47-16-07.1. Real property and dwelling security deposits - Limitations and requirements

47-16-07.1. Real property and dwelling security deposits - Limitations and

requirements.

1. The lessor of real property or a dwelling who requires money as a security deposit,

however denominated, shall deposit the money in a federally insured interest-bearing

savings or checking account for the benefit of the tenant. The security deposit and any

interest accruing on the deposit must be paid to the lessee upon termination of a

lease, subject to the conditions of subsection 2. A lessor may not demand or receive

security, however denominated, in an amount or value in excess of one month's rent,

except:

a. A lessor may accept an amount or value up to two month's rent, as security, from

an individual convicted of a felony offense as an incentive to rent the property to

the individual.

b. A lessor may demand an amount or value 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.

2. A lessor may charge a lessee a pet security deposit for keeping an animal that is not a

service animal or companion animal required by a tenant with a disability as a

reasonable accommodation under fair housing laws. A pet security deposit may not

exceed the greater of two thousand five hundred dollars or an amount equivalent to

two months' rent.

3. A lessor may apply security deposit money and accrued interest upon termination of a

lease towards:

a. Any damages the lessor has suffered by reason of deteriorations or injuries to the

real property or dwelling by the lessee's pet or through the negligence of the

lessee or the lessee's guest.

b. Any unpaid rent.

c. The costs of cleaning or other repairs which were the responsibility of the lessee,

and which are necessary to return the dwelling unit to its original state when the

lessee took possession, reasonable wear and tear excepted.

Application of any portion of a security deposit not paid to the lessee upon termination

of the lease must be itemized by the lessor. Such 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 contain a statement of any amount still

due the lessor or the refund due the lessee. A lessor is not required to pay interest on

security deposits if the period of occupancy was less than nine months in duration. Any

amounts not claimed from the lessor by the lessee within one year of the termination

of the lease agreement are subject to the reporting requirements of section

47-30.2-04.

4. A lessor is liable for treble damages for any security deposit money withheld without

reasonable justification.

5. Upon a transfer in ownership of the leased real property or dwelling, the security

deposit and accrued interest shall be transferred to the grantee of the lessor's interest.

The grantor shall not be relieved of liability under this section until transfer of the

security deposit to the grantee. The holder of the lessor's interest in the real property

or dwelling at the termination of a lease shall be bound by this section even though

such holder was not the original lessor who received the security deposit.

6. This section applies to the state and to political subdivisions of the state that lease real

property or dwellings and require money as a security deposit.