What’s the deal with security deposit laws in New Hampshire?
What happens to the security deposits all of your tenants have paid if the city demands they find new housing? Well, for one property owner in Concord, that’s truly a tough question to answer.
In August of 2014, the city of Concord ordered immediate evictions for all residents of the Vegas Block on Main St because of several fire and safety violations. While the owners of the property needed to quickly bring it up to code, the displaced residents had to find new homes. And with only 24 hours notice, many of them weren’t sure how they were going to afford a new place.
Thankfully, the city stepped in to provide assistance, ensuring that the tenants were treated fairly and would be able to find new homes. The biggest question really was, could they get their security deposit back to help pay for a new apartment? In many cases, the deposit was paid years ago to a different landlord, so returning the money became increasingly complicated. In the meantime, a judge ordered that the landlord pay transportation and relocation fees for many of the residents.
This is obviously an unusual circumstance, and hopefully not something you’ll ever need to worry about. But, if you’re collecting security deposits from tenants, you should stay up to date on the latest laws about handling and returning the money so you never find yourself in a sticky situation with a tenant and their deposit.
In the state of New Hampshire, for example, security deposits aren’t mandatory. But, if you did collect one, you can use it to fix damages that may be considered more than the usual wear-and-tear. And for many tenants, knowing they can get their money back is incentive enough to take good care of their unit.
That said, if you rely on this money to pay for costly repairs, read on to learn about limits and return deadlines for security deposits.
Do landlords need to charge tenants a security deposit in New Hampshire?
No. But it’s important to remember that security deposits are designed to protect the landlord in the event that a tenant damages the property or changes it without permission. As mentioned above, without a security deposit, landlords or property owners are responsible for the costs of repairs beyond normal wear-and-tear.
Also important to note is that New Hampshire state law defines a security deposit as any amount of money paid to the landlord, other than the rent—no matter what you decide to term it.
What are the limits on rental deposits in New Hampshire?
A security deposit cannot be more than one month’s rent or $100, whichever amount is higher.
For example, the security deposit for a one bedroom apartment in Manchester, if the rent is $800 a month, should not exceed $800.
Note that there is no statutory limit on security deposits if the landlord and the tenant share the property.
Do landlords need to provide a receipt for a security deposit?
If the deposit is paid with any form of check, (personal, bank, government or nonprofit), no. The landlord is required to notify tenants that they have five days from when they move in to provide written notice of any existing damage to the property.
7 Habits of Highly Successful Property Managers Guide
You will discover creative ways to identify and eliminate routines that are no longer benefiting your business.Download
If the deposit is paid in any form of payment that is not a check, yes. It should include the amount paid and specify where the money is being held. Tenants should respond to the receipt within five days of moving in to cite any existing damage to the property.
Does the money need to be kept in a separate account to allow it to accrue interest?
Yes, and the bank must be within the state of New Hampshire. Landlords are responsible for providing details of the account, including the bank name and address, the amount of deposit, the interest rate, and the account number. Landlords can keep all security deposits in one account.
If a tenant stays for one year or longer, upon move out, they are owed the deposit plus any accrued interest. Interest must be equal to normal savings account interest rates in New Hampshire.
Every 3 years, tenants can request the interest earned on their deposits.
What can security deposit money be used for?
New Hampshire allows property owners and managers to use the money in any of the following situations:
- To repair substantial damage beyond normal wear-and-tear, like a broken window
- The tenant’s share of real estate tax if permitted in the lease or other written agreement
- Past due or unpaid rent
What is the deadline to return a security deposit in New Hampshire?
Tenants are owed their security deposit and any accrued interest no later than 30 days after they move out. This may be minus the cost of repairs, taxes, or unpaid rent as mentioned above.
In the latter case, a written notice with a list of deductions for repair or cleaning costs should be included.
Do landlords need to notify renters of security deposit money used to fix damages?
Yes. Landlords have 30 days to communicate this to their tenant, in writing.
If the landlord and tenant share the property and the deposit was more than one month’s rent, the landlord must provide a written agreement citing when the deposit will be returned. Otherwise, the deadline is 20 days after move out.
Where can I learn more about New Hampshire Security Deposit laws?
If you have any questions, or think you may want to learn more about security deposit laws in New Hampshire, please consult a lawyer.
- New Hampshire Department of Justice Consumer Sourcebook
- Nolo: New Hampshire Security Deposit Limits
- New Hampshire Legislature Chapter 540-A: Security Deposits
You may also be interested in:
Disclaimer: The materials on this database provide general information related to the law and are intended to provide a layman’s summary of the law. The information provided does not constitute legal advice and the manager of this database is not a law firm. These materials are intended, but cannot be promised or guaranteed to be current, complete or up-to-date. All of the information offered are intended for general informational purposes only. You should not act or rely on any of the information contained on this database without first seeking the advice of a qualified attorney.