General information, not legal advice. Landlord-tenant rules change, and cities and counties can add their own. Check the current statute and local ordinances, and talk to a licensed attorney before you act.
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The short version
- A deposit may not exceed two weeks of rent for a week-to-week tenancy, one and a half months for month-to-month, and two months for longer terms.
- The landlord must return the deposit, with an itemized list of any damage, within 30 days after the tenancy ends, or send an interim accounting then and a final one within 60 days if the claim is not yet known.
- Deductions must be itemized in writing, may not cover normal wear and tear, and may not exceed the landlord's actual damages.
- A landlord who willfully fails to follow the deposit, bond or notice rules loses the right to keep any part of the deposit, and the tenant may sue for the balance.
- State law generally does not require landlords to pay interest on deposits.
The North Carolina Tenant Security Deposit Act caps deposits by the length of the tenancy, requires the money to be held in a trust account or covered by a bond, and gives landlords 30 days to account for it after move out.
North Carolina security deposits at a glance
| Rule | North Carolina | Law |
|---|---|---|
| Deposit limit | A deposit may not exceed two weeks of rent for a week-to-week tenancy, one and a half months for month-to-month, and two months for longer terms. | N.C. General Statutes section 42-51 |
| Deadline to return the deposit | The landlord must return the deposit, with an itemized list of any damage, within 30 days after the tenancy ends, or send an interim accounting then and a final one within 60 days if the claim is not yet known. | N.C. General Statutes section 42-52 |
| Itemized deductions | Deductions must be itemized in writing, may not cover normal wear and tear, and may not exceed the landlord's actual damages. | N.C. General Statutes section 42-52 |
| Interest on deposits | State law generally does not require landlords to pay interest on deposits. | Tenant Security Deposit Act (no interest rule) |
| Penalty for wrongful withholding | A landlord who willfully fails to follow the deposit, bond or notice rules loses the right to keep any part of the deposit, and the tenant may sue for the balance. | N.C. General Statutes section 42-55 |
How much you can collect
Deposit limit. A deposit may not exceed two weeks of rent for a week-to-week tenancy, one and a half months for month-to-month, and two months for longer terms. (N.C. General Statutes section 42-51)
Holding the deposit
Where the deposit is held. The deposit must be kept in a trust account at a licensed, federally insured institution, or the landlord may instead post a bond from an insurer licensed in North Carolina. (N.C. General Statutes section 42-50)
Interest on deposits. State law generally does not require landlords to pay interest on deposits. (Tenant Security Deposit Act (no interest rule))
Receipts and notices. Within 30 days after the lease begins, the landlord must give the tenant the name and address of the bank holding the deposit or the insurer providing the bond. (N.C. General Statutes section 42-50)
Deductions and normal wear and tear
A deposit can cover unpaid rent and damage beyond normal wear and tear. Everyday aging, such as faded paint, small nail holes or light carpet wear, is not damage.
Itemized deductions. Deductions must be itemized in writing, may not cover normal wear and tear, and may not exceed the landlord's actual damages. (N.C. General Statutes section 42-52)
Returning the deposit
Deadline to return the deposit. The landlord must return the deposit, with an itemized list of any damage, within 30 days after the tenancy ends, or send an interim accounting then and a final one within 60 days if the claim is not yet known. (N.C. General Statutes section 42-52)
Penalties for wrongful withholding
Penalty for wrongful withholding. A landlord who willfully fails to follow the deposit, bond or notice rules loses the right to keep any part of the deposit, and the tenant may sue for the balance. (N.C. General Statutes section 42-55)
Mistakes to avoid
- Skipping a dated move-in condition report with photos, then having nothing to compare against at move out.
- Charging for normal wear and tear.
- Missing the return deadline, even by a few days.
- Not asking for a forwarding address before the tenant leaves.
- Losing track of deposit money by mixing it with operating funds without a ledger.
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General information, not legal advice.
Verify current law
We last checked these North Carolina rules on . Laws change and cities can add their own, so confirm the current text before you rely on it, and talk to a North Carolina attorney about your situation.
Laws named on this page
- N.C. General Statutes section 42-51
- N.C. General Statutes section 42-52
- Tenant Security Deposit Act (no interest rule)
- N.C. General Statutes section 42-55
- N.C. General Statutes section 42-50
Official sources
North Carolina forms for this topic
Letters and checklists for this topic
Asked by landlords in this state.
Is there a limit on security deposits in North Carolina?
A deposit may not exceed two weeks of rent for a week-to-week tenancy, one and a half months for month-to-month, and two months for longer terms. Source: N.C. General Statutes section 42-51.
How long does a North Carolina landlord have to return a deposit?
The landlord must return the deposit, with an itemized list of any damage, within 30 days after the tenancy ends, or send an interim accounting then and a final one within 60 days if the claim is not yet known. Source: N.C. General Statutes section 42-52.
Do North Carolina landlords have to pay interest on deposits?
State law generally does not require landlords to pay interest on deposits. Source: Tenant Security Deposit Act (no interest rule).
What happens if a North Carolina landlord keeps a deposit wrongly?
A landlord who willfully fails to follow the deposit, bond or notice rules loses the right to keep any part of the deposit, and the tenant may sue for the balance. Source: N.C. General Statutes section 42-55.