What the statute governs
A.R.S. § 33-1321 is the security deposit section of the Arizona Residential Landlord and Tenant Act. It caps what may be demanded as a security deposit and prepaid rent, requires that any nonrefundable fee or deposit be stated in writing as nonrefundable, gives the resident a right to be present at the move-out inspection, and sets the deadline for returning the deposit together with an itemised statement of deductions.
Two of those are the ones owners get wrong. If a charge is intended to be nonrefundable, it has to say so in writing — an unstated intention is not a nonrefundable fee, it is a refundable deposit you are now holding without authority. And the return deadline in Arizona is counted in business days, not calendar days, which is a genuinely different number and catches careful people out.
Confirm the current cap and the current day count in the statute before you rely on either. Both are the kind of provision that gets amended, and a figure remembered from a few years ago is exactly how an owner ends up outside a deadline they thought they had met.
The move-out inspection the resident is entitled to attend
The statute gives the resident the right to be present at the move-out inspection. Owners sometimes treat this as an inconvenience. It is the opposite: an inspection the resident attended, where the condition was discussed on the spot, is dramatically less likely to turn into a dispute about a deduction six weeks later.
Notify them properly, do the inspection with the same checklist you used at move-in, and photograph everything with dates. The pairing is what does the work — a move-out photograph on its own proves the condition today, while a move-in photograph next to it proves what changed during the tenancy. Without the move-in record you are asserting, not demonstrating.
Normal wear and tear is not damage, and the distinction is not negotiable
A resident is not responsible for the property ageing through ordinary use. Carpet wearing along a traffic path over a multi-year tenancy, paint dulling, minor scuffs, and fixtures reaching the end of their working lives are the cost of owning a rental. A hole in a wall, a pet-damaged floor, a missing appliance or a filthy property left uncleaned are not.
Where owners overreach is in charging the full replacement cost of an item that was already part-way through its life. If a carpet with a ten-year expected life is damaged in year seven, the remaining value is not the price of a new carpet. Deductions calculated on remaining useful life are far more defensible than deductions calculated on the invoice.
The itemised statement should be readable by the person receiving it: what the item was, why it is a deduction rather than wear, and how the amount was arrived at. "Cleaning — $400" invites a dispute. A line that explains itself usually does not.
The three habits that prevent almost every deposit dispute
Diary the deadline the day you get the keys back. Not the day you finish the repairs, not the day the invoices arrive. The clock is not waiting for your contractor, and missing it can expose you to considerably more than the sum you were trying to withhold.
Do a proper move-in condition report, every time. Signed by the resident, photographed, dated, stored somewhere you will still be able to find it in three years. Every contested deduction in the history of this business comes back to whether this document exists.
Send the statement even when there is nothing to deduct. A full return with a short statement closes the tenancy cleanly and on the record. Silence plus a cheque is how a resident who is owed nothing still ends up filing something.