The Security Deposit: What Landlords Need To Know (Part 2)
Every residential landlord in North Carolina should be familiar with NC General Statute Sections 42-50 to 42-56, titled the “North Carolina Tenant Security Deposit Act.” Under such statute, a landlord is permitted to use a security deposit for all of the following reasons:
- Tenant’s nonpayment of rent
- Tenant’s water, sewer, and electric bills (also applicable when the Landlord and Tenant share services)
- Damage to the premises that is outside of normal wear and tear
- Damages from leaving prior to the end of a lease (e.g. freezing pipes from non-use)
- Any unpaid bills that become a lien on the property
- Costs of re-renting the premises after breach by the tenant
- Costs of removal and storage of the tenant’s property after a summary ejectment proceeding (“eviction”)
- Court costs
- Late fees from rental payments (see G.S. 42-46 for conditions)
- Complaint-filing fee (see G.S. 42-46 for conditions)
- Court-appearance fee (see G.S. 42-46 for conditions)
- Second trial fee (see G.S. 42-46 for conditions)
However, please note that the landlord can only use these above uses where the landlord acted in accordance with all relevant statutes. For instance, if a landlord violated a requirement within the statute, he or she may be precluded from using the security deposit to cover costs (described above), and may have to reimburse the tenant for the landlord’s shortcomings.
If a landlord is uncertain about his or her rights or about what is provided for in the residential lease that they used, it is recommended to seek the aid of a North Carolina Attorney.
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