N.C. Gen. Stat. § § 42-51
Permitted uses of the deposit.
Operative Text
(a) Security deposits for residential dwelling units shall be permitted only for the following: (1) The tenant's possible nonpayment of rent and costs for water or sewer services provided pursuant to G.S. 62-110(g) and electric service pursuant to G.S. 62-110(h). (2) Damage to the premises, including damage to or destruction of smoke alarms or carbon monoxide alarms. (3) Damages as the result of the nonfulfillment of the rental period, except where the tenant terminated the rental agreement under G.S. 42-45, G.S. 42-45.1, or because the tenant was forced to leave the property because of the landlord's violation of Article 2A of Chapter 42 of the General Statutes or was constructively evicted by the landlord's violation of G.S. 42-42(a). (4) Any unpaid bills that become a lien against the demised property due to the tenant's occupancy. (5) The costs of re-renting the premises after breach by the tenant, including any reasonable fees or commissions paid by the landlord to a licensed real estate broker to re-rent the premises. (6) The costs of removal and storage of the tenant's property after a summary ejectment proceeding. (7) Court costs. (8) Any fee permitted by G.S. 42-46. (b) The security deposit shall not exceed an amount equal to two weeks' rent if a tenancy is week to week, one and one-half months' rent if a tenancy is month to month, and two months' rent for terms greater than month to month. These deposits must be fully accounted for by the landlord as set forth in G.S. 42-52. (1977, c. 914, s. 1; 1983, c. 672, s. 3; 2001-502, s. 5; 2004-143, s. 6; 2011-252, s. 3; 2012-17, s. 4; 2012-194, s. 59(a), (b).)
North Carolina General Statute § 42-51 defines the exclusive list of purposes for which a landlord may use a residential security deposit. Permitted uses include unpaid rent, utility bills that become liens, physical damage to the unit (including smoke and carbon monoxide alarms), costs from re-renting after a tenant's breach, removal and storage costs following an eviction proceeding, court costs, and certain statutory fees. The statute also caps the deposit amount itself: no more than two weeks' rent for week-to-week tenancies, one and a half months' rent for month-to-month tenancies, and two months' rent for longer-term leases.
Plain English — not legal advice.
Under N.C. Gen. Stat. § 42-51, compliant landlords collect security deposits only up to the statutory caps and apply deposit funds solely to the eight enumerated categories listed in the provision. Operators generally document all deductions carefully—such as re-renting costs, unpaid utility liens, or physical damage—so that any withholding can be traced directly to a permitted use. Landlords should also be aware that deductions for damages resulting from a tenant's early departure may not be permitted when the tenant terminated under specific statutory protections, such as those found in G.S. 42-45 or G.S. 42-45.1.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
N.C. Gen. Stat. § 42-51 limits the reasons a landlord may keep any portion of a security deposit, meaning deductions for purposes not on the statute's list are generally not authorized. Tenants who believe a deduction falls outside these permitted categories—or that the deposit collected exceeded the applicable cap—may have grounds to raise that issue as a defense in court or by consulting a tenant-rights organization familiar with North Carolina law. Tenants who terminated their lease under qualifying circumstances, such as those covered by G.S. 42-45 or G.S. 42-45.1, or who left due to a landlord's habitability violations, may have additional protections against deposit deductions for the unfulfilled rental period.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 14, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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