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.
Under New Hampshire security deposit law, landlords can charge up to one month’s rent, must keep the deposit in a New Hampshire financial institution or secure it with a bond through the local municipality, and must return it within 30 days after move-out with an itemized statement for any deductions. For New Hampshire landlords and property owners, these rules shape how a deposit can be collected, stored, used, and refunded.
A security deposit is a practical way to protect a rental property and enforce lease terms. In New Hampshire, it may 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.
At Cardinal Point Property Management,, we've put together this overview to help property owners handle deposits correctly and avoid disputes with tenants. It explains the maximum deposit amount, storage and disclosure requirements, refund deadlines, allowable deductions, the difference between normal wear and tear and damage, pet deposit rules, what happens to deposits after a property sale, and the practices that support fair treatment and strong landlord-tenant relationships.
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 maximum deposit of one month's rent or $100, whichever is higher, though a security deposit greater than one month's rent may be allowed when the monthly rent exceeds $1,000. 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 an owner-occupied building with five or fewer 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
New Hampshire landlords must provide their tenants with a signed receipt, or written receipt, for the security deposit, and the only exception 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, and it should be kept with the lease agreement to help protect the tenant’s basic rights regarding the deposit.
Regardless of payment method, you must notify the tenant of their right to document the property's condition upon move-in. The tenant may also submit a written list of pre-existing damages within five days of move-in. These records can help prevent security deposit disputes later.
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 bank or trust company account at a New Hampshire financial institution, including a Hampshire bank, where the deposit must be kept in a separate, interest-bearing account, 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, and provide written notice of the bank within 30 days. If held for at least one year, the tenant is entitled to interest based on actual bank earnings or 1% annually, and may request accrued interest every three years and at least 30 days before the tenancy anniversary.
Failure to pay required interest can expose landlords to penalties. Under New Hampshire security deposit laws, violations may also be treated as Consumer Protection Act violations.
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 as allowed under state landlord tenant laws. There's no cap on deductions, but they must be reasonable and made in good faith. Because the deposit is the tenant's personal money, it cannot be treated as prepaid rent, and tenants cannot withhold rent expecting it to cover that obligation.
For more serious lease violations or ongoing noncompliance, effective eviction management strategies may also be necessary. Following New Hampshire security deposit laws and other security deposit laws helps protect both parties' financial interests in the rental unit.
Sale of Rental Property
After selling the rental property in New Hampshire, you must transfer the security deposit to the new owner within 5 days of selling the property.
Once the new owner receives the deposit, responsibility for complying with the rules transfers to them.
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; this ordinary wear, including minor scuffs, cannot be deducted from the security deposit. 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 prevent disputes over damage claims.
Return of a Tenant’s Security Deposit in New Hampshire
After the tenant vacates or when the tenancy ends, 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 and an itemized statement within 20 days. The notice must specify repairs to be made, their associated costs, and any supporting evidence like invoices and receipts. If no lawful deductions apply, return the full deposit.
Failure to return the deposit on time can lead to double damages, and landlords may owe double the deposit amount for security deposit violations; that can prompt legal action in small claims court and, in some cases, attorney's fees, so serious disputes may warrant a qualified attorney.
Landlords should document compliance carefully, since a court found against owners in deposit cases where statutory duties were not met despite arguments about substantial compliance.
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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.
