North Carolina Security Deposit and Damage Deposit Rules Explained

Knowing your rights about security deposits is important for every renter in North Carolina. Whether you're moving in or getting ready to move out, understanding how security and damage deposits work can help you avoid disputes and keep your money protected. This guide explains what North Carolina law says about deposits, how they are handled, and what to do if you have issues with your landlord.

Understanding Security Deposits vs. Damage Deposits in North Carolina

In North Carolina, the law refers to all types of tenant deposits—whether for damages, unpaid rent, or cleaning—as “security deposits.” There is no separate legal definition for a “damage deposit”; all fall under the North Carolina Security Deposit Act.^[1]

• Security Deposit: Money paid by the renter to the landlord before moving in to cover possible damages, unpaid rent, or other lease violations.
• Landlords in North Carolina cannot request a separate “damage deposit”—all deposit money is subject to the same laws and protections.
• Deposits must be returned to renters minus any lawful deductions once the lease ends.

Deposit Limits and Rules

• For month-to-month leases: Up to 1.5 months’ rent may be charged.
• For leases longer than month-to-month: Up to two months’ rent.
• The deposit must be kept in a trust account with a licensed North Carolina bank or a bond secured, and the renter must be notified of its location within 30 days of paying it.

When Can a Security Deposit Be Kept?

Landlords may deduct from the deposit only for:

• Unpaid rent or late fees
• Damage beyond normal wear and tear
• Costs for re-renting if you break your lease
• Unpaid utility bills
• Cost of removing abandoned property after move-out

Normal wear and tear—like faded paint or carpet worn with age—cannot be deducted.

Getting Your Security Deposit Back

• Within 30 days of move-out, the landlord must send a detailed written statement showing any deductions and return the remaining amount.
• If unable to determine the full amount within 30 days (e.g., if bills are still pending), a temporary accounting must be sent, and a final statement delivered within 60 days.

If you leave no forwarding address, the landlord may hold the deposit until you contact them.

Required Forms for North Carolina Renters

• Move-Out Inspection Checklist (optional, no official state form): Documenting the condition of your rental at move-in and move-out is a smart way to prevent disputes. You may use a written checklist (sample forms are often provided by landlords) and get both parties to sign it.
• Small Claims Complaint (AOC-CVM-201): If you believe your deposit was wrongly withheld, file a complaint in Small Claims Court.
  Example: If your landlord keeps your deposit without explanation, submit Small Claims Complaint (AOC-CVM-201) to the district court in your county after sending your landlord a written demand for return.

Which Tribunal Handles Deposit Disputes?

Security deposit disputes in North Carolina are handled by the North Carolina Small Claims Court, part of the state’s District Court system.

The principal legislation governing these rights is the North Carolina Security Deposit Act and Chapter 42 of the North Carolina General Statutes.^[1][2]

Frequently Asked Questions

1. How long does my landlord have to return my security deposit in North Carolina?
   Landlords must return your security deposit or provide an itemized list of deductions within 30 days of your lease ending.
2. Can a landlord ask for both a security deposit and damage deposit in NC?
   No, all deposits are treated as security deposits under North Carolina law; a separate damage deposit is not allowed.
3. What can I do if my landlord does not return my deposit?
   If your landlord does not respond within 30 days, you can file a claim in Small Claims Court using the proper complaint form.
4. Does my landlord have to tell me where the deposit is held?
   Yes, within 30 days of receiving your deposit, the landlord must notify you in writing of the bank or institution and the account holding your money.
5. Can deductions be made for normal wear and tear?
   No, only damages beyond normal wear and tear can be lawfully deducted from your deposit.

Conclusion: Key Takeaways for North Carolina Renters

• North Carolina combines all renter deposit types under the Security Deposit Act;
• Landlords cannot require more than the legal maximums and must return deposits or provide estimates within the deadlines;
• If there is a dispute, you can access Small Claims Court for a resolution using the required forms.

Knowing your rights as a renter in North Carolina helps you protect your money and avoid common pitfalls with deposits.

Need Help? Resources for Renters

• North Carolina Courts: Landlord/Tenant Issues—Find helpful guides, court information, and filing instructions.
• NC Department of Justice: Landlord-Tenant Rights & Resources—Access consumer protection support and advice.
• Legal Aid of North Carolina—Free legal help for qualifying renters facing housing disputes.
• Form: Small Claims Complaint (AOC-CVM-201)

---

1. North Carolina Security Deposit Act, NC General Statutes §42-50 to §42-56. See full text: North Carolina Security Deposit Act PDF
2. North Carolina General Statutes, Chapter 42 – Landlord and Tenant: Chapter 42 full text

Categories

Renter Rights & Legal Protections Lease Agreements & Renewals Rent, Fees & Security Deposits Moving In: Inspections & Disclosures Moving Out & Ending a Lease Maintenance, Repairs & Habitability Health & Safety Standards Evictions & Lease Violations Roommates, Subletting & Shared Housing Discrimination & Fair Housing Laws Accessibility & Disability Accommodations Utilities, Services & Billing Affordable Housing & Rental Assistance Rent Control & Rent Stabilization Privacy Rights & Landlord Entry Security, Locks & Emergency Protections Dispute Resolution & Legal Aid Retaliation & Harassment Protections Mobile Home & Manufactured Housing Rights Special Housing Types & Situations