Most landlords require a security deposit prior to renting out their property. Rightly so, requiring one provides a financial cushion against the myriad of issues that could arise during any tenancy.

For example, security deposits can help a landlord minimize the financial damage they may incur should a tenant breaks their lease.

New Hampshire security deposit law is both comprehensive and specific. So, to help a landlord understand the state’s deposit laws, we at Keyrenter New England have put together this article.

Security Deposit Limits

New Hampshire security deposit law dictates that a landlord cannot collect a security deposit exceeding one months’ rent. So, suppose you charge a monthly rate of $2,000. The maximum-security deposit you can charge is $2,000.

The only exception to this is if you’re renting out a “shared facility.” In this case, a landlord is free to charge whatever amount of security deposit they wish.

Storing Security Deposits

New Hampshire laws do tell landlords how to store any security deposits. Landlords must store their tenant’s security deposit in a separate account.

In other words, the mixing of a tenant’s security deposit and personal funds is prohibited. Additionally, the account must be in a financial institution registered to operate in New Hampshire. It also states that if a deposit is held for more than one year, it must produce interest. The rate of interest must be equal to the interest rate on a savings account in New Hampshire.

Security Deposit Receipt

security deposits and written notice of unpaid rent

A landlord must provide their tenant with a receipt immediately when you receive their security deposits. In the signed receipt, a landlord must state the deposit amount or bond, as well as the location where it is held. The only exception to providing a receipt is if the tenant pays it by a bank check.

Additionally, a landlord must provide their tenants with crucial information about the storage of their security deposits upon request. Such information includes the name and address of the bank, interest rate, account number, and deposit sum.

Common Deductions

State security deposit laws do allow for situations where landlords have the right to make deductions to their tenant’s security deposit. The following are the most common reasons:

Unpaid Rent

New Hampshire rental law states that tenants are bound to pay all the remaining rent under their lease or rental agreement. Even if a tenant breaks the lease agreement midway through the lease period, you have a right to demand all the remaining rent.

But New Hampshire landlord-tenant law requires landlords to use reasonable efforts to re-rent their premises after a tenant breaks their lease.

Damages Exceeding Normal Wear and Tear

Most leases require tenants to leave the rental property in its original condition. If your tenant causes excessive property damage, you may have a right to a portion or all of their deposit.

Examples of excessive property damage may include:

  • Broken toilet seats.
  • Smashed bathroom mirrors.
  • Carpets soaked with pet urine.

Other situations where you may be permitted to make deductions include covering unpaid utilities and excessive cleaning costs.

Walk Through Inspections

Walk-through inspections are not required in the state, but they help with documenting a rental property’s condition prior to a tenant moving out.

They also provide time for the tenant to fix any damages they may have caused during their tenancy. If the tenant makes all the necessary repairs and meets other requirements, the landlord will have to return their deposits in whole.

But if they leave without carrying out the fixes, a landlord has the right to withhold some or all the security deposit to fix the damages.

Selling Your Property

monthly rental payment for rental unit

If the property changes hands during an active tenancy, a landlord only has one option: transfer all your tenants’ security deposits to the incoming landlord.

State deposit laws also state that a landlord must send their tenants a certified mailing alerting them of the change, along with the incoming landlord’s name and contact information.

Returning the Deposit

A landlord in the state has 30 days to return a security deposit to a tenant, along with any accrued interest once your tenant moves out. Landlords must mail the balance to their tenant’s last known address using registered or certified mail.

Should there be deductions to the security deposit, then a landlord must provide their tenant with an itemized list of those deductions.

Additionally, the list of deductions must state the reason for the deduction, amounts of deductions, and any repair estimates or other proof.

Wrongfully withholding a tenant’s security deposit can have legal and financial ramifications. According to New Hampshire security deposit laws, a tenant can be awarded up to twice the amount wrongfully withheld, in addition to reasonable attorney fees and court costs.

If you have questions regarding returning a security deposit, it is a good idea to consult a legal professional or experienced property management company such as ourselves at Keyrenter.


Certain types of landlords are exempt from the New Hampshire security deposit laws.

For example, a landlord who lives in owner-occupied properties, with at most five units. In this case, New Hampshire landlords will still have to abide by the laws for any unit with a tenant aged over 60 years.

Unclaimed Deposits

new hampshire's security deposit law in lease agreement

Tenants have up to six months upon the termination of their lease to claim the return of their security deposit if they don’t provide a forwarding address. But if a tenant doesn’t claim the funds within that time, the deposit becomes the property of the New Hampshire landlord.

Bottom Line

Whether it’s knowing how much to charge or how to use it lawfully, a landlord may need help to get the most out of the deposit laws. You should also make sure to stay informed of other landlord-tenant laws, rent increase laws, and the legal eviction process in New Hampshire

Don’t hesitate to contact us at Keyrenter New England if you need help managing your rentals. We would be more than happy to give you more information about our services!

Disclaimer: This blog isn’t a substitute for professional legal advice. Laws frequently change and this post may not be updated at the time you read it. Please get in touch with us if you need help regarding this content or any other aspect of property management.