As a landlord in Charlotte, you cannot charge your tenants more than the equivalent of two months’ rent when you’re collecting a security deposit. If you’re renting out a home on a month to month basis, that limit drops to the rental equivalent of one-and-a-half months.
Even though you are holding the deposit throughout the length of the tenancy, that money belongs to your tenant. You cannot use it until the tenant has moved out and you’re deciding whether or not to keep part (or all) of that deposit to pay for damages, cleaning, and other allowable expenses.
It’s easy to make a mistake when it comes to security deposits, and this is an area that can often lead to disputes and conflict between landlords and tenants. Make sure you’re documenting everything, and be flexible when necessary. You don’t want your tenants taking you to court over a $100 charge. It’s not worth your time or resources.
Here’s what you need to know about handling security deposit returns in Charlotte.
Inspecting Your Charlotte Rental Property
To decide how much money, if any, will be withheld from the deposit, you’ll need to do a final inspection of the property after your tenants have moved out to assess the condition of your rental home. Ideally, you will have conducted a thorough inspection before the tenant moved in so you have a good condition report to use as a baseline during the final inspection.
Take detailed notes and if there’s damage, make sure you take photographs so you’ll be able to back up your claims if a tenant decides to contest what you’ve found or dispute the amount of deposit that’s returned.
Reasons to Deduct from or Keep a North Carolina Security Deposit
North Carolina law provides rental property owners with some guidelines for what can be deducted and what cannot be deducted. Here are some of the reasons you might keep some or all of your tenant’s security deposit after they move out:
- Unpaid rent
- Unpaid utility bills
- Damage that exceeds normal wear and tear
These are the three main reasons you’ll have a lawful reason to keep the security deposit. If your tenant has broken the lease and is moving out before the end of the lease term, you can also keep the deposit in order to cover the rent they’re responsible for while you’re finding a new tenant.
If you evict a tenant, you can keep the deposit to pay for any overdue rent and also any costs incurred to remove and store the tenant’s personal property after the eviction is complete. Security deposits can also be used to cover court costs during an eviction.
Timelines for Security Deposit Returns
Generally, North Carolina law allows 30 days after a tenant moves out for property owners to return the security deposit. If you’re making deductions and you cannot accurately determine what the final amount will be within 30 days, you can return the balance of the deposit and an itemized statement within 60 days. However, you’ll still have to provide an estimate of the charges within the 30 day window.
If you’re struggling to understand the proper use and return of security deposits, contact us at AM Realty. We can answer all your Charlotte property management questions and protect you from any risk that can come with a legal mistake.
