Notary Bond Application:
X
North Carolina Tenant Security Deposit Bond
Under the Secretary of State’s Tenant Security Deposit Act, landlords or agents are required to obtain Tenant Security Deposit Bond if they want to hold a rental security deposit in a trust outside of the State of North Carolina. The bond acts as a security deposit and financial guarantee for the tenant should the landlord or agent violate the lease or state rental regulations.
Jet is a direct surety company, allowing us to eliminate the middleman and file the bond for you right away.
*This is not a bond to be purchased in lieu of providing your landlord with a security deposit.
What Is the Bond Limit and Cost for the North Carolina Tenant Security Deposit Bond?
The bond limit is equal to the landlord or agent's required security deposit amount. Under North Carolina state regulations, the security deposit may not exceed an amount equal to two weeks of rent if a lease is week to week, one and a half months rent if the lease is month to month, or two months of rent for leases greater than month to month.
The price you pay for the bond will be based on the bond limit and a required soft credit check. Jets lowest rate for the Tenant Security Deposit Bond is $100 annually or $10 monthly. Refer to the chart for examples of preferred pricing tiers and their accompanying bond limit timelines.
| Bond Limit | Cost |
|---|---|
| Monthly | $10 |
| 1 Year | $100 |
| 2 Years | $175 |
| 3 Years | $250 |
Choosing Jet gives you the option to pay for the Tenant Security Deposit Bond either monthly or in 1, 2, or 3-year terms. No matter which payment option you choose, Jet provides affordable pricing and does not add surprise broker fees, unlike other surety carriers.
How Is the Tenant Security Deposit Bond Filed in North Carolina?
The signed and sealed Tenant Security Deposit Bond must be filed with the Secretary of State. Unlike other surety carriers, Jet will file the bond for you to avoid delays and extra costs in your bond process! A copy of the bond will then be sent to you for your personal records.
If you would prefer to file the bond yourself, our application process allows you to select that option. The original bond form should be mailed to the following address:
NC Department of the Secretary of State
PO Box 29622
Raleigh, NC 27626-0622
What Is the Purpose of the North Carolina Tenant Security Deposit Bond?
A security deposit serves as protection for landlords or agents if a tenant violates the terms of their lease or rental agreement. The deposit can be used to cover potential damages to the property, cleaning of the property, unpaid utility bills, or unpaid rent. Landlords or agents can use the Tenant Security Deposit Bond as an alternative to holding a trust account for multiple tenants’ security deposits. The bond's purpose is to act just as a security deposit would for the landlord or agent and tenant(s), as well as a financial guarantee for the tenant if any lease or state regulation violations occur.
How Does a Landlord or Agent Avoid Claims on the Tenant Security Deposit Bond?
Landlords and agents who engage in the collection of rent and security deposits in North Carolina are required by state law to follow General Statutes Chapter 42, Article 5 and Article 6. Past or present tenants are legally entitled to bring civil action against the landlord or agent which may lead to a bond claim. Landlord or agent actions that may end in a bond claim are as follows:
- Failure to provide in writing an itemized list of any damage that the security deposit was used to cover along with the remaining balance of the deposit to the tenant within 30 days of lease termination
- Withholding part of the security deposit for damages that are considered “normal wear and tear” by the state
- Withholding an amount from the deposit that exceeds the actual damages or demanding an amount that is in excess of the deposit amount
- Failure to account for and refund the balance of the tenant's security deposit in any way
If the landlord is unable to determine the extent of their claim against the deposit within 30 days, they must provide the tenant with an interim accounting of what the deposit could be used to cover no later than 30 days after the lease termination. They then must provide a final accounting of the security deposit within 60 days after the lease termination. Failure to comply with the deposit, bond, or state regulations shall void the landlord or agent's rights to retain any portion of the tenant’s security deposit.
Before civil action is taken by the damaged tenant, they can make an official complaint to the Secretary of State’s office. Although, the Secretary of State will ultimately recommend trying to resolve the issue with the landlord or agent directly and if that doesn't work, commencing civil action upon them. If the landlord or agent is unable or unwilling to come to an agreement with the tenant, the tenant may commence with civil action to recover damages resulting from noncompliance by the landlord or agent.
It is in your best interest to follow all state rules and regulations and work with your tenant on resolving any security deposit issues before civil action is taken.
What Happens If I Get a Claim on the Tenant Security Deposit Bond?
Contact Jet immediately upon receipt of the court-ordered claim payout notification. The Jet team will proceed with a review of the claim details and the court’s investigation. While we work hard to protect our bondholders from faulty claims, there is little we can do when a claim has been previously investigated and ruled as valid by a state court.
In cases of the civil courts validating a claim, Jet will pay for the reimbursement of the tenant’s security deposit up to the bond’s full limit. The court may award attorney fees to be taxed as part of the costs of the court which are also paid out by the bond. The landlord or agent is ultimately responsible for their actions and must reimburse Jet for paid-out claims. Failure to do so will result in future difficulties obtaining surety bonds such as the Tenant Security Deposit Bond.
How Does the Application Process Work With Jet?
The Jet team takes pride in making the bond application quick and simple! Our online application process for the North Carolina Tenant Security Deposit Bond will ask for basic information such as the landlord or agent's name and social security number, the preferred bond limit, and the tenant(s) name. A soft credit check, which does not affect your credit score, is completed in seconds to get you an approved rate. Once a payment option has been chosen and fulfilled, Jet will send the original bond form out for filing with the Secretary of State.
When filing a Tenant Security Deposit Bond, the North Carolina Secretary of State requires the landlord or agent to notify the tenant(s) of the name of the surety company (Jet) providing the bond and to name themselves and the tenant(s) as payees under the bond. This notification must be given to the tenant(s) within 30 days of the start of the lease.
Does the Tenant Security Deposit Bond Expire in North Carolina?
The Tenant Security Deposit Bond will remain in effect with the tenant(s) lease agreement dates and will need to be renewed if the tenant(s) chooses to renew their lease upon expiration.
If you choose Jet’s monthly payment option for this bond, there is no need for renewal. The bond will remain active as long as you continue to make monthly payments. If you choose a 1-, 2-, or 3-year payment option, Jet will send a renewal invoice prior to the bond’s expiration date. We do not require any renewal fees or extra paperwork, payment is all that is needed!
Can the Tenant Security Deposit Bond Be Cancelled?
With Jet, the bond can be cancelled at any time. Just send us a cancellation request and the Jet team will take care of filing the bond cancellation notice with the Secretary of State. Liability will be released within 30 days of the official cancellation filing date.
If you had chosen our monthly payment option for the bond, Jet will charge for the 30-day period due to the bond remaining active during that timeline. If the annual or multiple-year payment option was chosen, Jet will review your bond to see if there is any premium available for reimbursement to the landlord or property management agent.
