You would sue her in New York, and have the suit served on her in North Carolina by a process server there.
This answer should not be construed as creating an attorney-client relationship, and is for informational purposes only.
sue in the county where the property is located.
BTW, can't use SD for rent--see a lawyer before you take LL to court.
READ THIS BEFORE CALLING OR EMAILING ME: I am licensed to practice before the state and federal courts in Virginia. We have not established an attorney-client relationship unless we have a signed representation agreement and you have paid me. I give a 100% effort to get you on the right track with your issue. Sometimes that means legal educational information, sometimes that means counseling and non-legal guidance. You should speak with an attorney to whom you have provided all the facts, before you take steps that may impact your legal rights. I am not obligated to answer subsequent emails or phone calls unless you have hired me. I wish you the best of luck with your situation.
You can sue in NY because the person is doing business here but you may not be able to sue in small claims court if she does not live or work in the County. You may have to go to District or County Court (whatever they call it in your area). Security deposits are not for rent - they are to secure against damage.
I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases. Feel free to check out my web site and contact me at (212) 385-8015 or via email at Eric@RothsteinLawNY.com. The above answer is for informational purposes only and not meant as legal advice.
If the property is in New York, the LL would subject to New York courts. What address is on the lease for notices? That's where you server her. Or you could serve her attorney.