Security Deposit Account State

[Matthew Heiser]

Are there any issues with holding a security deposit in an account of a financial institution that is headquartered in another state?  We use online deposit capture with a large bank that does not have a brick and mortar presence in North Carolina.  Thanks!

[Eric Weireter]

@Matthew Heiser:

This link provides NC Landlord and Tenant laws relating to the obligations and duties of landlords and tenants including the Tenant Security Deposit Act, which mandates the manner in which residential tenant security deposits are handled. 

Refer to Article 6. Tenant Security Deposit Act:

Further, according to this recent BIC Update - Handling Trust Monies:

Looks like you can hold security deposits in a trust account outside of the State of North Carolina only if you provide the tenant with an adequate bond in the amount of the deposits. Then, the landlord or the landlord's agent shall notify the tenant within 30 days after the beginning of the lease term of the name and address of the bank or institution where the tenant's deposit is currently located or the name of the insurance company providing the bond.

@Matthew Heiser