Security Deposit Law
What North Dakota landlords must do with security deposits — the cap, interest, return deadline, account rules, and penalties — with citations to the statute itself.
Verified as of June 11, 2026
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Deposit cap
One month's rent, with two narrow exceptions allowing up to two months, plus a separate pet-deposit cap of $2,500 or two months' rent (whichever is greater).
Interest
Deposits must sit in a federally insured interest-bearing account; the interest goes to the tenant unless the occupancy lasted under nine months.
Return deadline
30 days to deliver or mail the refund, with an itemized list of anything withheld.
A lessor 'may not demand or receive security, however denominated, in an amount or value in excess of one month's rent,' except: up to two months' rent may be accepted as an incentive from 'an individual convicted of a felony offense,' or demanded from an individual with a judgment against them 'for violating the terms of a previous rental agreement' (§ 47-16-07.1(1)). A separate pet security deposit is allowed for non-service/companion animals and 'may not exceed the greater of two thousand five hundred dollars or an amount equivalent to two months' rent' (§ 47-16-07.1(2)).
The lessor 'shall deposit the money in a federally insured interest-bearing savings or checking account for the benefit of the tenant,' and 'the security deposit and any interest accruing on the deposit must be paid to the lessee upon termination of a lease' (§ 47-16-07.1(1)). However, 'a lessor is not required to pay interest on security deposits if the period of occupancy was less than nine months in duration' (§ 47-16-07.1(4)).
Any portion of the deposit not returned 'must be itemized by the lessor,' and the 'itemization together with the amount due must be delivered or mailed to the lessee at the last address furnished lessor, along with a written notice within thirty 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 (§ 47-16-07.1(4)).
The deposit must be placed 'in a federally insured interest-bearing savings or checking account for the benefit of the tenant' (§ 47-16-07.1(1)) — an operating account or non-interest-bearing account does not satisfy the statute. On a sale of the property, the deposit and accrued interest must be transferred to the new owner (§ 47-16-07.1(6)).
'A lessor is liable for treble damages for any security deposit money withheld without reasonable justification' (§ 47-16-07.1(5)). The statute does not define 'reasonable justification,' so document deductions carefully against the three permitted categories in subsection 3 (pet/negligence damage, unpaid rent, and tenant-responsibility cleaning or repairs).
None identified. No municipal security-deposit ordinance was found for Fargo, Bismarck, or Grand Forks; the Century Code provisions apply statewide and § 47-16-07.1(7) (final applicability subsection) extends the section to the state and its political subdivisions as lessors (negative claim — see couldNotConfirm).
Security may not exceed one month's rent unless the tenant was convicted of a felony (you may accept up to two months as a rental incentive) or has a judgment against them for violating a previous rental agreement (you may demand up to two months). § 47-16-07.1(1).
For an animal that is not a service or companion animal required as a disability accommodation, you may charge a separate pet security deposit up to the greater of $2,500 or two months' rent — on top of the regular deposit. § 47-16-07.1(2).
Holding the money in your operating account violates § 47-16-07.1(1). Accrued interest is paid to the tenant at lease end, except no interest is owed when the occupancy was under nine months (§ 47-16-07.1(4)).
Within 30 days after lease termination and the tenant's delivery of possession, deliver or mail the itemization, the amount due, and a written notice stating any balance owed either way, to the tenant's last furnished address. § 47-16-07.1(4).
At signing, the landlord must provide a statement describing the condition of the premises and facilities, signed by both parties; it is 'prima facie proof' of move-in condition — your best evidence when justifying deductions. § 47-16-07.2.
On transfer of ownership, the deposit plus accrued interest must be transferred to the buyer; the seller stays liable until the transfer happens, and the owner at lease end is bound by the statute even if they never received the original deposit. § 47-16-07.1(6).
Violates the express requirement to hold it 'in a federally insured interest-bearing savings or checking account for the benefit of the tenant' (§ 47-16-07.1(1)), and leaves you unable to pay over accrued interest owed at termination.
Money withheld without the required itemized accounting risks being 'withheld without reasonable justification,' triggering treble damages (§ 47-16-07.1(4), (5)).
The two-month security level is allowed only for a tenant convicted of a felony (as an incentive) or one with a prior judgment for violating a rental agreement; otherwise the one-month cap in § 47-16-07.1(1) applies and the excess is unlawfully demanded.
The pet-deposit authority in § 47-16-07.1(2) expressly excludes 'a service animal or companion animal required by a tenant with a disability as a reasonable accommodation under fair housing laws' — charging one invites fair-housing liability. You may, however, require reliable disability documentation in a no-pets building under § 47-16-07.5.
Amounts the tenant does not claim within one year of lease termination 'are subject to the reporting requirements of section 47-30.2-04' — North Dakota's unclaimed-property reporting statute — not yours to keep (§ 47-16-07.1(4)).
Generally one month's rent. You may go up to two months' rent only in two situations: as an incentive accepted from a tenant convicted of a felony, or demanded from a tenant who has a court judgment against them for violating a previous rental agreement. A separate pet deposit (for non-service animals) can be up to the greater of $2,500 or two months' rent. N.D. Cent. Code § 47-16-07.1(1)-(2).
In a federally insured interest-bearing savings or checking account held for the tenant's benefit — not your operating account. The deposit plus accrued interest is paid to the tenant when the lease ends. N.D. Cent. Code § 47-16-07.1(1).
30 days after the lease terminates and the tenant delivers possession. Anything you withhold must be itemized, and the itemization, amount due, and a written notice must be delivered or mailed to the tenant's last furnished address within that window. N.D. Cent. Code § 47-16-07.1(4).
Yes, if the tenancy lasted nine months or more — the deposit must sit in an interest-bearing account and the accrued interest is paid to the tenant at termination. If the occupancy was under nine months, the statute says you are not required to pay the interest over. N.D. Cent. Code § 47-16-07.1(1), (4).
Treble (triple) damages for any deposit money 'withheld without reasonable justification.' Lawful deductions are limited to damage caused by the tenant's pet or negligence, unpaid rent, and cleaning/repairs that were the tenant's responsibility (normal wear and tear excepted). N.D. Cent. Code § 47-16-07.1(3), (5).
You must transfer the deposit and its accrued interest to the buyer, and you remain liable until that transfer happens. The owner at the time the lease ends is bound by the deposit statute even if they never collected the original deposit. N.D. Cent. Code § 47-16-07.1(6).
This page is general information, not legal advice. Statutes change — verify with the cited sources or an attorney.
Statute facts on this page were verified against the cited official sources on June 11, 2026.
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