New Hampshire Security Deposit Law: The $1,500 Floor, 30 Day Return, and What Tenants Can Sue Over
New Hampshire law sets a unique security deposit cap: one month's rent or $1,500, whichever amount is greater. You must return deposits within 30 days and pay interest on holdings longer than one year. Here's what small landlords need to know about deposit limits, return timelines, and the tenant remedies that follow noncompliance.
The Greater-Of Cap: One Month Rent or $1,500
New Hampshire caps your security deposit at one month's rent or $1,500, whichever is greater. If you rent a unit for $800 per month, you may collect up to $1,500. If monthly rent is $1,800, you may collect up to $1,800. This floor protects landlords in lower rent markets while keeping deposits proportional in higher rent properties.
You cannot require a separate pet deposit, cleaning fee, or key deposit that pushes the total above the cap. All nonrefundable fees count toward the statutory limit. If you accept a deposit above the cap, the tenant can sue to recover the excess plus damages.
30 Day Return Window and Itemized Deductions
You must return the deposit within 30 days after the tenant vacates and surrenders possession. If you withhold any portion, you must provide an itemized list of deductions with receipts or invoices. Failure to itemize in writing forfeits your right to withhold.
Common deductions include unpaid rent, repair costs beyond normal wear, and cleaning necessary to restore the unit to move in condition. Normal wear includes faded paint, worn carpet in walkways, and minor scuffs. You cannot charge for repainting after five years of occupancy or for carpet cleaning when no stains exist.
Interest on Deposits Held Longer Than One Year
If the tenancy lasts longer than one year, you must pay interest on the deposit. The rate matches the interest paid on regular savings accounts by the bank where you hold the deposit. You do not need to maintain a separate account, but you must track the accrued interest and pay it with the final return or annually if the tenant requests.
Many small landlords miss this requirement. A tenant who rents for three years and receives no interest can sue for the unpaid amount plus attorney fees.
Tenant Remedies: Double Damages and Attorney Fees
New Hampshire law allows a tenant to sue for wrongful withholding. If a court finds you withheld the deposit in bad faith, the tenant can recover double the withheld amount plus court costs and reasonable attorney fees. Bad faith includes failing to itemize, missing the 30 day deadline without justification, or charging for normal wear.
A tenant must send a written demand before filing suit. If you cure the violation within 15 days of receiving the demand, the court may reduce or eliminate the penalty. Prompt response to tenant complaints protects you from escalated damages.
What Small Landlords Should Do Now
Review your lease language to confirm the deposit amount does not exceed one month's rent or $1,500, whichever is greater. Set a calendar reminder for 25 days after move out to finalize your inspection and mail the itemized statement. Open a savings account for deposits and track interest annually if you hold any deposit longer than 12 months.
Take timestamped photos at move in and move out. Store receipts for any repair work, and bill only for damage beyond normal wear. If the tenant disputes your deductions, respond in writing within five business days and consider mediation before litigation.
Consult an attorney for your specific situation if you face a tenant lawsuit or if your deposit practices vary by property. The New Hampshire Attorney General Consumer Protection division publishes landlord guides, but those materials do not replace legal advice.
AI Assisted Compliance Tools
Manorway Rentals uses AI assisted lease review to flag deposit clauses that exceed the statutory cap. The platform calculates interest accruals for deposits held longer than one year and generates itemized deduction letters that include the language courts expect. You receive automated reminders at day 25 of the 30 day window so you never forfeit your right to withhold.
Small landlords managing 1 to 20 doors benefit most from automated compliance tracking. You avoid double damages, reduce dispute rates, and return deposits on time without manual spreadsheets. Create your free Manorway Rentals account and import your New Hampshire leases today.