North Dakota’s security deposit law sets clear rules for how landlords collect, hold, and return tenant funds. Knowing these requirements helps property owners avoid common problems like disputed deductions, improper handling, or missed return deadlines.
This guide breaks down what landlords need to know, including how much they can charge, proper storage requirements, whether interest applies, lawful reasons for deductions, return timelines, dispute resolution, and other key compliance details.
Statutes Regulating North Dakota Security Deposits
North Dakota’s security deposit laws are set out in Section 47-16-07.1 of the North Dakota Century Code, which outlines how landlords collect, hold, and return residential security deposits.
Some cities and counties may have regulations that are more restrictive than those presented here. Always check local laws before collecting a security deposit.
Maximum Security Deposit Amounts Under North Dakota Law
| Quick Facts | Answer |
| Maximum / Limit | 1 Month’s Rent (With Exceptions) |
| Receipt Requirement | None |
| Inventory Requirement | Yes |
| Interest Requirement | Yes (Leases over 9 Months) |
North Dakota generally limits security deposits to one month’s rent for residential leases. However, if a tenant has a felony conviction or a history of eviction, landlords may require a higher deposit, up to two months’ rent.
State law also allows landlords to charge a separate pet deposit. This additional deposit may equal up to the greater of $2,500 or two months’ rent. This rule does not apply to service animals or assistance animals, and landlords may not charge extra deposits for those animals.
Security Deposit Storage Regulations
North Dakota law does not require landlords to issue a specific receipt or to notify tenants where the security deposit account is located. However, the law does require landlords to place security deposits in a federally insured, interest-bearing account for the tenant’s benefit and to pay the interest earned on that deposit when the tenancy exceeds nine months. Landlords must keep the funds available for return at the end of the lease.
Security Deposit Interest in North Dakota
North Dakota law does not require landlords to place security deposits in an interest-bearing account. Still, when a tenancy lasts longer than 9 months, landlords must pay interest at a rate equal to the interest paid on savings deposits in North Dakota financial institutions.
Making Security Deposit Deductions
Landlords use security deposit deductions to maintain the long-term health of a rental property and protect the value of their units. Tenants sometimes call short on rent or leave damage beyond normal wear and tear, and landlords need funds available to complete repairs to return the property to its previous condition.
When Landlords Can Deduct
North Dakota landlords may deduct from a tenant’s security deposit for the following reasons:
- Damage that exceeds normal wear and tear and requires repair
- Unpaid rent that remains outstanding at the end of the tenancy
- Cleaning costs needed to restore the unit to its earlier condition
- Repairs for unauthorized alterations completed without landlord approval
- Losses that result from the tenant breaching lease obligations
When Landlords Can’t Deduct
North Dakota landlords may not deduct from a tenant’s security deposit for the following reasons:
- Routine maintenance tasks that fall under the landlord’s responsibility
- Wear that reflects everyday use of fixtures, surfaces, and appliances
- Issues caused by normal aging or deterioration of the property
- Cosmetic concerns that do not affect function or livability
- Problems documented as preexisting before the tenant moved in
Necessary Documentation to Accompany Deductions
North Dakota law does not require landlords to give tenants receipts or invoices when making security deposit deductions. The law requires an itemized written list of deductions by the required deadline, but landlords may include supporting documents to offer tenants more details.
What to Do When Deductions are Greater Than the Deposit
Sometimes, tenant damage or unpaid charges exceed the security deposit. In those cases, landlords can seek the remaining costs from former tenants, supported by documentation such as invoices and receipts. North Dakota law requires landlords to return any unused portion of the deposit and provide a written, itemized list of lawful deductions within 30 days after the tenant moves out.
If a former tenant refuses to pay amounts owed beyond the deposit, landlords can pursue the debt through a collections agency or by filing a claim in North Dakota small claims court.
Returning Security Deposits to Tenants
North Dakota law explains how landlords must return the remaining portion of a tenant’s security deposit after taking any eligible deductions, thereby setting clear expectations at the end of a tenancy.
Required Timeline for Return
North Dakota requires landlords to return the security deposit or provide an itemized list of deductions within 30 days after the tenancy ends and the tenant hands back possession. The 30-day period starts once the tenant fully vacates the unit and returns the keys.
Method for Return
Landlords in North Dakota can return the deposit through any reliable payment method, including a check or electronic transfer. When landlords return only part of the deposit, they must include an itemized written list of deductions and send it within the same 30-day timeline.
Penalties for Late Return
If a landlord does not meet the 30-day requirement, the law holds them responsible for any amount wrongfully withheld. Tenants may also recover court costs and reasonable attorney fees when a landlord fails to follow statutory requirements.
Security Deposit Disputes
If a tenant disagrees with how a landlord handles a security deposit, they have every right to raise a dispute. Tenants usually begin by requesting clarification in writing, reviewing the itemized deductions, and asking the landlord to revisit any charges they believe fall outside North Dakota law.
As a landlord, prepare for security deposit disputes by using move-in and move-out checklist forms, keeping up with accounting and bookkeeping, and outlining clear terms within your lease agreement. Strong documentation, a solid understanding of North Dakota requirements, and strict attention to all deadlines can also help you navigate disputes.
Using Condition Reports to Document Damage
When handling security deposits in North Dakota, landlords should use detailed move-in and move-out condition reports to document the unit’s condition at both the start and end of a tenancy. These reports create clear records, reduce disputes, and make the deposit return process far more straightforward for landlords.
Using property management software allows landlords to create digital condition reports with photos and videos directly from a smartphone. Thorough documentation during turnover often makes security deposit decisions straightforward.
Sign up for a free TurboTenant account to collect security deposits, store important documents, and make deductions with ease.
FAQs: North Dakota Security Deposit Law
Can a landlord deduct painting from a security deposit in North Dakota?
A landlord in North Dakota may deduct painting costs only when wall damage goes beyond normal wear and tear. Excessive marks, unauthorized paint colors, or significant surface damage can justify a deduction, while routine touch-ups fall under regular upkeep and do not qualify.
Are nail holes considered normal wear and tear in North Dakota?
Small nail holes that form from typical hanging of items usually count as normal wear and tear in North Dakota. Because these marks reflect ordinary living, landlords cannot deduct repair costs unless the holes are excessive or cause clear damage to the wall.
Does the landlord or tenant have to pay for carpet cleaning in North Dakota?
A landlord in North Dakota may charge a tenant for carpet cleaning only when the tenant leaves unusual dirt, stains, or damage that exceeds normal wear and tear. Standard cleaning after an ordinary tenancy remains a landlord’s responsibility and does not qualify for deduction.
What happens if a landlord doesn’t return a security deposit within 30 days in North Dakota?
If a North Dakota landlord misses the 30-day deadline to return the security deposit or provide a written, itemized statement of deductions, the landlord may lose the right to keep any of the deposit and can be held liable for wrongfully withheld funds. Tenants have the right to file a claim in court to recover the unpaid deposit, and the law allows them to seek damages, court costs, and attorney fees if they prevail.
