Overview
North Dakota’s security deposit laws are designed to ensure that landlords handle tenant funds responsibly and return them fairly. These laws outline specific rules regarding deposit limits, handling, and return procedures.
Under North Dakota Century Code § 47-16-07.1, landlords must comply with deposit rules outlined in the residential landlord and tenant statutes. Violations may result in loss of the right to retain any part of the deposit and potential damages.
This guide covers:
How much landlords can charge
Where deposits must be stored
Rules for returning security deposits
Penalties for non-compliance
Related Statute: N.D. Cent. Code § 47-16-07.1
1. Security Deposit Limits & Storage Requirements
Maximum deposit: Landlords may not charge more than one month’s rent as a security deposit. If the tenant has a pet (excluding service animals), an additional pet deposit of up to $2,500 or two months’ rent, whichever is greater, may be charged.
Storage requirements: While landlords must safeguard the deposit, there is no specific requirement to place the funds in a separate or interest-bearing account.
Tenant notification: North Dakota law does not require landlords to notify tenants of the deposit account’s details.
Law Reference: N.D. Cent. Code § 47-16-07.1(1)
2. Security Deposit Returns & Allowable Deductions
Return deadline: Security deposits must be returned within 30 days after the end of the tenancy and delivery of the tenant’s forwarding address.
Permissible deductions: Landlords may deduct for unpaid rent, damage beyond normal wear and tear, and other breaches of the lease.
What landlords cannot deduct: Normal wear and tear cannot be charged against the security deposit.
Itemized statement required: An itemized list of any deductions must be provided along with the remaining balance of the deposit.
Law Reference: N.D. Cent. Code § 47-16-07.1(2)
3. Interest Payments & Documentation Requirements
Interest payments: If a security deposit is held for more than nine months, landlords must pay simple interest at a rate equal to the Federal Reserve’s discount rate as of January 1 of each year.
Move-in condition report: A move-in inspection is not explicitly required, but documenting the property’s condition at the beginning and end of tenancy is recommended.
Tenant review period: Tenants are encouraged to document and retain records of the unit’s condition to support deposit disputes.
Failure to provide documentation: If a landlord fails to return the deposit and a list of deductions within the required timeframe, they may forfeit the right to retain any part of it.
Law Reference: N.D. Cent. Code § 47-16-07.1(3)
4. Penalties for Mishandling Security Deposits
North Dakota law imposes consequences for failing to follow deposit return procedures.
Failure to return the deposit within 30 days may result in the landlord forfeiting any right to retain funds and becoming liable for damages in court.
Failure to pay interest when required may also subject the landlord to financial penalties.
Law Reference: N.D. Cent. Code § 47-16-07.1
Key Takeaways
Security deposits may not exceed one month’s rent, with additional pet deposits allowed.
Deposits must be returned within 30 days, with an itemized statement of any deductions.
Interest must be paid on deposits held longer than nine months.
Only specific deductions are permitted, and normal wear and tear cannot be charged.
Non-compliance may result in full forfeiture of the deposit and potential legal liability.
By understanding and following North Dakota security deposit laws, landlords can remain compliant, and tenants can ensure they recover what they’re owed.
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.
