Landlords in North Carolina normally require tenants to pay a security deposit as part of the move-in costs. This is done for several reasons, including:
- To cover excessive property damage
- To cover lost rent payments
- Covering excessive cleaning costs
- Covering unpaid utilities when the tenant moves out
Just like other states, North Carolina has a statewide security deposit law in place. You must abide by all its provisions when charging tenants a security deposit in North Carolina.
The following are common topics of discussion regarding security deposit regulations in North Carolina.
Security Deposit Limits
How you charge your tenants as a security deposit depends on the length of the lease. If operating a weekly agreement, then the maximum you can charge as a security deposit should be the equivalent of two weeks’ rent.
For monthly leases, the maximum deposit you can charge a tenant should be equivalent to two month’s worth of rent and no more. These limits, however, do not apply to the lease of single rooms.
Pet Deposit in North Carolina
In some states, landlords cannot charge a separate pet deposit. However, in North Carolina, you can charge a reasonable, nonrefundable fee.
Storing a Tenant’s Deposit
You have two options to take when storing a tenant’s security deposit. You can either place it in a trust account or post it as a bond.
If you choose to go with a trust account, you must ensure the account is a licensed, federally insured banking institution and operates in North Carolina.
If posting it as a bond, then you must make sure the company is licensed to operate in North Carolina. The bond amount should be equivalent to the tenant’s security deposit.
Once you’ve complied with any of the aforementioned options, you must then provide the tent with a notice within 30 days. In the written notice, make sure to state the name and the address of the holding institution.
Appropriate Deductions to a Security Deposit
You can make deductions to a tenant’s deposit for several reasons, including:
- To cover unpaid rent that the tenant still owes you
- To cover unpaid utility bills
- Covering excessive property damage. Examples of this can include a broken bathroom mirror or a missing doorknob.
- Covering damages resulting from the tenant breaking the lease
- To cover costs of re-renting the unit
- To cover costs of storing or removing any property that a tenant leaves behind after moving out
Using a Security Deposit as Last Month’s Rent
The only time this can happen is if there is a written agreement in place allowing a tenant to do so. Otherwise, a tenant cannot use the security deposit to cover last months’ rent.
Deductions to Deposit to Cover Normal Wear and Tear
When it comes to damage, a landlord is only allowed to make deductions for excessive property damage, normal wear and tear does not fall under that category.
‘Normal wear and tear’ is the gradual deterioration that occurs to a property due to...
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