North Carolina’s Tenant Security Deposit Act controls how much a landlord in Raleigh may collect, where the money must be kept, what it may be used for, and when it must come back. In the Raleigh and Cary metro area, about 191,700 of the Raleigh and Cary metro area’s 574,300 occupied homes, or 33.4 percent, are rented, according to the U.S. Census Bureau’s 2020 to 2024 American Community Survey (Homzora Raleigh dataset, Table B25003). The median gross rent is $1,573 a month (Homzora Raleigh dataset, Table B25064), and the median renter household earns $62,591 a year (Homzora Raleigh dataset, Table B25119), so the median rent equals about 30 percent of the median renter household’s gross income.
This guide walks through each section of the Act as it applies to renters, with a worked example and a sample letter.
Homzora is a housing research publisher, not a law firm. This article explains the law in plain English and is not legal advice for your situation.
Quick answers
- Maximum: two weeks’ rent for week to week, one and a half months’ rent for month to month, and two months’ rent for longer terms (N.C. Gen. Stat. § 42-51).
- Where it is held: a trust account at a licensed, federally insured bank or trust institution in North Carolina, or a bond (N.C. Gen. Stat. § 42-50).
- Refund deadline: 30 days after termination and delivery of possession, with an itemized statement of damages (N.C. Gen. Stat. § 42-52).
- Wear and tear: may not be deducted (N.C. Gen. Stat. § 42-52).
How much the deposit can be
| Type of tenancy | Maximum deposit |
|---|---|
| Week to week | Two weeks’ rent |
| Month to month | One and one half months’ rent |
| Longer than month to month, such as a one year lease | Two months’ rent |
These limits come from Section 42-51 (N.C. Gen. Stat. § 42-51). At Raleigh’s median gross rent of $1,573, a one year lease could carry a deposit of up to $3,146, and a month to month tenancy up to $2,360.
Where the money must be kept
The landlord must either deposit the money in a trust account with a licensed and federally insured bank or trust institution authorized to do business in North Carolina, or obtain a bond from an insurance company licensed in the state. Within 30 days after the lease term begins, the landlord must tell you the name and address of the bank, or the name of the insurer providing the bond (N.C. Gen. Stat. § 42-50).
What the deposit may be used for
Section 42-51 limits deposits to specific uses (N.C. Gen. Stat. § 42-51):
- Unpaid rent and certain water, sewer, and electric charges.
- Damage to the premises, including damage to or destruction of smoke or carbon monoxide alarms.
- Losses from the tenant ending the tenancy early, except when the tenant had a lawful right to terminate or was forced out by the landlord’s violations.
- Unpaid bills that become a lien on the property because of the tenant’s occupancy.
- Costs of rerenting after the tenant’s breach, including reasonable broker fees.
- Costs of removing and storing property after a summary ejectment, court costs, and fees permitted under Section 42-46.
Moving out: the 30 day rule
Within 30 days after the tenancy ends and you deliver possession, the landlord must itemize any damages in writing and deliver or mail that itemization with the remaining balance. If the landlord cannot determine its claim within 30 days, it must provide an interim accounting within 30 days and a final accounting within 60 days. The landlord may not withhold deposit money for normal wear and tear and may not keep more than its actual damages (N.C. Gen. Stat. § 42-52).
If your address is unknown, the landlord applies the deposit as permitted after 30 days and holds any balance for you to collect for at least six months (N.C. Gen. Stat. § 42-52). Give your forwarding address in writing on move out day so the refund reaches you.
If the landlord does not follow the rules
A tenant may sue to compel an accounting and recover the balance. A landlord’s willful failure to comply with the deposit, bond, or notice requirements voids its right to keep any part of the deposit, and the tenant may recover damages. If a court finds willful noncompliance, it may award attorney’s fees (N.C. Gen. Stat. § 42-55).
A worked example
Suppose you rent in Raleigh at $1,573 a month on a one year lease and paid a one month deposit. You move out and return the keys on May 31. By June 30, the landlord must send an itemized statement and the balance, or an interim accounting if it cannot yet determine its claim, with a final accounting by July 30 (N.C. Gen. Stat. § 42-52). If the landlord deducts $250 to repaint walls that simply aged during a two year tenancy, that is normal wear and tear, which may not be deducted.
A sample demand letter
Date: 2026. To: [landlord]. Re: Security deposit for [address]. I delivered possession on 2026 and provided my forwarding address in writing. Under N.C. Gen. Stat. Section 42-52, you were required within 30 days to itemize any damages in writing and refund the balance, and you may not withhold for normal wear and tear. [I have received neither.] [I dispute these charges: (list).] Please send [amount] to [address] by 2026. Sincerely, [name].
Key terms
- Trust account: the account at a North Carolina bank where the deposit must be held unless the landlord posts a bond (N.C. Gen. Stat. § 42-50).
- Itemization: the written list of damages the landlord must send with any balance.
- Interim accounting: the 30 day report required when the landlord cannot yet determine its full claim.
- Willful noncompliance: the finding that can void a landlord’s right to keep the deposit and support attorney’s fees (N.C. Gen. Stat. § 42-55).
Build your evidence file
Landlord and tenant disputes are usually decided by documents. Keep these together from the day you sign:
- The signed lease, every addendum, and every renewal.
- Receipts or bank records for the deposit and each rent payment.
- Dated photos and video of every room at move in and move out.
- Copies of every repair request and the landlord’s replies.
- Every notice you send or receive, with proof of delivery.
Keep copies somewhere other than your phone, such as an email to yourself, so they survive a lost device.
Before you sign your next lease
- Ask who owns and who manages the property, and get contact details in writing.
- Read the clauses on early termination, subletting, renewal, late fees, and notice before you sign.
- Confirm the deposit amount, where it will be held, and how it will be returned.
- Walk through the unit, note existing damage in writing, and keep a signed copy.
- Ask how much notice the landlord gives before a rent increase or a non renewal.
Help in Raleigh
Legal Aid of North Carolina provides free civil legal help to eligible residents (Legal Aid of North Carolina). Rent, income, and tenure figures are free to download from the Homzora Raleigh data library.
Mistakes to avoid
- Not asking where the deposit is held. The landlord must tell you within 30 days after the lease term begins.
- Leaving without photos. Photos are usually the deciding evidence on wear and tear.
- Not giving a forwarding address. Without one, any balance is held for you to collect rather than mailed (N.C. Gen. Stat. § 42-52).
- Waiting too long. Send a written demand soon after the 30 day mark.
Frequently asked questions
Is there a separate pet deposit?
The deposit limits in Section 42-51 apply to residential security deposits; pet deposits are addressed in a separate section of the Act, so read your lease for any pet charge and how it is described (N.C. Gen. Stat. § 42-51).
My landlord kept my deposit to cover a broker fee for the next tenant. Is that allowed?
Costs of rerenting after a tenant’s breach, including reasonable broker fees, are a permitted use (N.C. Gen. Stat. § 42-51). If you did not breach the lease, those costs should not be charged.
Do I have to provide a forwarding address?
The statute does not require it, but if your address is unknown the landlord holds any balance for you to collect (N.C. Gen. Stat. § 42-52). Providing one is the fastest way to get your money.
What if the landlord never told me where the deposit is held?
The landlord must provide that information within 30 days after the lease term begins (N.C. Gen. Stat. § 42-50), and willful failure to comply can void its right to keep any part of the deposit (N.C. Gen. Stat. § 42-55).
How long will the landlord hold my refund if it cannot find me?
At least six months, for you to collect (N.C. Gen. Stat. § 42-52).
Sources
- Homzora Raleigh dataset, Table B25003
- Homzora Raleigh dataset, Table B25064
- Homzora Raleigh dataset, Table B25119
- N.C. Gen. Stat. § 42-51
- N.C. Gen. Stat. § 42-50
- N.C. Gen. Stat. § 42-52
- N.C. Gen. Stat. § 42-55
- Legal Aid of North Carolina
- Homzora Raleigh data library