A Tenant’s Security Deposit
Understanding the Basics of a Security Deposit
Signing a rental lease is an exciting time, but it can also be overwhelming. From understanding the lease agreement to sorting out all of the additional fees, it can make your rental journey go from “Woohoo!” to “Ugghh.” rather quickly. When signing your lease, you can expect to pay a specific amount of money to your new landlord that includes your security deposit, pet fees, and other potential costs. So, what exactly is the security deposit, and what is it used for when it comes to your rental?
What is a security deposit?
Most residential leases and rental agreements in the state of North Carolina require a security deposit. A security deposit is a sum of money that a new tenant pays to a landlord before moving in and taking possession of the property. The money is proof that the individual intends to move into the property and will take care of the unit while living in the unit. Essentially, a security deposit serves as a point of “security” for the recipient (in this case, the landlord) and the funds can also be used to pay for damages or lost property.
Security Deposit Law
The state of North Carolina has specific limits and criteria for a tenant’s security deposit known as the North Carolina Tenant Security Deposit Act (Chapter 42 of the North Carolina General Statutes). The amount of the deposit is based on the monthly rental rate and the creditworthiness of the tenant. To help better understand what that means, here is a general description of how security deposits are decided.
- Week to week lease agreement: Two weeks’ rent
- Month to month lease- 1 ½ months rent for the security deposit
- Lease longer than 2 months- 2 months’ rent for the total security deposit
All security deposits are kept in a special escrow account, as required by North Carolina statutes, until they either are refunded to the tenant upon a successful check-out/move-out inspection or are forfeited to cover damage caused by lease violations.
Some landlords may charge an additional fee for owning a pet. The deposit can be either refundable or non-refundable, depending on the situation. It is important to state that landlords are within their right to have a “No Pets” policy, and it is completely legal to do so under North Carolina law.
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Want help with your rental property?
If you aren’t the kind of person who wants to deal with tenant issues, security deposits, and maintenance concerns that arise when renting a home, contact a property management service. At Oak City Properties, we work with you each step of the way when renting out your property. Our full management property service will market the property, locate prospective tenants, and show the home. Once a tenant is placed in your rental property, we will: collect rent payments, assess and collect late payment fees, provide 24/7 maintenance, help with accounting/tax services, and deal with any court appearances in the event of an eviction.
If you are interested in learning more, give us a call at (919)-232-9222 or check out our website: https://oakcityproperties.com
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