letter that outlines the tenant's rights, statutory deadlines, and potential legal remedies frequently encourages landlords to return the withheld funds voluntarily, saving both parties time and litigation costs.

How Much Does It Cost to File a Small Claims Case?

When considering legal action to recover a security deposit, tenants must account for the initial upfront court costs. In Arkansas, filing fees for Small Claims Division cases are set at the local level and can vary significantly depending on the county or specific District Court division where the suit is instituted. Additionally, these administrative fee schedules are subject to periodic adjustments by local judicial authorities or statutory revisions over time.

Beyond the base court filing fee, tenants should also anticipate official service of process costs. In order for a small claims lawsuit to proceed, formal legal notice and a copy of the complaint must be served on the landlord or property management company. Service fees vary based on the chosen method of service, such as service by certified mail with restricted delivery and return receipt requested, or service carried out directly by a local county sheriff or licensed process server.

Because fee structures differ across jurisdictions, tenants are strongly encouraged to contact the clerk of the appropriate Arkansas District Court prior to filing to verify the exact current filing fees and acceptable methods for service of process. Checking beforehand helps prevent procedural delays or rejected filings due to incorrect payment amounts.

Fortunately, if a tenant prevails in court, these initial litigation expenses may not be a permanent loss. If permitted by applicable law and explicitly awarded by the presiding judge in the final judgment, court filing fees and verified service of process costs may be assessed against the losing landlord as part of the total monetary recovery.

What Happens If The Landlord Can't Find You?

Arkansas law contains specific rules regarding unclaimed security deposits. If you do not provide a forwarding address, the landlord's only option is to mail the refund and itemized statement to your last known address (which is often the unit you just vacated).

If the mail is returned undeliverable, the returned mail does not automatically create liability for the landlord. The landlord is required to make reasonable efforts to locate you. However, if those reasonable efforts fail and you do not claim the funds, Arkansas law dictates a strict expiration period.

Practical advice: Always provide a written forwarding address when moving out, even if it is a trusted family member's address or a P.O. Box. Keep a copy of the communication showing you provided this address to prevent your funds from expiring.