December 15, 2004 

                                                                     SECURITY DEPOSIT WAIVER FEES

 QUESTION:  Is it permissible to charge a waiver fee AND a security deposit so long as the guest is given an option such as:

1.         Security deposit of $1000.00

2.         Security deposit of $200.00 PLUS waiver fee of $35.00

 Many persons have posed the question as to whether a security deposit AND “peace of mind” security deposit waiver fees may be charged to the same guest on the same reservation.  My understanding (confirmed by the NCREC) is that you may charge the waiver fee OR the security deposit but not both.

 

The North Carolina Attorney General’s advisory letter to the North Carolina Real Estate Commission outlined an acceptable means of collecting the waiver fee INSTEAD of a tenant security deposit.  For those of you wishing to charge both, you would have to have a formal request, detailing an exact proposal and then we could go back to the AG for an opinion.  Of course, the TSD to be charged would have to be legal under all the circumstances (the amounts are determined by the length of the tenancy).  Security deposits are governed by the 1977 Tenant Security Deposit Act (N.C. Gen. Stat. §§ 42-50 to 56). Under this Act, if the lease is month-to-month, the security deposit cannot exceed one and one half months' rent, and if the lease is longer than month-to-month, the security deposit is limited to two months' rent. (If the lease is week-to-week, the security deposit is limited to two weeks' rent.)