North Carolina SB 916: Tenant Security Deposit/Interest-Bear. Acct.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
S 1
SENATE BILL 916

Short Title: Tenant Security Deposit/Interest-Bear. Acct. (Public)
Sponsors: Senators Dorsett; Davis, Stein, and Vaughan.
Referred to: Commerce.
March 26, 2009
*S916-v-1*
A BILL TO BE ENTITLED 1
AN ACT PROVING THAT LANDLORDS SHALL DEPOSIT ALL TENANT SECURITY 2
DEPOSITS IN AN INTEREST-BEARING TRUST ACCOUNT AND THE INTEREST 3
SHALL BE REMITTED TO THE NORTH CAROLINA HOUSING TRUST FUND. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 42-50 reads as rewritten: 6
"§ 42-50. Deposits from the tenant. 7
Security deposits from the tenant in residential dwelling units shall be deposited in a an 8
interest-bearing trust account with a licensed and insured bank or savings institution located in 9
the State of North Carolina or the landlord may, at his option, furnish a bond from an insurance 10
company licensed to do business in North Carolina. The security deposits from the tenant may 11
be held in a trust account outside of the State of North Carolina only if the landlord provides 12
the tenant with an adequate bond in the amount of said deposits. The landlord or his agent shall 13
notify the tenant within 30 days after the beginning of the lease term of the name and address of 14
the bank or institution where his deposit is currently located or the name of the insurance 15
company providing the bond.located." 16
SECTION 2. G.S. 42-52 reads as rewritten: 17
"§ 42-52. Landlord's obligations. 18
(a) The landlord shall direct the bank in which the tenant security deposit is located to 19
do all of the following: 20
(1) Remit interest or dividends, less any deductions for bank service charges, 21
fees, and taxes collected with respect to the deposited funds, at least 22
quarterly to the North Carolina Housing Trust Fund at the North Carolina 23
Housing Finance Agency. If the bank does not waive service charges or fees 24
on tenant security deposit trust accounts, reasonable customary account 25
maintenance fees may be assessed but only against accrued interest and 26
funds belonging to the landlord maintaining the account. Fees for wire 27
service, insufficient funds, bad checks, stop payment orders, account 28
reconciliation, negative collected balances, and check printing are business 29
costs or costs billable to others and may not be charged against the interest 30
earned by a tenant security deposit trust account. 31
(2) Transmit with each remittance to the North Carolina Housing Trust Fund at 32
the North Carolina Housing Finance Agency a statement showing the name 33
of the landlord maintaining the account with respect to which the remittance 34
is sent, the earnings period, and the rate of interest applied in computing the 35
remittance. 36

General Assembly of North Carolina Session 2009
Page 2 Senate Bill 916-First Edition
(3) Transmit to the landlord maintaining the account at the same time action is 1
taken as provided in subdivision (2) of this subsection a report showing the 2
amount remitted to the North Carolina Housing Trust Fund at the North 3
Carolina Housing Finance Agency, the earnings period, and the rate of 4
interest applied in computing the remittance. 5
(b) Upon termination of the tenancy, money held by the landlord as security may be 6
applied as permitted in G.S. 42-51 or, if not so applied, shall be refunded to the tenant. In either 7
case the landlord in writing shall itemize any damage and mail or deliver same to the tenant, 8
together with the balance of the security deposit, no later than 30 days after termination of the 9
tenancy and delivery of possession by the tenant. If the tenant's address is unknown the 10
landlord shall apply the deposit as permitted in G.S. 42-51 after a period of 30 days and the 11
landlord shall hold the balance of the deposit for collection by the tenant for at least six months. 12
The landlord may not withhold as damages part of the security deposit for conditions that are 13
due to normal wear and tear nor may the landlord retain an amount from the security deposit 14
which exceeds his actual damages. 15
(c) Any agreement between a landlord and a tenant that seeks to avoid the rights, 16
obligations, and remedies created by this Article is void as contrary to public policy." 17
SECTION 3. This act becomes effective October 1, 2009. 18