Quick Reference: North Dakota Security Deposit Rules at a Glance

A landlord in Fargo receives keys on 15 July. The lease ran to 31 July. She posts the itemisation and the balance on 12 August, twenty-eight days after the keys came back, and considers the file closed.

Several 2026 guides would tell her that was the right calculation. One states that North Dakota gives you "exactly 30 calendar days from when the tenant moves out."

That is not what the statute says. Section 47-16-07.1(3) requires the itemisation and notice within thirty days after termination of the lease and delivery of possession by the lessee. Two events, and the clock runs from the later. Her lease terminated on 31 July, so her deadline was 30 August. In that direction the error costs nothing. Reverse the facts, with a tenant who returns keys three weeks after the lease ends, and the same misreading costs a landlord three weeks.

There is a second, more consequential misconception, and in February 2026 the North Dakota Supreme Court addressed it directly. Missing the itemisation deadline does not automatically forfeit the deposit or trigger treble damages. The statute attaches treble damages to money withheld without reasonable justification, and the Court has now confirmed that where a landlord is late, the question is whether the tenant was prejudiced.

Getting both of those right is what separates a defensible deposit file from an expensive one.

Step 1: The Cap, and Two Exceptions Narrower Than They Sound

Section 47-16-07.1(1) provides that a lessor may not demand or receive security, however denominated, in an amount or value in excess of one month's rent, with two exceptions.

The felony exception, paragraph (a). A lessor may accept an amount or value up to two months' rent as security from an individual convicted of a felony offence, as an incentive to rent the property to the individual.

Read the framing. The statute says "may accept," and characterises the higher deposit as an incentive to rent to someone the landlord might otherwise decline. It is a permission to say yes on stronger terms, not a licence to load a deposit onto any applicant with a record.

The prior judgment exception, paragraph (b). A lessor may demand up to two months' rent from an individual who has had a judgment entered against that individual for violating the terms of a previous rental agreement.

The test is a judgment. Several published guides describe this as applying to a tenant with "a history of eviction." That is not the statutory language. An eviction filing, a dismissed case, a poor reference or an unpaid balance is not a judgment for violating the terms of a previous rental agreement. If you are charging two months on this basis, you should be able to identify the judgment.

The pet deposit sits outside the cap. Under § 47-16-07.1(2), a lessor may charge a pet security deposit for an animal that is not a service or companion animal required by a tenant with a disability as a reasonable accommodation, and it may not exceed the greater of $2,500 or two months' rent.

And "however denominated" closes the obvious workaround. Calling something a move-in fee or a redecoration charge does not move it outside subsection (1) if it is money required as security.

Because both exceptions turn on documented facts about a specific applicant, the screening record and the lease need to show which exception was relied on and why. Holding that alongside the lease through contracts and renewals is what makes a two-month deposit defensible if it is questioned.

Step 2: Where the Money Has to Sit

Section 47-16-07.1(1) is prescriptive about custody, and it is one of the few things North Dakota does require.

The lessor shall deposit the money in a federally insured interest-bearing savings or checking account for the benefit of the tenant.

Three elements, all mandatory. Federally insured. Interest-bearing. Held for the benefit of the tenant.

Interest follows occupancy length. The deposit and any interest accruing on it must be paid to the lessee on termination, subject to the permitted deductions. But under subsection (3), a lessor is not required to pay interest on security deposits if the period of occupancy was less than nine months in duration.

Keep the two ideas separate. The deposit must be placed in an interest-bearing account. The landlord is not required to pay the accrued interest to the tenant where occupancy was under nine months.

The statute requires the deposit to be held in a federally insured, interest-bearing savings or checking account for the benefit of the tenant. Managers should therefore maintain a clear tenant-level record showing the amount held, applicable interest, and eventual disposition. Whatever a state requires of the account, the deposit remains a liability from receipt until a valid disposition, which is the reconciliation discipline set out in our guide to security deposit accounting across intake, holding and reconciliation, and which is reflected in how deposits appear on the balance sheet.

Step 3: The 30 Days, and Why It Has Two Triggers

This is where most published guidance goes wrong, and where a manager can lose weeks or gain them.

Section 47-16-07.1(3) requires that application of any portion of a deposit not paid to the lessee on termination must be itemised by the lessor. That itemisation, together with the amount due, must be delivered or mailed to the lessee at the last address furnished the lessor, along with a written notice, within thirty days after termination of the lease and delivery of possession by the lessee.

Four operational points.

• Two triggers, and the clock runs from the later. Termination of the lease and delivery of possession. A tenant who leaves early does not start your clock early. A tenant who holds over does not let you start it at the lease end date.

• Three things go out, not one. The itemisation, the amount due, and a written notice stating any amount still due the lessor or the refund due the lessee. A refund cheque with a list of deductions attached is not obviously the full package; the notice states the net position either way.

• The address is prescribed. Delivered or mailed at the last address furnished the lessor. Where no forwarding address was given, that is the address you already hold. The absence of one is not an excuse for inaction.

• And there is a one-year tail. Amounts unclaimed within one year of the termination of the lease agreement fall under the reporting requirements of § 47-30.2-04, North Dakota's unclaimed property provisions. An unclaimed balance does not become the landlord's money.

Because the deadline runs from the later of two events, it cannot be a fixed offset from move-out day. Recording the lease termination date and the possession date as separate fields, and deriving the thirtieth day from whichever is later, is exactly what workflow customization exists to enforce.

One note on scope. North Dakota's domestic violence termination provision at § 47-16-17.1 contains its own subsections governing a tenant's early termination. If a tenancy ends under that section, check it directly before applying the ordinary two-trigger rule, as it may affect when the deposit timing begins.

Step 4: What You May Actually Deduct

Section 47-16-07.1(3) permits the deposit and accrued interest to be applied to three categories:

1. Damages by reason of deteriorations or injuries caused by the lessee's pet, or through the negligence of the lessee or the lessee's guest;

2. Any unpaid rent; and

3. The costs of cleaning or other repairs that were the lessee's responsibility and are necessary to return the unit to its original state, reasonable wear and tear excepted.

Two limits repay attention.

Category 1 is fault-based. It covers damage from the pet, or through the negligence of the lessee or a guest. That is narrower than a general "any damage caused by the tenant" clause.

And "reasonable wear and tear excepted" governs category 3. The comparison is to the unit's original state, which makes the condition at the start of the tenancy the benchmark for anything charged at the end.

Step 5: The Condition Statement Is Your Starting-Condition Evidence

Section 47-16-07.2 is short, mandatory, and disproportionately useful in a deposit dispute.

A landlord shall provide the tenant with a statement describing the condition of the facilities in and about the premises to be rented at the time of entering a rental agreement. The statement shall be agreed to and signed by the landlord and tenant. And it shall constitute prima facie proof of the condition of the facilities and the premises at the beginning of the rental agreement.

That third sentence is why it belongs in a deposit article. Deductions are measured against the unit's original state, and treble damages turn on whether a withholding was without reasonable justification. A landlord with a signed statement has prima facie proof of the starting condition and stronger evidence to support a disputed deduction. Without it, the landlord loses that statutory evidentiary baseline and may need to rely more heavily on photographs, inspection records and other evidence.

Note the statutory trigger is entering the rental agreement, not move-in day. Most managers complete it during the move-in walkthrough, which is sensible operationally, but the obligation attaches at signing. Producing that dated, signed record, and the matching move-out record, is what move-in and move-out management is designed to capture.

Step 6: Treble Damages, and What Actually Triggers Them

Section 47-16-07.1(4) is one sentence: a lessor is liable for treble damages for any security deposit money withheld without reasonable justification.

Three things follow, and two cut against how this provision is usually described.

The trigger is the character of the withholding, not the calendar. The statute does not say a lessor who fails to comply with subsection (3) is liable for treble damages. It says treble damages for money withheld without reasonable justification.

The multiplier is three, applied to the money withheld.

And the section does not provide attorney's fees. Several published guides state that a North Dakota deposit claim carries "treble damages plus attorney's fees." Section 47-16-07.1 contains no fee provision. Chapter 47-16's fee provision, § 47-16-13.6, allows fees on any right or action provided by §§ 47-16-13.1 through 47-16-13.6, a defined range that does not include § 47-16-07.1. Fees may be available by another route in a particular case, and that is a point for counsel, but the deposit section itself does not supply them.

One citation error worth knowing about. At least one current guide cites "NDCC § 47-16-07.3" as the treble damages provision. Section 47-16-07.3 is the landlord entry provision. The deposit remedy is § 47-16-07.1(4).

Step 7: What the Supreme Court Said About a Late Itemisation

In Meridian Property Management, LLC v. Cordie, 2026 ND 52, decided 26 February 2026, the North Dakota Supreme Court addressed the question every manager who has ever missed the deadline wants answered.

A West Fargo tenant fell into dispute over a pet-related charge and did not pay October rent. The landlord served a notice to vacate and obtained an eviction judgment including an early termination fee. The tenant vacated before the end of the term and returned the keys. The landlord sent the itemised list of damages late, then sued for repair costs and post-departure rent. The tenant removed the small claims action to district court and argued that the untimely itemisation should bar recovery.

The Court's reasoning is the part to read. It observed that when a lessor withholds security deposit money without reasonable justification, the lessor is liable for treble damages under § 47-16-07.1(4). But the legislature chose not to specify a remedy for when a lessor fails to provide a timely itemisation of damages, such as forfeiting the right to retain deposit money reasonably withheld or the right to pursue a separate damages action.

That silence, the Court held, does not make the statute ambiguous. Citing Johnson v. North Dakota Workers' Compensation Bureau and City of Fargo v. Wieland, it applied the settled principle that where no statutory remedy is provided for a statutory violation, the court looks to whether the victim of the violation was prejudiced.

On the facts, the delay caused no prejudice. The district court had found the landlord had reasonable justification to withhold the deposit despite the untimely itemisation, because the damages exceeded the deposit. The Supreme Court affirmed, holding that the failure to timely provide an itemised statement did not bar recovery.

Three practical takeaways, and one caution.

• A late itemisation is not automatic forfeiture. Guides stating that a one-day overrun costs you the deposit and treble damages are describing a rule the statute does not contain and the Supreme Court has now declined to read into it.

• But the analysis is prejudice, not excuse. Meridian turned on findings that the damages exceeded the deposit and the withholding was reasonably justified. A landlord who is late and cannot justify the withholding is in a different position entirely.

• And the fee award in that case came from elsewhere. The attorney's fees were awarded because the tenant had removed the case from small claims court, under a separate provision. It was not a fee award under § 47-16-07.1.

The caution: none of this is permission to miss the deadline. It is a reason to make sure that if you ever do, the underlying withholding is documented, itemised and demonstrably justified, because that is now expressly the question a court will ask.

Step 8: Selling the Property Does Not End Your Exposure

Section 47-16-07.1(5) is the provision acquisitions teams most often miss.

The security deposit and any interest accrued transfer to the grantee of the lessor's interest in the leased premises, and the grantor is not relieved of liability until transfer of the security deposit to the grantee.

Liability does not end at closing. It ends on transfer of the deposit. A seller who conveys the property but leaves deposits in an old account remains liable to the tenant.

For a buyer, the deposit schedule is a diligence item with a number attached: deposits, accrued interest, occupancy start dates for the nine-month interest test, and the signed condition statements all need to come across.

And public landlords are covered. Subsection (6) applies the section to the state and its political subdivisions that lease property and take deposits.

Step 9: One Route That Returns the Deposit Regardless

Section 47-16-07.4 sits apart from the ordinary disposition rules. A lease entered into in reliance on fraudulent misrepresentation may be terminated by the defrauded party, who is entitled to the return of any security deposit paid, together with accrued interest.

That runs both ways. A landlord who induced a lease by misrepresentation faces termination and a full deposit return with interest, irrespective of any damage claim. A landlord defrauded by an applicant has a termination route of their own.

Common North Dakota Deposit Mistakes Property Managers Make

1. Running the 30 days from move-out alone
Section 47-16-07.1(3) uses termination of the lease and delivery of possession, running from the later of the two.

2. Sending a refund without the written notice
The subsection requires the itemisation, the amount due and a written notice stating any amount still due or the refund due.

3. Doing nothing because no forwarding address was given
The statute directs delivery or mailing to the last address furnished the lessor.

4. Charging two months on a "history of eviction"
Paragraph (b) requires a judgment entered against the individual for violating the terms of a previous rental agreement.

5. Treating the felony exception as a risk premium
Paragraph (a) frames it as an incentive to rent the property to the individual.

6. Charging a pet deposit for a service or companion animal
Subsection (2) excludes an animal required by a tenant with a disability as a reasonable accommodation.

7. Renaming a deposit as a fee
Subsection (1) covers security however denominated.

8. Holding deposits outside a federally insured interest-bearing account
All three elements are required, and the account is held for the benefit of the tenant.

9. Confusing the account requirement with the interest obligation
The account must be interest-bearing; the interest need not be paid where occupancy was under nine months.

10. Deducting for ordinary wear and tear
Category 3 is expressly subject to reasonable wear and tear excepted, measured against the unit's original state.

11. Skipping the § 47-16-07.2 condition statement
It is stated as "shall," attaches at entering the rental agreement, and is statutory prima facie proof of the starting condition.

12. Assuming a late itemisation automatically forfeits everything
Meridian, 2026 ND 52, holds the legislature specified no remedy for untimely itemisation, so the court asks whether the tenant was prejudiced.

13. Treating Meridian as permission to be late
The Court relied on findings that damages exceeded the deposit and the withholding was reasonably justified. Late and unjustified is a different case.

14. Budgeting for attorney's fees on a deposit claim
Section 47-16-07.1 provides treble damages and no fee award. The fees in Meridian followed removal from small claims under a separate provision.

15. Treating an unclaimed balance as forfeited
Amounts unclaimed within one year fall under § 47-30.2-04.

16. Selling without transferring the deposits
Under subsection (5) the grantor is not relieved of liability until transfer to the grantee.

Conclusion

North Dakota's deposit rules are short, and the risk sits in two places most guidance gets wrong.

• The deadline has two triggers. Thirty days after termination of the lease and delivery of possession, running from the later. Not thirty days from move-out.

• And treble damages attach to the withholding, not the date. Section 47-16-07.1(4) makes a lessor liable for three times any deposit money withheld without reasonable justification. In Meridian Property Management v. Cordie, 2026 ND 52, the Supreme Court held that because the legislature specified no remedy for an untimely itemisation, the question is whether the tenant was prejudiced. On those facts, where damages exceeded the deposit and the withholding was reasonably justified, the delay did not bar recovery.

• The cap has two narrow exceptions. One month, except up to two months as an incentive to rent to an individual convicted of a felony, or where an individual has had a judgment entered against them for violating a previous rental agreement. A pet deposit sits outside that.

• And the best evidence was created at signing. The § 47-16-07.2 condition statement is prima facie proof of the unit's original state, which is the benchmark every cleaning and repair deduction is measured against, and it is what a "reasonable justification" argument is built on.

For managers running North Dakota portfolios in Fargo, Bismarck, Grand Forks or the Bakken markets, the deposit file rests on four records: the lease termination date, the possession date, the signed condition statement, and a ledger separating rent from other charges. None can be assembled after a claim arrives. Keeping the deposit balance, accrued interest and each deduction tied to the tenancy through collecting rent and payments, and surfacing every approaching thirty-day deadline through dashboards and reports, is what turns a short statutory clock into a visible one.

This blog is for informational purposes only and does not constitute legal advice. North Dakota security deposit requirements sit at N.D.C.C. § 47-16-07.1, within Chapter 47-16 on leasing of real property, with the condition statement at § 47-16-07.2, entry at § 47-16-07.3, fraud termination at § 47-16-07.4, domestic violence termination at § 47-16-17.1, unclaimed property reporting at § 47-30.2-04, and eviction governed separately by Chapter 47-32. Meridian Property Management, LLC v. Cordie, 2026 ND 52, was decided 26 February 2026; its holding on untimely itemisation turns on a prejudice analysis and on findings specific to those facts. House Bill 1272 of the 2025 session, which proposed amending § 47-16-07.1 and adding mandatory inspection provisions, failed on second reading in the House on 7 February 2025 and did not become law. Where a tenancy ends under § 47-16-17.1, check that section directly before applying the ordinary deposit timing rule. Local ordinances may impose additional requirements. Verify the current statutory text with the North Dakota Legislative Branch, whose full Chapter 47-16 text is the primary source, and consult a licensed North Dakota attorney.

Frequently Asked Questions

Q1. How much can a North Dakota landlord charge as a security deposit?
One month's rent, except up to two months as an incentive to rent to an individual convicted of a felony offence, or from an individual with a judgment entered against them for violating a previous rental agreement. A separate pet deposit may be the greater of $2,500 or two months' rent.

Q2. When must a North Dakota deposit be returned?
Within 30 days after termination of the lease and delivery of possession by the lessee, running from the later of those two events, with an itemisation, the amount due and a written notice.

Q3. Where must the deposit be held?
In a federally insured interest-bearing savings or checking account for the benefit of the tenant, under § 47-16-07.1(1).

Q4. Does the landlord have to pay interest?
The account must be interest-bearing, but the landlord is not required to pay the accrued interest to the tenant where the period of occupancy was less than nine months.

Q5. What happens if the itemisation is late?
Under Meridian Property Management v. Cordie, 2026 ND 52, the legislature specified no remedy for untimely itemisation, so the court asks whether the tenant was prejudiced. On those facts the delay did not bar recovery, because damages exceeded the deposit and the withholding was reasonably justified.

Q6. What is the penalty for wrongly withholding a deposit?
Treble damages under § 47-16-07.1(4), for any security deposit money withheld without reasonable justification. The section does not itself provide attorney's fees.

Q7. What if the tenant leaves no forwarding address?
The statute directs the itemisation and notice to be delivered or mailed at the last address furnished the lessor. Unclaimed amounts fall under § 47-30.2-04 after one year.

Q8. Does selling the property end the landlord's deposit liability?
No. Under § 47-16-07.1(5) the deposit and accrued interest transfer to the grantee, but the grantor is not relieved of liability until the deposit is actually transferred.