Published 2026-09-27 · 11 min read

North Dakota Security Deposit Law 2026: Limits, Deadlines & Deductions

North Dakota puts its whole deposit regime in one section: NDCC § 47-16-07.1. Subsection 1 requires the money to sit in a federally insured interest-bearing savings or checking account for the benefit of the tenant and caps security at one month's rent, with two narrow exceptions. Subsection 3 limits what the deposit can be applied to, requires any portion applied to be itemized, and requires the itemization, the amount due, and a written notice delivered or mailed within 30 days after termination and delivery of possession. Subsection 4 is one sentence long and expensive: a lessor is liable for treble damages for any deposit money withheld without reasonable justification. The signed condition statement is not in this section at all — it is the separate § 47-16-07.2.

The short version: Take no more than one month's rent as security, however labeled (§ 47-16-07.1(1)). The only routes to two months are accepting it from a person convicted of a felony offense as an incentive to rent, or demanding it from a person with a judgment against them for violating a previous rental agreement. A pet security deposit is separate, capped at the greater of $2,500 or two months' rent, and barred for service or companion animals required as a disability accommodation (§ 47-16-07.1(2)). Hold everything in the interest-bearing account, get the § 47-16-07.2 statement signed at move-in, and deliver or mail the itemization and notice within 30 days after termination and delivery of possession, to the last address furnished. Interest is excused only when occupancy was under nine months (§ 47-16-07.1(3)).

What the earlier version of this page got wrong: (1) Its subsection map was invented — it spread the rules across subsections (1) through (7), but § 47-16-07.1 has six: account and cap in (1), pet deposit in (2), application, itemization, interest threshold, and unclaimed amounts all in (3), treble damages in (4), transfer in (5), scope in (6). (2) It credited the move-in inventory to "§ 47-16-07.1(7)," due before collecting a deposit; the condition statement is § 47-16-07.2, provided at the time of entering a rental agreement, signed by both parties, and prima facie proof of condition. (3) It said you may demand two months from a tenant with a felony conviction; subsection 1(a) says the lessor may accept up to two months from a person convicted of a felony as an incentive to rent — only subsection 1(b) uses "demand." (4) It ran the 30-day clock from when "the tenant vacates and the lease expires"; subsection 3 runs it from termination of the lease and delivery of possession by the lessee, requires mailing to the last address furnished (not the "last known address"), and requires the notice to state any amount still due the lessor or the refund due the lessee. (5) It stated the interest rule as a standalone subsection (4) keyed to "lease terms of 9 months or more"; the rule sits in subsection 3 and turns on the period of occupancy being under nine months. (6) It priced the penalty as "up to three times the amount wrongfully withheld plus court costs," said treble damages "must be requested in the court papers," and said the landlord bears the burden of justification — subsection 4 contains none of that. (7) It said unclaimed deposits are "turned over to the state" after a year; subsection 3 makes amounts unclaimed within one year subject to the reporting requirements of § 47-30.2-04. (8) It omitted subsection 5's holder-at-termination rule, subsection 6, and subsection 1's "however denominated" language, and asserted a carpet-depreciation rule found nowhere in the statute.

North Dakota's 30-day clock and treble-damages exposure make the paperwork the whole game — a signed § 47-16-07.2 statement plus a dated itemization is what "reasonable justification" looks like. The Security Deposit Disposition & Deadline Tracker ($14.95) keeps your deadlines, deductions, and inspection records in one spreadsheet so the clock never sneaks up on you.

The statute table

Limits: how much can you charge?

Subsection 1 draws the ceiling in terms of security, however denominated — relabeling deposit money as a fee does not move it outside the cap. The standard ceiling is one month's rent.

The two exceptions are not interchangeable, and the verbs matter:

• Felony conviction — accept, as an incentive (§ 47-16-07.1(1)(a)). A lessor may accept up to two months' rent from an individual convicted of a felony offense, as an incentive to rent the property to the individual. The subsection does not say the lessor may demand it, the way the next exception does.
• Prior rental judgment — demand (§ 47-16-07.1(1)(b)). A lessor may demand up to two months' rent from an individual who has had a judgment entered against that individual for violating the terms of a previous rental agreement — not any eviction filing, court record, or bad reference.

Pets sit on their own track. Under subsection 2, a pet security deposit may be charged for keeping an animal, capped at the greater of $2,500 or two months' rent — at $1,200 rent, two months is $2,400, so the cap is $2,500; at $1,500 rent, two months is $3,000, so the cap is $3,000. It may not be charged for a service animal or a companion animal required as a disability accommodation under fair housing laws. Ledger it separately, under the same account rule. Check your figures with the Security Deposit Max Checker.

The 30-day deadline, precisely

Subsection 3 controls the ending. Any portion of the deposit you apply rather than pay back must be itemized. The itemization, together with the amount due, must be delivered or mailed to the lessee at the last address furnished to the lessor, along with a written notice, within 30 days after termination of the lease and delivery of possession by the lessee. The notice must state any amount still due the lessor or the refund due the lessee. Diary the date with the Security Deposit Deadline Finder.

When the clocks actually start

• Itemization and notice (§ 47-16-07.1(3)): 30 days after termination of the lease and delivery of possession by the lessee. Both must have occurred — a terminated lease with the tenant still in possession has not started this clock.
• Interest threshold (§ 47-16-07.1(3)): measured by the period of occupancy, not the paper term. Less than nine months excuses interest; nine months or more does not.
• Condition statement (§ 47-16-07.2): provided at the time of entering a rental agreement (move-in).
• Unclaimed amounts (§ 47-16-07.1(3)): one year from termination of the lease agreement; amounts still unclaimed become subject to the reporting requirements of § 47-30.2-04.

A worked example

Rent is $1,200 a month; you hold a $1,200 deposit, exactly at the cap, in the required account. The lease terminates and the tenant delivers possession on Monday, March 2, 2026. Occupancy ran twelve months, so interest is owed.

• Itemization, amount due, and written notice due within 30 days: Wednesday, April 1, 2026.
• Lawful deductions total $450 (unpaid rent and documented subsection 3 cleaning and repair costs). Balance: $1,200 − $450 = $750, plus accrued interest.
• Deliver or mail all three pieces by April 1, 2026 and subsection 3 is satisfied. Keep the $750 without reasonable justification instead, and subsection 4 prices it: treble damages of $2,250, and the $750 itself is still owed.

Deductions and the itemized list

Subsection 3 permits applying deposit money and accrued interest toward three categories only:

1. Damage from the pet, or from negligence (§ 47-16-07.1(3)(a)). Damages from deteriorations or injuries to the property by the lessee's pet or through the negligence of the lessee or the lessee's guest. Damage with no pet and no negligence behind it is outside this paragraph — the category is causation-based, not a general damage bucket.

2. Unpaid rent (§ 47-16-07.1(3)(b)). Any unpaid rent.

3. Cleaning and repair costs (§ 47-16-07.1(3)(c)). Costs of cleaning or other repairs that were the responsibility of the lessee and are necessary to return the unit to its original state when the lessee took possession, reasonable wear and tear excepted. The measure is the move-in state — what the signed § 47-16-07.2 statement proves.

Everything you apply must appear in the itemization; an unitemized application is not completed by being substantively fair. The statute states no depreciation schedule for carpet or paint — subsection 3(c)'s tests are responsibility, necessity, original state, and the wear-and-tear exception — so keep invoices, dated photos, and the signed statement behind every line. Build the letter with the Security Deposit Deduction Letter Generator.

Move-out compliance checklist

1. At collection, total all security, however denominated, against the one-month cap — reach two months only through subsection 1(a) (accept, felony, as an incentive) or 1(b) (demand, prior judgment). Ledger any subsection 2 pet deposit separately.

2. Get the § 47-16-07.2 condition statement signed at move-in — describing the condition of the premises, signed by you and the tenant. It is prima facie proof of move-in condition.

3. Put the money in the subsection 1 account — a federally insured, interest-bearing savings or checking account, for the tenant's benefit — and keep it identifiable through termination.

4. Log both end dates the day they happen — termination and delivery of possession. The subsection 3 clock needs both; diary day 30 from the later one.

5. Inspect at once and sort every charge into subsection 3(a), (b), or (c) — striking reasonable wear and tear first, and any charge that was not the lessee's responsibility.

6. Itemize, state, and send by day 30: the itemization, the amount due, and the written notice stating any amount still due you or the refund due the tenant, delivered or mailed to the last address the tenant furnished, with any interest owed (§ 47-16-07.1(3)). Keep proof of mailing.

7. If ownership transfers, complete subsection 5: transfer the deposit and accrued interest to the grantee — you are not relieved until you do — and remember the holder at termination is bound even if they never collected it.

Interest and where the money sits

Subsection 1 leaves no choice about the account: the deposit shall be deposited in a federally insured interest-bearing savings or checking account for the benefit of the tenant. There is no bond or trust-account alternative here, and no separate bank-name notice duty — the duties are the account itself and payment of the deposit and any interest accruing on it on termination, subject to the application rules.

Interest turns on one sentence in subsection 3: no interest need be paid if the period of occupancy was less than nine months. Nine months or longer: the excuse disappears, and the interest that actually accrued is paid or applied under subsection 3. Estimate what is owed with the Security Deposit Interest Calculator.

On transfer, subsection 5 governs: upon a transfer in ownership, the deposit and accrued interest shall be transferred to the grantee. The grantor is not relieved of liability until that transfer happens — handing over keys and files without the money completes nothing. The duty follows the property: the holder at termination is bound even though that holder was not the original lessor — a buyer steps into the 30-day duty and treble exposure on money they never collected.

Amounts never claimed are not a windfall: amounts not claimed within one year of termination are subject to the reporting requirements of § 47-30.2-04 (subsection 3).

The penalty, spelled out

Subsection 4 is the whole penalty scheme, in one sentence: a lessor is liable for treble damages for any security deposit money withheld without reasonable justification. Price it carefully — summaries routinely add parts the sentence does not contain:

• Treble means three times, with no "up to" (§ 47-16-07.1(4)). On the worked example, withholding the $750 balance without reasonable justification creates $2,250 in treble damages — and the $750 itself remains owed, a $3,000 cash consequence for keeping $750.
• The trigger is justification, not the calendar alone (§ 47-16-07.1(4)). Liability attaches to money withheld without reasonable justification. A documented subsection 3 deduction, itemized and noticed on time, is the justification case; an unitemized or wear-and-tear withholding is the exposure case. The signed § 47-16-07.2 statement, invoices, and the dated itemization separate the two.
• What subsection 4 does not say. It awards no court costs and no attorney's fees, states no burden-of-proof rule, and imposes no requirement that treble damages be requested in any particular paper.

The multiplier applies to small sums too: withhold $300 of undocumented cleaning charges and the treble figure is $900, plus the $300.

FAQ

How much deposit can I charge — and can I demand two months from an applicant with a felony conviction?

One month's rent as security, however denominated (NDCC § 47-16-07.1(1)). Subsection 1(a) says the lessor may accept up to two months from a person convicted of a felony offense as an incentive to rent — it does not use the word demand. Demand appears only in subsection 1(b), for a person with a judgment against them for violating a previous rental agreement.

How much is the pet deposit, and when can I charge it?

Up to the greater of $2,500 or two months' rent, for an animal that is not a service animal or a companion animal required as a disability accommodation (NDCC § 47-16-07.1(2)). No pet deposit for a protected animal.

When does the 30-day return clock actually start?

On the pair in NDCC § 47-16-07.1(3): termination of the lease and delivery of possession by the lessee. Itemization, amount due, and written notice — stating any amount still due or the refund due — must be delivered or mailed within 30 days after both, to the last address the lessee furnished.

Do I owe interest on the deposit?

Interest is excused only if occupancy was less than nine months (NDCC § 47-16-07.1(3)). At nine months or more, the deposit must have sat in a federally insured interest-bearing account (subsection 1), and the accrued interest is accounted for with the deposit. No statutory rate applies.

Is the move-in condition statement really required, and what does it do?

Yes — under the separate NDCC § 47-16-07.2, the landlord provides a statement describing the condition of the facilities and premises at the time of entering a rental agreement, signed by both parties. It is prima facie proof of move-in condition, the baseline subsection 3(c) deductions are measured against.

What happens if I withhold part of the deposit without a good reason?

Under NDCC § 47-16-07.1(4), the lessor is liable for treble damages for money withheld without reasonable justification — three times the amount withheld, with no "up to" in the text, and the withheld money itself still owed.

I bought a building with tenants in place. Am I responsible for deposits I never collected?

Yes. On transfer, the deposit and accrued interest must be transferred to you as grantee, the seller is not relieved until that happens, and the holder at termination is bound even if not the original lessor (subsection 5).

The tenant never claimed the refund. Can I keep it after a year?

No — amounts not claimed within one year of termination are subject to the reporting requirements of NDCC § 47-30.2-04 (NDCC § 47-16-07.1(3)).

Read the statute yourself

Primary sources:

• Chapter 47-16 — Leasing of Real Property (North Dakota Legislative Branch, official PDF) — official full text of NDCC Chapter 47-16, including § 47-16-07.1 (subsections 1–6) and § 47-16-07.2. Verified live October 15, 2026.
• Chapter 47-16 contents (North Dakota Legislative Branch) — official chapter page linking every section to the official text.
• Title 47 — Property (North Dakota Legislative Branch) — official Title 47 index.
• Chapter 47-16 (Justia) — the full chapter in Justia's North Dakota Century Code, for cross-checking subsection numbering. Justia's per-section page for § 47-16-07.1 did not resolve on October 15, 2026; the chapter page is linked instead.

The deposit is only one piece of North Dakota compliance. Our full North Dakota landlord-tenant law guide covers the rest of the relationship — rent and fees, termination notices under NDCC 47-16-15, habitability and repairs, entry, eviction under NDCC 47-32, and abandoned property.

More security deposit guides

• Security deposit laws by state
• North Carolina security deposit law
• Ohio security deposit law
• New York security deposit law
• Oklahoma security deposit law

Last verified: October 15, 2026. This is general information, not legal advice. Verify with a licensed North Dakota attorney before acting.