North Carolina security deposit law

• Mail or deliver the itemized damages and the balance no later than 30 days after the tenancy ends and possession is returned to the landlord.
• Send an interim accounting within 30 days and a final accounting within 60 days after the tenancy ends and possession is returned.

If the tenant's address is unknown, the landlord applies the deposit after 30 days and holds the balance for the tenant to collect for at least 6 months.

Required: Yes. A written itemization of any damage, mailed or delivered with the balance.

No deductions for normal wear and tear, and no keeping more than actual damages. Allowed uses include unpaid rent and certain utilities, damage (including to smoke and CO alarms), damages for not completing the rental period, liens from the tenant's occupancy, re-rental costs after a breach, storage after eviction, court costs, and fees allowed by G.S. 42-46.

A landlord may charge a reasonable nonrefundable pet fee (G.S. 42-53). Fees allowed by G.S. 42-46 (such as late fees) may be taken from the deposit.

• Interest required: No. No statewide interest requirement.
• Separate account required: Yes. The deposit must go into a trust account at a licensed, federally insured depository or trust institution in North Carolina, or the landlord may furnish a bond from a licensed insurer instead. An out-of-state trust account requires a bond. Within 30 days after the lease begins, the tenant must be told the name and address of the bank or the bonding company.
• Move-in inspection required: No. The statute does not require a move-in inspection.

The tenant may sue for an accounting and the balance plus damages. A willful failure to follow the deposit, bond or notice rules voids the landlord's right to keep any of the deposit. The court may award attorney's fees for willful noncompliance (G.S. 42-55).

Willful noncompliance with the deposit, bond or notice rules forfeits the right to keep any part of the deposit and opens the door to attorney's fees.

Magistrate small claims up to $10,000. The limit is $5,000–$10,000 depending on local rules. Court information

Before filing, many tenants send a written demand first. Write a North Carolina demand letter →

• The Act covers anyone in the business of renting residential units weekly, monthly or yearly. Single rooms are excluded (G.S. 42-56).
• When the landlord's interest ends (sale, death and so on), within 30 days the landlord must transfer the deposit to the successor and notify the tenant, or return it to the tenant (G.S. 42-54).
• Vacation rental deposits under Chapter 42A follow this Act, but the landlord has 45 days after the tenancy ends to account for or refund the deposit and can't use a bond instead of a trust account (G.S. 42A-18).
• No deduction for not finishing the rental period is allowed if the tenant ended the lease under G.S. 42-45 (military) or 42-45.1 (domestic violence, sexual assault or stalking), had to leave because of the landlord's violation of Article 2A, or was constructively evicted by the landlord's violation of G.S. 42-42(a) (G.S. 42-51(a)(3)).

• N.C. Gen. Stat. Chapter 42, Article 6 (§§ 42-50 to 42-56) Retrieved October 11, 2026.
• NC Judicial Branch: Small Claims Retrieved October 11, 2026.
• N.C. Gen. Stat. § 42A-18 Retrieved October 11, 2026.

Laws change. This page was checked against the sources above on October 11, 2026. It is legal information, not legal advice; see our methodology.