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What happens to my security deposit?

On Behalf of | Jan 22, 2018 | Landlord/tenant Matters |

When you become a tenant in North Carolina, chances are you will have to budget in a security deposit to hand over to your new landlord. However, this money does not simply go into the landlord’s pocket to be used for whatever he or she deems necessary. In fact, as the tenant, you will know exactly where that deposit is going and how — if at all — it will be spent. 

According to the state’s Tenant Security Deposit Act, the money from a security deposit is held in trust at either a bank or savings association and must be federally insured. As a tenant, you have the right to know the name of the institution where the money is being held along with insurance details.

While the security deposit can be used by your landlord to pay for an array of issues, the damage caused to a property due to the regular wear and tear occurring by simply living there is not one of them. The money can be used, however, once the tenant moves out for payment of utility bills that are supposed to be the tenant’s responsibility per the lease agreement, damages caused by tenant negligence or destructive actions, costs associated with breaches of contract, court costs, and any fees incurred due to the tenant’s residency at the property.

Once your status as a tenant has ended, you can expect your security deposit back within the next 30 days. If the landlord makes any deductions, he or she will need to give an itemization of the issues and the costs associated with each, along with your remaining balance, within those 30 days. Forget to leave your new address with your landlord? Not to worry — you may still be able to obtain the balance you are owed. The landlord must keep the security deposit for a minimum of six months after your tenant status has ended to allow time to collect.

Keep in mind that pet deposits are not necessarily considered to be part of the security deposit and may not be refundable at all based on the lease agreement you sign.

This post is solely written as an informative resource and should not be interpreted as giving legal advice.

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