Overview
North Dakota security deposit laws are governed by North Dakota Century Code Chapter 47-16. North Dakota caps deposits at one month's rent (with exceptions), requires interest for tenancies over nine months, and mandates written itemization of deductions. Passive's deposit management platform automates interest calculations and itemized statements.
Maximum Security Deposit
Under N.D.C.C. § 47-16-07.1, the maximum security deposit is generally one month's rent.
- Standard limit: One month's rent
- Exception: Landlords may charge higher deposits in cases of increased risk (such as pets or tenant history)
- Any amount above one month must be separately justified and documented
Pet Deposits
Pet deposits may be charged in addition to the standard security deposit if the pet poses a greater risk of damage. The amount should be reasonable and related to the potential risk. Service animals cannot be charged pet deposits.
Return Timeline
Landlords must return the security deposit within 30 days after the tenant surrenders the premises.
- Must include a written, itemized statement of any deductions
- The statement must describe each item being deducted and the cost
- The remaining balance must be mailed to the tenant's last known address
Interest Requirements
North Dakota has conditional interest requirements based on tenancy length: (South Dakota takes a similar approach—see South Dakota security deposit laws.)
- For tenancies lasting nine months or longer, landlords must pay interest on the security deposit
- Interest must be paid at an annual rate equal to the average 6-month CD rate (as set by the Bank of North Dakota)
- Interest must be paid when the deposit is returned
Storage Requirements
North Dakota does not specifically require deposits to be held in a separate account, but they must be available to return to the tenant at the end of the tenancy.
Allowable Deductions
Landlords may deduct from the security deposit for:
- Unpaid rent
- Damages beyond normal wear and tear
- Cleaning costs to restore the unit to its original condition
- Other costs specified in the lease agreement
Important: Normal wear and tear cannot be deducted. This includes minor scuffs, small nail holes, and gradual deterioration from ordinary use.
Penalties for Non-Compliance
If a landlord fails to return the security deposit or provide an itemized statement within 30 days:
- The tenant may recover the full amount of the deposit wrongfully withheld
- Plus actual damages
- The court may also award reasonable attorney's fees
Common Compliance Questions
What counts as "normal wear and tear"?
Normal wear and tear includes minor scuffs on walls, slightly worn carpet in high-traffic areas, small nail holes from hanging pictures, and faded paint from sunlight. It does not include large holes in walls, stained or burned carpet, broken fixtures, or damage from pets. When in doubt, document the condition at move-in with dated photos.
How should I document the unit's condition?
Complete a detailed move-in checklist with the tenant, noting existing damage, appliance conditions, and overall cleanliness. Take timestamped photos or video of every room. At move-out, repeat the process. This documentation protects both parties and makes deduction decisions defensible if disputed. Schedule a demo to see how Passive simplifies this process.
Can I deduct for unpaid utility bills?
Only if your lease specifically allows it and the utilities are in your name. If utilities are in the tenant's name, contact the utility company directly—they have their own collection processes. Never make unauthorized deductions, even for amounts you believe the tenant owes.