North Carolina Security Deposit Returns & Deductions

North Carolina Security Deposit Returns & Deductions

Last Updated: January 5, 2023 by Ashley Porter

Quick Facts Answer
Acceptable Deductions
  • Unpaid rent, late fees, utilities & bills
  • Costs of damage
  • Damages due to early termination
  • Costs of re-renting due to breach of lease
  • Costs to remove or store tenant’s belongings
  • Court costs
Return Deadline 30 days
Itemized Deductions Required
Penalty for Late Return Amount due + attorneys’ fees

For laws on security deposit collections and holdings in North Carolina, click here.

Security Deposit Deductions in North Carolina

In North Carolina, the following things can be deducted from security deposits:

  • Unpaid rent, late fees, utilities, or bills
  • Costs of damage excluding normal wear and tear
  • Damages as a result of early termination of the lease
  • Costs of re-renting the unit as a result of a breach of the lease
  • Costs to remove or store tenant’s belongings
  • Court costs

Most states, such as North Carolina, do not have a legal limit on how much a landlord can charge for damages except that the charges must not exceed the actual costs to the landlord.

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear & Tear vs Damage in North Carolina?

Normal wear and tear is damage that is expected when a rental unit is used in a normal way, such as gently worn carpets and faded walls. Damage is the destruction caused by abusive or negligent use of a rental unit, like ripped carpets and heavily stained walls.

“Normal wear and tear” is deterioration that occurs naturally as a result of the tenant using the property as it was designed to be used.

Examples include:

  • Gently worn carpets
  • Lightly scratched glass
  • Faded paint and flooring
  • Lightly dirtied grout
  • Loose door handles
  • Stained bath fixtures

“Damage” means destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy.

Examples include:

  • Heavily stained, burned, or torn carpets
  • Broken tiles or windows
  • Holes in the wall
  • Missing fixtures

Can the Landlord Charge for Replacing the Carpet in North Carolina?

Yes, landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Some wear and tear on a rental unit’s carpet is expected after normal day-to-day use of the property. For example, carpets typically become discolored, indented, or gently worn, when used in a normal way. However, non-typical, abusive use of carpet results in rips, visible stains, or burns. Landlords have the right to charge the tenant for the replacement of the carpet in areas where serious damage has occurred.

Can the Landlord Charge for Nail Holes in North Carolina?

Yes, landlords can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures. However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in North Carolina?

Landlords in North Carolina can charge a cleaning fee if it is specifically stated in the lease agreement.

Landlords can also make deductions for cleaning from the security deposit if the tenant causes damage that requires the unit to be cleaned.

Can the Landlord Charge for Painting in North Carolina?

Yes, in North Carolina, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

  • Causes damage beyond normal wear and tear
  • Repaints the wall but is not permitted to do so under the lease agreement
  • Repaints the wall in an unprofessional way

Normal wear includes minor scrapes from daily use, fading due to sunlight, or minor cracks in the original paint. Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Can a Security Deposit Be Used for Last Month’s Rent in North Carolina?

North Carolina law does not forbid the security deposit from being used for any outstanding rent.

Landlords can include a provision in the lease agreement that the security deposit cannot be used for the last month’s rent until the tenant vacates the rental unit.

Security Deposit Returns in North Carolina

Landlords must return a security deposit with an itemized statement (if there are deductions) to the tenant’s last known address no later than 30 days after the lease ends and the tenant vacates the rental unit.

How Long Do Landlords Have to Return Security Deposits in North Carolina?

North Carolina landlords have 30 days after the lease ends and the tenant vacates the rental unit to return any unused portion of the security deposit.

Do Landlords Owe Interest on Security Deposits in North Carolina?

Unlike in some states, such as New Jersey, landlords in North Carolina do notowe interest on security deposits.

How Do Landlords Give Notice / What Information Do They Have to Provide in North Carolina?

If deductions are to be made from the security deposit, an itemized statement of damages must be sent by mail or hand-delivery to the tenant’s last known address no later than 30 days after the lease ends and the tenant vacates the rental unit.

If the landlord cannot determine their damages within 30 days, they must provide the tenant with an estimate by 30 days and then a final accounting of damages within 60 days after the lease ends and the tenant vacates the rental unit.

If the landlord does not know the tenant’s address, they must hold the remaining portion of the security deposit for the tenant to claim for at least six months.

Security Deposit Disputes in North Carolina

If landlords do not return the security deposit within the required time period, tenants can file a claim in court for up to the amount of the deposit due to the tenant plus reasonable attorneys’ fees.

Tenants can also take legal action against a landlord for:

  • Failure to provide an itemized statement that lists deductions if the security deposit is not returned in full
  • Failure to hold the security deposit in an escrow account or post a bond
  • Unreasonable deductions

If the court finds that the landlord intentionally failed to comply with the security deposit rules, the tenant may be awarded the full amount of the security deposit.

How Can Tenants File a Dispute for a Security Deposit in North Carolina?

If a landlord fails to perform their obligations regarding a security deposit, the tenant can file a dispute in the small claims division of District Court if the amount of damages is less than $10,000, although the maximum claim amount in some counties is $5,000. If the amount is greater, the tenant must file a civil case in District Court.

A small claims case regarding the return of a security deposit must be filed within 3 years. Cases are filed in the District Court where the defendant lives. An attorney is not required but permitted.Filing fees are $96.

Our website provides more information about the process of filing a dispute in Small Claims Court.

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