In February 2023, Raleigh saw a 3% increase in the average rental price. What does this mean for Raleigh landlords?
This means that you can expect more potential tenants to come your way. Whether you run a rental business or are an accidental landlord, opportunities in the city are expected to grow.
But before you start knocking on doors asking for rent, you've got to first familiarize yourself with security deposits.
Here's our guide to security deposits for landlords in Raleigh, North Carolina:
How Much Are Security Deposits?
North Carolina has specific security deposit laws regarding how much a landlord can change.
If a tenant is on a weekly lease, the security deposit can be a maximum of half of one month's rent. For example, let's presume you charge $200 per week for rent. The maximum security deposit would be $100.
If it's a monthly lease, the security deposit can be one-and-a-half times the rental cost. For a longer lease, the maximum amount for a security deposit can be equivalent to two months' rent.
You can also charge a pet deposit for all pets, excluding service animals. However, tenants are liable to pay for damages caused by service animals. For pet deposits, $200 is often considered the standard price.
Holding Security Deposits and Tenant Rights
In North Carolina, there are only two permitted options for holding a security deposit.
You can store it in a trust account. The trust account has to be licensed within the state. The other option is to post a bond that's the same amount as the security deposit.
Under no circumstances are you allowed to spend the security deposit before the lease agreement ends.
You must also provide a written receipt for the security deposit no later than 30 days after receiving it. The tenant must receive a written notice of the financial institution's name and address.
If you fail to do this, you're obliged to refund the security deposit. You can't begin the rental process again with this tenant afterward if you violate this rule.
Deducting Security Deposits
If evicting a tenant, you can keep the security deposit. If they fulfill their obligations, you'll have to refund the security deposit.
There are certain conditions where you can deduct part or the whole of a security deposit. This includes unpaid rent, unpaid bills, excessive damage, and violating the lease agreement.
You'll have to provide a written statement detailing each deduction. This should include the amount deducted and what each amount will pay for.
To avoid as much hassle as possible, consider hiring a property management company.
Get Ready to Rent
Now you know the rules for handling security deposits if you're a Raleigh, North Carolina landlord.
You have set limits on how much you can charge for a security deposit. You can only store a security deposit in a trust account or as a bond. Make sure you specify why you'll need to deduct any part of the security deposit.
Before renting out your property, be sure to hire a property manager. With 20 years of experience and several satisfied customers, PMI Triangle is your best bet!
