Most residential landlords require tenants to pay a security deposit to cover any repairs needed when the tenant moves out, or to cover the tenant’s failure to pay the last month's rent.

Laws vary from state to state, but many states have statutes that provide the maximum amount of security deposit a landlord may require for a residential lease and the costs for which the landlord may use the security deposit (cleaning, repairs, unpaid rent) following termination of the lease.

These laws also provide a specific deadline (often 30-60 days) for the landlord to return the tenant’s security deposit following termination of the lease—after deducting any amount properly withheld, as allowed by law.

In North Carolina, the Residential Rental Agreements Act (N.C. Gen. Stat. §§ 42-50 to 42-56) regulates security deposits for residential leases. Landlords can charge up to two weeks' rent for a week-to-week lease, one and a half months' rent for a month-to-month lease, and two months' rent for leases longer than month-to-month. The security deposit can be used for unpaid rent, damage due to tenant negligence or noncompliance with the lease terms, nonfulfillment of the rental period, unpaid bills that become a lien against the rented property, costs of re-renting the premises after a breach by the tenant, costs of removal and storage of tenant's property after a summary ejectment proceeding, and court costs. Landlords must provide an itemized list of damages and charges if they withhold any portion of the security deposit. North Carolina law requires landlords to return the security deposit or provide the itemized list within 30 days after the end of the tenancy. If the extent of the landlord's claim against the security deposit cannot be determined within that time, the landlord must provide an interim accounting at 30 days and a final accounting within 60 days after the tenancy ends.