How to Hold and Return a Security Deposit in North Carolina

In North Carolina, landlords and their agents can require that tenants provide deposits in addition to the rent. Deposits can't be greater than:

• Two weeks' rent if a tenancy is week to week
• One and one-half months' rent if a tenancy is month to month
• Two months' rent for terms greater than month to month.²

Storing the Deposit

North Carolina state law demands that a security deposit be held in a trust account with a location in North Carolina. Tenants must receive notification with the name and address of the bank where the deposit is held within 30 days of the beginning of the lease.¹

How to use the deposit

The deposit can be used to cover any unpaid rent or utility bills or to cover the cost of any damages to the unit that exceed normal wear and tear. The deposit can also be used to cover the cost of re-renting the space if the tenant breaks the lease agreement by leaving early or to cover the cost of removing and storing a tenant's stuff if they are evicted.²

Landlords must alert tenants to any amount they plan to withhold within 30 days of the end of the lease. All claims on the deposit must be itemized in writing and provided to the tenant. ³

Returning the Deposit

The deposit must be returned within 30 days of the end of the lease term if it is being returned in full.³

Sources

[1] NC Gen Stat § 42-50 (2022)

[2] NC Gen Stat § 42-51 (2022) (2022)

[3] NC Gen Stat § 42-52 (2022)