Running a Georgia Rental Portfolio: The Ten Unit Line and What Crossing It Changes

Georgia treats a landlord with ten units differently from one with eleven. Cross that line and two obligations attach that did not exist before, and nobody sends a letter when it happens.

This guide covers what the exemption actually exempts, what changes when it stops applying, and why a growing portfolio needs to know where it stands before a dispute establishes it.

The exemption, and what it does not cover

O.C.G.A. 44-7-36 exempts a landlord who is a natural person owning ten or fewer rental units and who does not use a management company. Both conditions must hold.

What it exempts is narrower than it sounds. The escrow requirement under 44-7-31 and the move in inspection list under 44-7-33 do not apply.

What it does not exempt is everything else. The two month deposit cap still applies. The thirty day return deadline still applies. The treble damages exposure for bad faith withholding still applies.

So an exempt landlord is not outside the deposit rules. They are outside two specific procedural requirements within them.

Three ways to leave the exemption without noticing

The condition is not a status you apply for. It is a factual test that either holds or does not at any given moment.

Buying the eleventh unit. The most obvious route, and the one people do watch for.

Engaging a management company. This takes you outside the exemption regardless of how few units you own. A landlord with four units who hands management to a company is subject to the full requirements from that point.

Holding through an entity. The exemption is for a natural person. Owning through an LLC may take you outside it, which is worth establishing before restructuring for other reasons.

Any of the three can happen without the deposit process changing to match, and the gap between the change and the process catching up is where the exposure sits.

What attaches when the exemption stops

Escrow. Under 44-7-31 the deposit must go into an escrow account at a state or federally regulated depository, used for no other purpose, with written notice to the tenant of where that account is. A surety bond is a permitted alternative.

The operative words are no other purpose. A deposit sitting in the general operating account is not in escrow even if untouched and fully accounted for.

The inspection list. Under 44-7-33 a written list of existing damage must be provided before accepting a deposit. A landlord who fails to do so forfeits the right to retain any portion of it.

Not a proportionate reduction. The whole deposit, including amounts that would have covered unpaid rent.

And providing the list afterwards does not restore the right, because the requirement is that it comes first.

The deposit cap and what counts toward it

Since 1 July 2024, O.C.G.A. 44-7-30.1 caps residential security deposits at two months rent for leases entered into or renewed on or after that date.

Refundable deposits count together. A pet deposit forms part of the same two months, so two months as security plus a refundable pet deposit exceeds the limit.

Non-refundable fees sit outside the cap and Georgia does not limit them. That is a legitimate structural choice rather than a loophole, but it makes the label on each charge a compliance question rather than a presentational one.

Before July 2024 Georgia had no statutory limit. A portfolio running the same paperwork since before then is capping nothing.

Thirty days, and what itemizing means

Under 44-7-34 the deposit must be returned within thirty days of the tenancy ending, or the balance returned with a written statement itemizing each deduction.

Itemizing means what it says. A single line reading cleaning and repairs is not an itemization, and producing one does not satisfy the requirement in substance even though a document exists.

Under 44-7-35 a landlord who withholds in bad faith may be liable for treble the amount wrongfully withheld. Bad faith is a higher bar than being mistaken, but deducting for damage you cannot evidence sits closer to it than most operators assume.

What Georgia leaves entirely to you

Worth stating because operators working across states sometimes apply the stricter rules everywhere and lose money for no reason, or apply the looser ones and create exposure.

No rent control, and none possible. No statutory cap on late fees and no required grace period. No interest obligation on deposits. No cap on application or administration fees.

Compare that with Chicago, which requires annual deposit interest and up to one hundred and twenty days notice of any increase, or New York, which caps late fees at fifty dollars or five percent. Georgia leaves all of it to the lease, which means the lease has to be drafted rather than assumed.

Never use self help

O.C.G.A. 44-7-1 prohibits removing a tenant without a court issued writ of possession. Lock changes, removing belongings or cutting utilities are unlawful regardless of what is owed, and they convert a straightforward nonpayment case into a claim against you.

A demand for possession comes before any filing under 44-7-50(a), and sixty days written notice applies to ending a tenancy at will under 44-7-7.

An operating checklist

• Know your unit count and review it on every acquisition. Ten is the line and nothing announces crossing it.
• Reassess on engaging a management company or changing ownership structure, because either can end the exemption at any portfolio size.
• If you are not exempt, hold deposits in a genuine escrow account used for no other purpose, and notify each tenant in writing where.
• If you are not exempt, provide the inspection list before accepting any deposit, and keep a signed copy. This is the one with total forfeiture attached.
• Cap refundable amounts at two months, counting every refundable charge together.
• Return or itemize within thirty days, with each deduction tied to evidence.
• Draft the late fee clause deliberately, because the statute gives you nothing to fall back on.

The short version

Ten or fewer units, held personally, self managed, and you are outside the escrow and inspection requirements. Cross any of those three and both attach. The cap, the thirty day return and the treble damages exposure apply either way.

The inspection list is the one to get right, because failing to provide it forfeits the entire deposit rather than part of it.

The full statutory references, with every provision cited, are free to download at our Atlanta datasets.

Homzora Housing Intelligence · Atlanta edition