North Dakota Security Deposit Laws: The One-Month Cap, 30-Day Return, and Treble Damages

North Dakota security deposit law is set almost entirely by one statute — North Dakota Century Code section 47-16-07.1 — and it is stricter than many landlords expect. The deposit is capped at one month’s rent, it must be held in a federally insured interest-bearing account for the tenant, interest is owed once the tenancy reaches nine months, and the deposit plus an itemized statement must be returned within thirty days. Miss those rules and a court can award the tenant treble damages — three times the amount withheld. This guide walks the whole North Dakota framework end to end: how much you may collect, the two grounds that raise the cap to two months — a felony conviction or a judgment for violating a previous rental agreement — the separate pet deposit, the account and interest rules, the thirty-day return deadline, allowable deductions, and the treble-damages penalty for keeping a deposit without reasonable justification.

Whether you own one duplex in Fargo or a small portfolio across Bismarck and Grand Forks, the rules below apply the same way, because North Dakota Century Code section 47-16-07.1 governs statewide. North Dakota does not layer city rent-control or local deposit ordinances on top the way some states do, so the statute is the whole picture — which makes getting the statute right that much more important. Everything here is general information, not legal advice; confirm the current figures and consult a licensed North Dakota attorney before acting on a specific dispute.

Below, a short overview video summarizes the North Dakota deposit rules; the sections that follow break down each piece in detail — the cap and its exceptions, the interest-bearing account requirement, interest after nine months, deductions versus normal wear and tear, the thirty-day return timeline, the treble-damages penalty, the move-out walkthrough, and the small-claims path if a dispute cannot be resolved.

The single most important number in North Dakota deposit law is the cap. Under North Dakota Century Code section 47-16-07.1, a landlord may not demand or receive security — however it is denominated — in an amount or value greater than one month’s rent. The phrase “however denominated” matters: a landlord cannot escape the cap by calling the money a cleaning fee, a redecorating fee, or a move-in charge. If it functions as security for the tenancy, it counts against the one-month limit. That single ceiling is the default for nearly every North Dakota tenancy.

The carve-outs are narrow, and none is a general license to charge more. Two of them raise the security cap itself to two months — a tenant convicted of a felony, and a tenant who has had a judgment entered against them for violating the terms of a previous rental agreement. The third — the pet deposit — is a separate deposit with its own rules rather than a bump to the general cap.

Exception One: A Tenant Convicted of a Felony

North Dakota Century Code section 47-16-07.1 lets a landlord accept up to two months’ rent as security from an individual who has been convicted of a felony offense. The stated purpose is to give the landlord a way to say yes — it is framed as an incentive to rent to a tenant the landlord might otherwise decline. This is a ceiling, not a requirement: the landlord may still choose one month, and nothing forces a higher deposit on a tenant with a record. This ground is tied to a felony conviction specifically; a rough rental history alone does not trigger it — but a prior-lease judgment does, and that is the second exception below. Read the current statute carefully before relying on it.

Exception Two: A Tenant With a Judgment for Violating a Previous Rental Agreement

North Dakota Century Code section 47-16-07.1 contains a second, separate two-month ground that is easy to overlook. A landlord may demand up to two months’ rent as security from an individual who has had a judgment entered against that individual for violating the terms of a previous rental agreement. This is a distinct exception from the felony ground: it turns on a court judgment for breaking an earlier lease — an eviction judgment for a lease violation is the classic example. The distinction matters. A mere past eviction is not enough by itself; there must be a judgment entered against the tenant for violating a previous rental agreement. A tenant who once moved out under threat of eviction, or whose case was dismissed or settled with no judgment, does not fall under this ground. But where a court has actually entered such a judgment, the statute lets the landlord raise the security to two months. As with the felony ground, this is a ceiling and not a requirement, and you should confirm the current statute and, where a specific judgment is in play, an attorney’s read of whether it qualifies.

Exception Three: A Separate Pet Security Deposit

The third exception is a pet security deposit, and it sits alongside the general deposit rather than raising the one-month cap. A landlord may charge a pet deposit for an animal that is not a service animal, and not a companion or assistance animal required as a reasonable accommodation for a tenant with a disability. Where a pet deposit is allowed, it may not exceed the greater of two thousand five hundred dollars or an amount equal to two months’ rent. A landlord may never charge a pet deposit for a service or assistance animal — doing so risks a fair-housing violation on top of the deposit rules.

North Dakota is one of the states that tells a landlord exactly where to keep the deposit. Under North Dakota Century Code section 47-16-07.1, the landlord must place the security deposit in a federally insured interest-bearing savings or checking account held for the benefit of the tenant. This is stricter than the many states that let a landlord commingle deposits with general operating funds and pay no interest. In North Dakota, the deposit is the tenant’s money held in trust, and it must sit in a real, insured, interest-earning account.

The practical consequence is that a North Dakota landlord should never fold deposits into a personal or business checking account that is spent down over the month. Keep the deposit segregated in a dedicated insured account, track each tenant’s balance, and keep records showing the account exists and the deposit is in it. If a dispute reaches court, being able to show the deposit was held as the statute requires is part of demonstrating good faith.

North Dakota ties interest to the length of the tenancy. Under North Dakota Century Code section 47-16-07.1, a landlord is not required to pay interest on the deposit if the period of occupancy was less than nine months. Once the occupancy reaches nine months or more, the interest that has accrued on the deposit is owed to the tenant and is paid out with the deposit at the end of the lease.

Because the deposit must be held in an interest-bearing account from the start, the interest is simply whatever the account earned for the tenant’s benefit over a qualifying tenancy. Secondary summaries often describe the applicable rate by reference to a published benchmark, but rate mechanics and rounding can shift, so a landlord should confirm the current interest rule and rate before calculating what to pay. The safe practice is to track the account’s earnings from day one so the interest figure is documented and ready when the return is due.

North Dakota deposit law lets a landlord deduct only for a defined set of purposes, and the landlord bears the burden of proving each deduction is legitimate. Anything not clearly justified is presumed to be the landlord’s cost to absorb — and a deduction the landlord cannot document is a deduction the landlord loses.

Permitted Deductions

• Unpaid rent. Rent that remains owed for the final month or any earlier period of the tenancy.
• Damage beyond ordinary wear and tear. Holes in walls, broken fixtures, missing items, and other harm the tenant or their guests caused — not the natural aging of the unit.
• Unpaid utilities. Utility charges the tenant owed under the lease that the landlord had to cover.
• Cleaning to move-in condition. The reasonable cost to return the unit to the level of cleanliness it had at move-in — smoke damage, pet contamination, or unusual filth, not a routine turnover cleaning that any tenant would trigger.
• Other lease-specified charges. Specific charges the lease clearly authorizes, such as unreturned-key fees, that reflect a real cost.

Not Deductible — Ordinary Wear and Tear

Ordinary wear and tear is the natural deterioration of a unit from normal living, and the landlord must absorb it. North Dakota, like every state, treats these as non-deductible:

• Faded or lightly scuffed paint, and small nail holes from hanging pictures.
• Carpet worn thin along walkways from ordinary foot traffic, with no stains or pet damage.
• Minor marks, loose grout, or caulk that has aged around tubs and sinks.
• Worn but still-functioning appliances and fixtures that simply reached the end of their useful life.

The deadline North Dakota landlords miss most often is the thirty-day return rule. Under North Dakota Century Code section 47-16-07.1, the landlord must deliver or mail two things to the tenant’s last furnished address within thirty days after the lease terminates: any remaining portion of the deposit (plus any interest owed), and a written itemized statement explaining every deduction. Any part of the deposit not returned must be itemized in that written statement.

The Forwarding Address Trigger

North Dakota’s statute directs the landlord to mail the deposit and itemization to the tenant’s last furnished address, and in practice a written forwarding address is treated as the trigger that starts the landlord’s return duty. That cuts both ways. For the landlord, it means the safe move is to request the tenant’s forwarding address in writing at move-out and calendar thirty days from when you receive it. For the tenant, it means the surest way to get the deposit back is to provide a forwarding address in writing, because the landlord is directed to that address. Keep proof of when the address was received and when the return was mailed.

North Dakota backs the deposit rules with real teeth. Under North Dakota Century Code section 47-16-07.1, a landlord who retains security deposit money without reasonable justification is liable for treble damages — three times the amount wrongfully withheld. That multiplier is on top of returning whatever was wrongfully kept, and it is the reason North Dakota deposit disputes are worth taking seriously even when the underlying deposit is modest.

“Without reasonable justification” is the key phrase. A landlord who returns the deposit and a clear itemized statement on time, with documentation for each deduction, has a reasonable justification even if a specific charge is later disputed and reduced. The treble penalty targets the landlord who keeps the deposit with no basis, invents charges, refuses to itemize, or blows past the thirty-day deadline. Doing the return correctly is not just good practice — it is the defense to the penalty.

Put the rules together and the North Dakota move-out becomes a repeatable checklist rather than a judgment call. Follow this sequence and treble-damages exposure all but disappears.

A thorough move-out record starts at move-in. Use a documented move-in and move-out checklist and photographs at both ends so you can prove exactly what the tenant caused, and put the deposit terms in a clear North Dakota lease agreement from the start. General landlord paperwork is available among our free landlord forms.

Most deposit disputes never reach a courtroom, but when they do in North Dakota, they usually land in small claims court — a forum designed to be used without a lawyer. As of 2026, the North Dakota small claims limit is fifteen thousand dollars, which comfortably covers a deposit dispute and the treble-damages multiplier in most cases. Larger claims proceed in district court. Verify the current limit, which the Legislature adjusts over time.

The pattern is consistent: North Dakota deposit cases are won on paper. The landlord who documents condition at both ends, holds the deposit in the required account, itemizes clearly, adds interest when owed, and mails on time rarely loses — and the tenant who keeps their own photos and a copy of the written statement is equally well positioned to recover a wrongful withholding.

Beyond a routine move-out, a handful of situations trip up North Dakota landlords because the deposit rules interact with other events. Three come up often.

When the Property Is Sold

If a landlord sells the rental, the security deposit obligation does not simply vanish. The prudent course mirrors what careful landlords do everywhere: at closing, transfer the remaining deposit (after any lawful deductions) to the new owner and document the transfer, or return the deposit to the tenant with a full accounting. Because the deposit is the tenant’s money held in an interest-bearing account, both the seller and buyer should confirm in escrow exactly how each tenant’s deposit and accrued interest are being handled, and the tenant should be told who now holds the deposit. Confirm the current handling requirements before closing on an occupied North Dakota property.

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