Governed by the North Dakota Century Code (effective since 1 July 1901), security deposit statutes (specifically NDCC § 47-16-07.1) are uniquely detailed. While the state aims to protect tenants from excessive upfront costs, it provides landlords with specific, tiered exceptions to manage high-risk renters and pets.

1. Statutory Deposit Limits

North Dakota imposes a strict ceiling on security deposits based on the tenant's history and the presence of pets.

• The Standard Limit: A landlord cannot demand a security deposit exceeding one month's rent.
• The High-Risk Exception: Landlords may charge up to two months' rent if the tenant has been convicted of a felony or has a prior judgment for violating a rental agreement.
• The Pet Deposit Limit: Landlords who allow pets can charge a separate pet deposit. By law, the pet deposit cannot exceed the greater of $2,500 or two months' rent. (Note: Service or emotional support animals are exempt from pet deposits under the Fair Housing Act).

2. Mandatory Interest Payments

North Dakota is one of the few states that requires landlords to pay tenants interest on their deposits for most tenancies.

• The Escrow Requirement: All tenant security deposits must be deposited in a federally insured, interest-bearing savings or checking account. The landlord cannot commingle these funds with personal operating capital.
• The 9-Month Rule: Interest payment is mandatory if the tenant occupies the property for at least nine months.
• The Rate: The landlord must pay the interest accrued on the account to the tenant upon lease termination.

3. The 30-Day Return Deadline

When a tenancy terminates and the tenant vacates, the landlord has exactly 30 days to return the security deposit and accrued interest.

• Itemized Deductions: If any portion is withheld, the landlord must provide a written, itemized list detailing the deductions.
• Permitted Deductions: Landlords can legally withhold funds to cover unpaid rent, physical damages exceeding "normal wear and tear," or cleaning costs required to restore the unit to its original condition.
• Notice of Address: The tenant must provide a forwarding address; however, the landlord's obligation to attempt return remains.

The Penalty for Non-Compliance

Failure to comply with NDCC § 47-16-07.1 carries significant penalties. If a landlord fails to return the deposit or the itemized statement within 30 days, or acts in "bad faith," they may be liable in a North Dakota District Court for:

1. Treble Damages: Up to three times the amount wrongfully withheld.
2. Attorney's Fees: Reasonable legal costs incurred by the tenant.

Official Law Citation: This information is derived directly from NDCC § 47-16-07.1. For the absolute legislative text, consult the North Dakota Legislative CouncilPreview unavailable.

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