Permitted Uses of Security Deposits

Permitted Uses of Security Deposits

Unlocking the Mystery of Tenant Security Deposits: Your Rights and Responsibilities

Curious about how to navigate tenant security deposits? Eager to understand your tenant rights? Look no further – we're here to provide clarity.

Dispelling a Common Myth

Contrary to popular belief, the security deposit paid by tenants upon moving into a rental property doesn't automatically belong to the owner. In reality, this deposit is the tenant's rightful possession, held in trust until their tenancy concludes. As per the Tenant Security Deposit Act outlined in the North Carolina General Statutes (NC GS 42-51), landlords are permitted to utilize the security deposit in only seven designated scenarios:

  1. Nonpayment of rent that's overdue.

  2. Damage to the property beyond "ordinary wear and tear."

  3. Non-completion of the rental period (pertaining to future rent).

  4. Unsettled bills from the tenant's occupancy, creating a property lien.

  5. Expenses for re-renting the premises post-lease breach.

  6. Costs related to removing and storing the tenant's belongings.

  7. Court expenses and legal fees linked to tenancy termination.

  8. Demystifying "Ordinary Wear and Tear"

Disputes often revolve around the second point – damage surpassing normal wear and tear. Deciphering this line is complex, as it hinges on individual cases. The North Carolina Department of Justice and The North Carolina Real Estate Commission offer guidelines for clarity. Examples include:

Normal Wear and Tear:

  • Worn or soiled carpets

  • Faded paint

  • Dirty windows and walls

  • Minor curtain or blind damage

  • Leaky faucets or toilets

  • Small wall holes from picture hanging

  • Worn lavatory basins

  • Burnt-out range heating elements

Beyond Normal Wear and Tear:

  • Wall marks from markers

  • Large wall holes

  • Broken windows

  • Ruined carpets

  • Unauthorized paint colors

  • Damaged countertops

  • Excessively filthy appliances requiring special cleaning

  • Property demanding extraordinary cleaning

A Strategic Approach to Tenant Security Deposits

Landlords and property managers mustn't utilize security deposits to address "normal wear and tear." These expenses are inherent to the landlord's business. Deductions, however, can be made for repairing damage beyond normal wear and tear that transpired during the tenancy. Minimize disputes by employing move-in checklists, inspections, and 'before' pictures to document the property's condition at the tenant's occupancy – practices at the core of Flagship Realty Group's operations.

Knowledge Is Power

For comprehensive insights into the Tenant Security Deposit Act and Landlord and Tenant Law, consult the North Carolina Real Estate Commission's resources. Visit for a repository of frequently asked questions and answers concerning tenant security deposits. Delve into for broader queries regarding renting residential real estate.

At Flagship Realty Group, we're dedicated to demystifying property management complexities for our clients in Greenville, New Bern, and Eastern North Carolina. Ensuring you grasp your tenant rights and responsibilities is our commitment. Contact us today to explore the seamless world of property management with Flagship Realty Group.