Key Takeaways
- New Hampshire allows landlords to charge a security deposit of up to one month’s rent.
- Landlords must either store deposits in a New Hampshire financial institution and disclose key account details to tenants, or post a bond with the local municipality.
- Deposits must be returned within 30 days of move-out, along with an itemized statement for any deductions supported by documentation. Following these steps ensures transparency and helps maintain a strong landlord-tenant relationship.
Collecting a security deposit at the beginning of a lease is a common and effective way for landlords to protect their property and uphold the terms of the rental agreement. In New Hampshire, this deposit serves as a safeguard that can help cover:
- Unpaid rent.
- Professional cleaning services.
- Utility costs associated with the unit.
- Late fees outlined in the lease.
- Repairs for damage beyond normal wear and tear.
Like many states, New Hampshire has clear regulations to ensure security deposits are handled fairly and transparently. At Cardinal Point Property Management, we've created this helpful overview of New Hampshire’s security deposit laws to support property owners in navigating these important responsibilities with confidence.
Here's a Guide to New Hampshire’s Security Deposit Law
Maximum Security Deposit
In New Hampshire, the maximum security deposit a landlord can collect is the equivalent of one month’s rent. This rule has two key exceptions: it does not apply if you are renting out a single-family home and own no other rental properties, or if you live in one of the units of a building with four or fewer total units.
Nonrefundable Fees
In New Hampshire, all deposits must be refundable. Under New Hampshire’s landlord-tenant law, landlords are not allowed to charge nonrefundable deposits or fees, regardless of the terminology used. Attempting to label a deposit as a “cleaning fee” or “damage deposit” to avoid legal limits is not permitted under state law.
This rule also applies to pet deposits. While you may charge an additional deposit for tenants with pets, the total security deposit — including the pet deposit — must not exceed the maximum amount allowed by law (one month’s rent). Landlords must not attempt to circumvent the deposit cap by reclassifying charges under different names.
Importantly, additional pet deposits do not apply to tenants with service animals or emotional support animals. Under the Fair Housing Act, disability is a protected characteristic, and landlords may not impose extra fees on tenants who require assistance animals as a reasonable accommodation.
Written Notice of Security Deposit Receipt
Some states require landlords to provide their tenants with a written receipt for the security deposit. The only exception to this is if the tenant pays the rent by check.
The receipt must include the amount received, the date received, and instructions on what the tenant must do to obtain a refund.
Regardless of payment method, you must notify the tenant of their right to document the property’s condition upon move-in.
Storing and Withholding a Tenant’s Security Deposit in New Hampshire
New Hampshire landlords must store security deposits in one of two ways: either in a financial institution or through a posted bond.
If held in a bank, credit union, or similar institution, landlords must disclose the institution’s name, deposit amount, interest rate, and account number. If held for at least one year, the tenant is entitled to interest at the standard savings rate.
Alternatively, landlords may post a bond with the city or town clerk. The bond must be issued by a company authorized to do business in New Hampshire.
Landlords may deduct from the deposit for unpaid rent, late fees, lease-specified taxes, damage beyond normal wear and tear, or other lawful lease charges. There’s no cap on deductions, but they must be reasonable and made in good faith.
For more serious lease violations or ongoing noncompliance, effective eviction management strategies may also be necessary.
Sale of Rental Property
After selling the rental property in New Hampshire, you must transfer the security deposit to the incoming landlord. This must be done within 5 days of selling the property.
After the incoming landlord has received it, the responsibility for abiding by the rules will be theirs to uphold.
You must also notify the tenant of the transfer, including the amount transferred and the name and address of the incoming landlord.
Normal Wear and Tear vs. Excessive Damage
Distinguishing normal wear and tear from excessive damage is key to avoiding disputes when returning a tenant’s deposit.
Normal wear includes gradual, expected deterioration—such as faded paint, worn carpet, or stained bath fixtures—that results from everyday use. Landlords cannot charge tenants for addressing these conditions.
Excessive damage, on the other hand, goes beyond reasonable use. This may include broken tiles, torn carpets, missing fixtures, or large holes in the walls caused by negligence or intentional misuse. These types of issues may justify deductions from the security deposit.
While New Hampshire law does not mandate a walk-through inspection, landlords are encouraged to offer one before the tenant moves out. This allows both parties to document the property’s condition and helps reduce conflicts over damage claims.
Return of a Tenant’s Security Deposit in New Hampshire
After a tenant moves out of their rented premises, you’ll have up to 30 days to return their deposit, minus any allowable deductions.
If you have made any deductions, you must send the remaining portion alongside a written notice. The notice must be itemized, and specify repairs to be made, their associated costs, and any supporting evidence like invoices and receipts.
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Conclusion
The New Hampshire security deposit law is one of many regulations that landlords must follow to run a successful and compliant rental business. Adhering to these rules helps ensure smooth communication with tenants and protects your bottom line.
If you have a question or need expert property management help, look no further than Cardinal Point Property Management. From tenant screening and lease compliance to maintenance and repairs, we offer full-service solutions tailored to New Hampshire landlords.
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws frequently change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regards to this content or any other aspect of your property management needs.
