N.C. Gen. Stat. § § 42-50
Deposits from the tenant.
Operative Text
Security deposits from the tenant in residential dwelling units shall be deposited in a trust account with a licensed and federally insured depository institution or a trust institution authorized to do business in this State, or the landlord may, at the landlord's option, furnish a bond from an insurance company licensed to do business in North Carolina. The security deposits from the tenant may be held in a trust account outside of the State of North Carolina only if the landlord provides the tenant with an adequate bond in the amount of the deposits. The landlord or the landlord's agent shall notify the tenant within 30 days after the beginning of the lease term of the name and address of the bank or institution where the tenant's deposit is currently located or the name of the insurance company providing the bond. (1977, c. 914, s. 1; 2015-93, s. 2; 2017-25, s. 2(a).)
Under N.C. Gen. Stat. § 42-50, security deposits collected from residential tenants must be held in a trust account at a licensed, federally insured depository or trust institution operating in North Carolina, or alternatively secured by a bond from a North Carolina-licensed insurance company. If a landlord holds the deposit outside the state, an adequate bond covering the full deposit amount is required. Within 30 days of the lease start date, the landlord must inform the tenant in writing of where the deposit is held or which insurance company has issued the bond.
Plain English — not legal advice.
Operators subject to N.C. Gen. Stat. § 42-50 generally maintain residential security deposits in a dedicated trust account at a qualifying in-state financial institution, or arrange a compliant surety bond as an alternative. Compliant landlords send written notice to each tenant within 30 days of the lease commencement date, identifying the name and address of the depository institution or the bonding insurance company. Landlords who hold deposits at an out-of-state institution also secure and disclose an adequate bond equal to the deposit amount.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
N.C. Gen. Stat. § 42-50 gives residential tenants the right to receive written notice within 30 days of their lease start date identifying where their security deposit is held or which insurance company has bonded it. If that notice is not received, tenants may wish to make a written request to the landlord for the required information, and can consult a tenant-rights organization or the North Carolina courts for guidance on available remedies. Failure by a landlord to comply with this provision may be relevant in any later dispute over the return of the deposit.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 14, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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