The rules and regulations governing security deposits are much misunderstood by both landlords and property managers. Part of the confusion stems from the fact that these laws vary from state to state. Many states limit the amount of deposit which can be held, but the amount varies according to the state.
What security deposit can you hold in North Carolina?
In North Carolina where Talley Properties operates, the rules are briefly as follows:
For tenants who occupy on a week-to-week basis the maximum is two week’s rent
For tenants who occupy on a month-to-month basis the maximum is a month-and-a-half’s rent
Beyond month-to-month, the maximum security deposit which the tenant can be asked to pay is two-month’s rent.
In addition the tenant could be asked to pay a reasonable amount as pet deposit. Pet deposit is non-refundable.
Do you have to pay interest on the security deposit?
Another factor is that in some states the landlords or property managers are required to pay interest on the deposit. As a safeguard:
In North Carolina the amount must be deposited in a trust account in a financial institution or licensed and insured bank located in NC.
Alternatively the landlord/property manager could decide to post a bond for the security deposit amount within the state. After that a trust account can be opened outside the state.
In North Carolina the landlord/property manager must inform the tenant within thirty days of the name and address of the financial institution or bank where the deposit is being held, or the insurance company which posted the bond.
What if I have broken the rules?
The landlord/property manager might be denied the right to keep the security deposit if these rules are violated so it’s important to know the rules that prevail and abide by them. If the right to security deposit is lost and the tenant causes considerable damage, there is no remedy. What’s even worse is that a judge could rule against the violation which might cost the landlord/property manager two or three times the amount of the deposit which will have to be paid to the tenant.
What are the reasons for you to withhold a security deposit in North Carolina?
Some of the reasons are:
If the rent is unpaid
If utility bills are unpaid
If the lease is breached
The cost of re-renting the property
If the tenant has to be evicted the cost of moving and storing the tenant’s possessions
If the tenant has run up any unpaid bills which could cause a lien against the property
When is the tenant’s security deposit to be refunded?
In North Carolina generally within 30 days of the tenant moving out the landlord has to return the security deposit in person or by mail unless there are deductions when the period can be extended.
Talley Properties of Charlotte, NC is an icon among property management companies in the region having been in the business for over three decades. Because of its efficiency and satisfactory services, the company has now expanded its area of operations to management of commercial and residential rental properties into the surrounding counties.