Overview
Security deposits in New Hampshire are regulated to protect both tenants and landlords by establishing clear expectations for their collection, handling, and return. These laws aim to ensure transparency and prevent disputes at the end of a lease.
Under New Hampshire Revised Statutes Chapter 540-A, landlords must adhere to strict rules when dealing with security deposits. Non-compliance can result in financial penalties and legal action.
This guide covers:
How much landlords can charge
Where deposits must be stored
Rules for returning security deposits
Penalties for non-compliance
Related Statute: NH Rev. Stat. § 540-A:5 – A:8
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords may not charge more than one month’s rent as a security deposit unless the monthly rent exceeds $1,000, in which case a higher deposit may be permitted.
Storage requirements: Security deposits must be held in a separate, interest-bearing escrow account in a New Hampshire financial institution.
Tenant notification: Within 30 days of receiving the deposit, landlords must provide written notice stating the name and address of the bank holding the deposit.
Law Reference: NH Rev. Stat. § 540-A:6
2. Security Deposit Returns & Allowable Deductions
Return deadline: Landlords must return the security deposit within 30 days of the end of the tenancy. If there are damages, landlords have 20 additional days to provide an itemized statement of deductions.
Permissible deductions: Landlords may withhold funds for unpaid rent or damages beyond normal wear and tear.
What landlords cannot deduct: Landlords may not deduct for ordinary wear and tear, such as faded paint or worn carpets.
Itemized statement required: If any part of the deposit is withheld, the landlord must provide a detailed, written itemization of damages and associated costs.
Law Reference: NH Rev. Stat. § 540-A:7
3. Interest Payments & Documentation Requirements
Interest payments: Landlords must pay tenants interest on security deposits after the funds have been held for one year. The rate is based on what the bank pays or 1 percent annually, whichever is lower.
Move-in condition report: While not mandatory, it is recommended that landlords and tenants document the unit’s condition at move-in to reduce disputes over deductions.
Tenant review period: Tenants are encouraged to inspect the premises and report any discrepancies promptly after moving in.
Failure to provide documentation: If landlords fail to return the deposit or issue a proper itemized statement, they may lose the right to retain any part of the deposit and may owe damages.
Law Reference: NH Rev. Stat. § 540-A:6 – A:8
4. Penalties for Mishandling Security Deposits
New Hampshire enforces penalties for landlords who violate security deposit laws.
Failure to return the deposit within the legal timeframe may result in the landlord being liable for double the amount wrongfully withheld.
Failure to provide an itemized statement or to pay required interest can also lead to financial penalties and legal action.
Law Reference: NH Rev. Stat. § 540-A:8
Key Takeaways
Landlords may not charge more than one month’s rent as a deposit, with limited exceptions for high-rent properties.
Deposits must be kept in a separate, interest-bearing account at a New Hampshire bank.
Deposits must be returned within 30 days, with a detailed itemized list of any deductions provided within an additional 20 days if needed.
Landlords must pay annual interest on deposits held for more than one year.
Non-compliance can lead to double damages owed to tenants.
By understanding and following New Hampshire security deposit laws, landlords can avoid costly mistakes and legal action, while tenants can protect their financial interests.
Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Readers should not act or refrain from acting based on any information included in this post without seeking legal counsel or other professional guidance specific to their situation. The information is provided “as is” without any representations or warranties of any kind, express or implied, including but not limited to the accuracy, completeness, or reliability of the content. Laws and regulations may change and vary by jurisdiction.
