Real Estate Accounting in Birmingham
Alabama caps the deposit at one month's rent, which is among the tightest in the country, and then carves out specific exceptions. Those exceptions are where Birmingham portfolios get their compliance wrong.
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Alabama rules that apply here
- Deposit return deadline
- 60 calendar days
- Statute
- Ala. Code 35-9A-201
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The base cap under 35-9A-201 is one month's periodic rent, but additional amounts may be taken for pets, for changes to the premises, and for increased liability risks. Those are separate permitted charges with their own justification, not headroom on the base deposit. A portfolio that collects one and a half months and calls the whole thing a security deposit has exceeded the cap even where the extra amount would have been perfectly permissible if it had been characterised and documented correctly.
Assigned, Responsive Team
So characterisation is the compliance act. A pet deposit is a pet deposit on the ledger and in the lease, tied to the pet; an additional amount for premises changes is tied to the change. We record each component against its basis rather than summing them into one figure, because the sum is what looks like a violation.
Accurate Monthly Bookkeeping
Alabama's timeline is unusually generous at 60 days for the itemised written notice, and the penalty for missing it is severe: the landlord pays the tenant DOUBLE the original deposit. Sixty days is long enough that portfolios stop treating it as urgent, which is precisely why it gets missed.
Deposit Compliance for Birmingham Portfolios
Ala. Code 35-9A-201
Alabama 35-9A-201 caps the deposit at ONE month's periodic rent, among the tightest in the country, with separate permitted amounts for pets, changes to the premises and increased liability risks. Those exceptions are separately justified charges, not headroom on the base deposit. The itemised written notice is due within 60 days of termination and delivery of possession, and missing it means paying the tenant DOUBLE THE ORIGINAL DEPOSIT, not double the amount withheld.
Because the penalty is a multiple of the whole deposit rather than of the disputed sum, TIMING dominates accuracy as the risk. Reasonable charges delivered late cost more than aggressive charges delivered on time. The cap exceptions also make characterisation the compliance act: a pet amount must be recorded as a pet amount tied to the pet, not summed into a single deposit figure, because the sum is what reads as a violation.
All Alabama requirementsHow we keep you inside it
- Deposit liabilities tracked per tenant in AppFolio, so a 60 calendar days deadline is answerable from the ledger
- Trust accounts reconciled three ways every month
- Deduction documentation recorded against the correct ledger
- Aging deposits flagged before the statutory window closes
Appfolio Bookkeeping Services from REA
Available to Birmingham Operators
Trust Bookkeeping
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REA's skilled team, in combination with Appfolio's comprehensive toolset, addresses the complexity of your corporate financial activities.
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Employing Appfolio's state-of-the-art system, REA offers bank reconciliation services that brings meticulous accuracy to your finances.
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REA utilizes Appfolio's advanced diagnostic tools to swiftly and effectively troubleshoot financial anomalies.
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REA pairs its accounting prowess with Appfolio's detailed reporting to deliver comprehensive Trust Compliance Verification services.
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For Birmingham Portfolios
- Process Review & Set Up
- Bank Reconciliations
- AP / AR
- Accurate NOI, Balance Sheets
- Recording HUD's & Accruals
- Owner Distributions
- Monthly Statements & Reports
- Management Fees
- Corporate Bookkeeping
- Tenant Chargebacks
Take the Whole Close, or One Function
Birmingham operators use REA for the full monthly close or for the single function that has become a bottleneck. Each one is performed inside your AppFolio instance.
Trust Accounting
Compliant, audit-ready trust funds
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Three-way reconciliation, every account
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Bills paid, rent collected, owners paid
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Back books fixed and current
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Annual commercial true-ups
Learn moreExperts In All Property Types
- Single-Family
- Multifamily
- Student Housing
- Affordable Housing
- Community Associations
- Commercial
Experts In All Property Types
Residential, commercial and everything in between. The asset class changes what the books have to prove, and our teams are staffed accordingly.
- Single-Family
- Multifamily
- Student Housing
- Affordable Housing
- Community AssociationsSee the page
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REA and team have been nothing but excellent helping our firm with its day to day financial needs. Their expertise, professionalism, and timeliness have made our lives so much easier. We foresee a long relationship with REA and team.
Frequently Asked Questions
Can we charge more than one month's deposit in Alabama?
Only through the specific exceptions: pets, changes to the premises, and increased liability risks. Those are separately justified charges, not extra headroom on the base deposit, and they have to be characterised as such on the ledger and in the lease.
What happens if we just call it all a security deposit?
You have likely exceeded the one-month cap even where the additional amount would have been permissible if properly characterised. The sum is what reads as the violation.
How long do we have, and what is the penalty?
Sixty days for the itemised written notice, which is generous enough that people stop treating it as urgent. Missing it means paying the tenant double the original deposit.
More in Alabama
Other Alabama markets, the platforms we work in, and the functions available on their own.
AppFolio Bookkeeping for Birmingham
Schedule a call and we will review your AppFolio setup, your Alabama deposit handling, and what it takes to close clean every month.