Handling security deposits is a major part of being a landlord and of property management. Recent data found that just a mere 42 percent of renters said they got their entire security deposit back when they moved out.
If you own property in the Charlotte, North Carolina area, it's important to understand how security deposits work to protect yourself and your tenants.
Read on for a list of five key facts regarding tenant deposits that everyone should know if they rent property in North Carolina.
1. Applying Security Deposits
In North Carolina, tenant deposits may be applied to unpaid rent, damages the tenant caused, and damages that did not occur because of reasonable normal use. Landlords in North Carolina may also use the deposit to pay for the cost of removal and/or storage of the tenant's property. The landlord can also apply the deposit toward court and legal costs if they sue to evict the tenant.
2. Maximum Deposit Amounts
Each state has a maximum security deposit amount that landlords can collect. In the state of North Carolina, that amount depends on the length of the lease. A weekly lease deposit may equal no more than two weeks' rent, monthly leases may equal one and a half months' rent max and leases longer than a month may equal no more than two months of rent for the deposit.
3. Where to Keep Deposits
Security deposits may be kept in either a trust account or the landlord must post a surety bond. Deposits in a trust account must be held by an approved state or federally insured institution. Surely bonds must come from a licensed insurance company in North Carolina and must be in the exact amount of the original security deposit amount collected.
4. Last Month's Rent
Some landlords may opt to allow the security deposit to serve as the last month's rent. As long as you and your tenant agree to this in advance, it's perfectly legal to do so. While it's not the most common approach, some landlords prefer to do this so that they're guaranteed to receive the tenant's very last rent payment.
5. Landlord Deposit Rules: Returning Deposits
As a landlord, you must return the security deposit (or the remaining balance) within 30 days of the termination of the tenancy. You must also itemize all damages and mail the remaining amount back to the tenant. if you can't determine the cost of damages within 30 days, you must send your tenant an interim accounting within 30 days and a final accounting of damages within 60 days.
Know the Facts
Once you understand and know all of the facts about security deposits, it's much easier to deal with tenants and rent your property. Understanding this aspect of renting is a key part of ensuring landlord and tenant satisfaction in the long run.
PMI Amazing Spaces is dedicated to finding the best possible tenants for your Charlotte, North Carolina rental properties. When you're ready to find out more and make your life as a landlord easier, contact us today.
