| Quick Facts | Answer |
| Maximum / Limit | 2 Weeks, 1½ Months’ or 2 Months’ Rent |
| Receipt Requirement | None |
| Inventory Requirement | None |
| Interest Requirement | None |
To learn about laws on security deposit returns in North Carolina, click here.
Some cities and counties may have regulations which are more restrictive than those presented here. Always check local laws.
Maximum Security Deposit Allowed in North Carolina
The maximum security deposit allowed in North Carolina depends on the length of the lease term:
- Week-to-Week: 2 Weeks’ Rent
- Month-to-Month: 1½ Months’ Rent
- Longer than Month-to-Month: 2 Months’ Rent
However, these limits and other security deposit rules only apply to landlords that lease whole dwelling units, rather than single rooms within a unit.
Can Landlords Charge an Additional Pet Deposit in North Carolina?
In North Carolina, landlords can charge a pet deposit, except for service dogs and emotional support animals. However, the total refundable deposit cannot exceed the maximum security deposit amount. Landlords cannot exceed this limit by asking for money under another label like “pet deposit” or “damage deposit.”
However, this does not prevent landlords from adding a monthly pet premium and/or a reasonable, non-refundable pet fee that exceeds the security deposit limits. The law looks at this not as a deposit, but rather as an added expense in exchange for the right to keep an animal on the property.
How Much Rent Can a Landlord Collect Upfront in North Carolina?
There is no limit on the amount of rent that can be collected upfront in North Carolina. Many states have a limit on the amount of rent that can be collected at once, but North Carolina does not.
Security Deposit Collections in North Carolina
When collecting a security deposit, landlords in North Carolina must notify the tenant within 30 days after the start of the lease term of the name and address of the bank or institution where the tenant’s deposit is currently located or the name of the company providing the bond.
Do Landlords Have To Provide a Receipt for the Security Deposit in North Carolina?
While landlords in North Carolina must provide a written disclosure to tenants containing information such as where the security deposit will be held, an additional receipt of the deposit is not required to be provided.
What Obligations Do Landlords Have To Establish the Condition at Move-in in North Carolina?
North Carolina law does not require landlords to document or establish the property’s condition at move-in. While other states legally require a written inventory of damages to be completed when collecting a security deposit, North Carolina does not.
Security Deposit Holdings in North Carolina
Landlords in North Carolina must hold security deposits in one of two places: a trust account or by posting a surety bond.
Option 1: Trust account. The landlord may place the security deposit in a licensed and state or federally-insured trust account.
Option 2: Surety bond. The landlord may post a surety bond with an insurance company licensed to do business in North Carolina.
If the security deposit from the tenant is held in a trust account outside of the State of North Carolina, the landlord must also provide the tenant with a bond in the amount of the deposit.
Are Tenants Entitled to Interest on Their Security Deposit in North Carolina?
North Carolina law does not require landlords to provide interest on held security deposits.
How Are Security Deposits Accounted for in North Carolina?
Security deposits are not considered taxable income when they are collected.
What Happens to a Security Deposit When the Property is Sold in North Carolina?
Within 30 days of the sale of a property in North Carolina, the landlord or their agent can make any allowable deductions and then do one of the following:
- Transfer any remaining portion of the security deposit to the new owner and notify the tenant by mail of the new owner’s name and address
- Return any remaining portion of the deposit to the tenant
Sources
- 1 N.C. Gen. Stat. § 42-51(b)
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The security deposit shall not exceed an amount equal to two weeks’ rent if a tenancy is week to week, one and one-half months’ rent if a tenancy is month to month, and two months’ rent for terms greater than month to month. These deposits must be fully accounted for by the landlord as set forth in G.S. 42-52.
Source Link - 2 N.C. Gen. Stat. § 42-56
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The provisions of this Article shall apply to all persons, firms, or corporations engaged in the business of renting or managing residential dwelling units, excluding single rooms, on a weekly, monthly or annual basis.
Source Link - 3 N.C. Gen. Stat. § 42-53
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Notwithstanding the provisions of this section, the landlord may charge a reasonable, nonrefundable fee for pets kept by the tenant on the premises.
Source Link - 4 N.C. Gen. Stat. § 42-50
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Security deposits from the tenant in residential dwelling units shall be deposited in a trust account with a licensed and federally insured depository institution or a trust institution authorized to do business in this State, or the landlord may, at the landlord’s option, furnish a bond from an insurance company licensed to do business in North Carolina. The security deposits from the tenant may be held in a trust account outside of the State of North Carolina only if the landlord provides the tenant with an adequate bond in the amount of the deposits. The landlord or the landlord’s agent shall notify the tenant within 30 days after the beginning of the lease term of the name and address of the bank or institution where the tenant’s deposit is currently located or the name of the insurance company providing the bond.
Source Link - 5 N.C. Gen. Stat. § 42-54
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Upon termination of the landlord’s interest in the dwelling unit in question, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or his agent shall, within 30 days, do one of the following acts, either of which shall relieve him of further liability with respect to such payment or deposit:(1) Transfer the portion of such payment or deposit remaining after any lawful deductions made under this section to the landlord’s successor in interest and thereafter notify the tenant by mail of such transfer and of the transferee’s name and address; or(2) Return the portion of such payment or deposit remaining after any lawful deductions made under this section to the tenant.
Source Link
