North Dakota Residential Security Deposit Laws

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in North Dakota for advice specific to your situation. Information last verified: March 2026.

North Dakota’s security deposit statutes (outlined in NDCC Chapter 47-16) are uniquely detailed. While the state aims to protect tenants from excessive upfront costs, it provides landlords with highly specific, tiered exceptions to manage high-risk renters and pets.

1. Statutory Deposit Limits

North Dakota imposes a strict ceiling on security deposits, but with crucial exemptions.

• The Standard Limit: For the vast majority of applicants, a landlord cannot demand a security deposit exceeding one month's rent.
• The "High-Risk" Exception: If a prospective tenant has a felony conviction or a prior court judgment against them for violating a previous rental agreement, the landlord is legally permitted to double the protection and demand a deposit equal to two months' rent.
• The Pet Deposit Limit: Landlords who allow pets can charge a separate pet deposit safely. By law, the pet deposit cannot exceed $2,500 or two months' rent, whichever is greater. (Note: This does not apply to legally recognized service or emotional support animals, which are exempt from pet deposits under federal law).

2. Mandatory Interest Payments

North Dakota is one of the few states that rigidly forces landlords to pay tenants interest on their deposits.

• 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 their personal operating capital.
• The 9-Month Rule: If the tenant occupies the property for at least nine months, the landlord is legally obligated to immediately begin paying interest on the deposit.
• The Rate: The landlord must pass along the interest earned on the account to the tenant, minus any minor administrative fees allowed by the bank.

3. The 30-Day Return Deadline

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

• Itemized Deductions: If the landlord retains any portion of the deposit, they must provide the tenant with a written, itemized list detailing exactly what was withheld.
• Permitted Deductions: Landlords can legally withhold funds to cover unpaid rent, unpaid utility bills that were the tenant's responsibility under the lease, and physical damages to the property that exceed "normal wear and tear" (e.g., large stains on carpets, broken doors). Landlords cannot deduct for routine turnover costs like standard carpet steam-cleaning if the unit was left reasonably clean.

The Penalty for Non-Compliance

If a landlord fails to return the deposit or the itemized deduction letter within the 30-day window, or if they act in "bad faith" (e.g., fabricating damages), the tenant can sue the landlord in small claims court. The judge can award the tenant up to double the amount of the wrongfully withheld deposit, plus court costs.

How Landager Helps North Dakota Landlords

Manually tracking which of your 50 tenants have crossed the 9-month threshold and are now legally owed Federal Reserve interest on their security deposit is virtually impossible without enterprise software. Landager automates North Dakota escrow compliance. When processing a new applicant, our background screening integration checks for prior eviction judgments; if flagged, the leasing flow automatically unlocks the legal option to demand the two-month NDCC deposit maximum. Once active, Landager’s accounting module tracks the exact move-in date, automatically calculating and applying the required interest to the tenant’s deposit ledger the moment their tenancy hits day 271, ensuring your 30-day move-out statements are mathematically flawless.

Back to North Dakota Residential Landlord-Tenant Laws Overview.