NC General Statutes

N.C. Gen. Stat. § 42-51 (2026)

Permitted uses of the deposit

✓ current as of July 2026

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(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).)

Notes of Decisions

Cited in 3 cases, 1984–2020 · leading case: M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 536 N.W.2d 175 (Wis. Ct. App. 1995).

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M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 536 N.W.2d 175 (Wis. Ct. App. 1995). “602 (one and one-half months' rent); N.C. Gen. Stat. § 42-51 (two weeks' rent for week-to-week tenancy, one and one-half months' rent for month-to-month tenancy, two months' rent for tenancies greater than month to month).”

Jones v. City Plaza, LLC (M.D.N.C. 2020). · cites it 10× “violated the North Carolina Tenant Security Deposit Act, specifically N.C. Gen. Stat. § 42-51 and § 42-52, and the North Carolina Debt Collection Practices Act, specifically N.”

Dobbins v. Paul, 321 S.E.2d 537 (N.C. Ct. App. 1984). · cites it 2× “See G.S. § 42-51 (purposes of deposit). The trial court’s suggestion that the Deposit Act did not apply due to failure of notice within 30 days after the beginning of the lease term relates to the landlord’s obligation to notify the tenant of the location of trust accounts or…”

— N.C. Gen. Stat. § 42-51(a) — 1 case

Jones v. City Plaza, LLC (M.D.N.C. 2020). “violated the North Carolina Tenant Security Deposit Act, specifically N.C. Gen. Stat. § 42-51 and § 42-52, and the North Carolina Debt Collection Practices Act, specifically N.”

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