Overview of Landlord-Tenant Laws in North Carolina

Key Takeaways:

• Landlords must provide safe, habitable housing and follow legal requirements for maintenance, deposits, and evictions.
• Tenants have protected rights but are responsible for paying rent, maintaining the property, and following lease terms.
• North Carolina law regulates security deposits and late fees, including limits on amounts and when fees can be charged.
• Evictions require valid legal grounds and proper notice, with protections available to tenants against unlawful actions.

North Carolina General Statutes, Chapter 42, governs every landlord tenant relationship in the state of North Carolina (NC). This set of statutes dictates what both the landlord and their tenant need to do to stay out of court.

North Carolina's rental laws are an important part of protecting the investment property, preventing domestic violence, saving money on legal costs, like legal representation, time spent in court, and more. In this way, the law affects landlords as well as tenants.

A lease or rental agreement in the state of North Carolina automatically terminates if either party fails to perform their responsibilities. Violations of a rental or lease agreement often have legal and financial repercussions for a landlord and their tenants, with the potential of winding up in front of a judge in small claims court, and other unfortunate circumstances.

This, however, can be prevented if both landlords and tenants understand the basics of North Carolina landlord tenant laws.

Here’s an overview of the North Carolina landlord-tenant laws.

According to the North Carolina law, the following are important legal responsibilities an obligations of North Carolina landlords:

1. Prepare a Lease or Rental Agreement

Every contract guides the legal landlord-tenant relationship. According to North Carolina statutes, you the owner are responsible for including all crucial business details in your rental contracts. For example, you must include the amount of rent, pet and security deposits, and how long the occupant can occupy the property.

2. Provide Habitable Housing

It's the legal responsibility of owners to keep their rental habitable, and if you fail to do so, it can cause legal trouble and possibly an appearance in court before a judge.

Failure to do so allows the occupant to pursue various options such as moving out. A renter has a legal right to live in well-maintained rental properties where they are free from domestic violence. Thus, as owner, you are responsible for providing these. Repairs and maintenance are obligations the landlord must adhere to, or else they risk time spent on trial

3. Adhere to North Carolina's Security Deposit Limits and Return Rules

One of the biggest sources of legal dispute between a renter and their property owner is the security deposit, especially deductions. N.C. General Statute 42-51 covers their handling This includes surety bonds collection and returns with rental contracts.

4. Follow North Carolina Rental Rules

All North Carolina landlords need to follow the rules. Failure to do so leaves Landlords legally responsible. Landlord-tenant law regulates several issues, such as the amount of notice landlords must give an occupant who hasn't paid rent. Rental contracts must adhere to North Carolina housing legislation.

5. Make Legally Required Lead-Based Paint Disclosures

North Carolina landlords may face hefty financial penalties and possibly a trial before a judge for failure to comply with required federal disclosures regarding lead-based paint on the premises.

6. Not to Retaliate Against an Occupant who Exercises a Legal Right

Per North Carolina statutes, it's illegal for a landlord to retaliate against occupants who wish to exercise their legal right. A good judge will not look favorably on retaliatory action and it may prove difficult to find an attorney willing to provide legal aid to landlords who retaliate unlawfully.

Renters Responsibilities in North Carolina

It's every occupant's responsibility to:

• Not negligently or deliberately damage, deface, destroy, or remove any part of the rented premises or withhold rent.
• Keep the premises clean.
• Dispose of waste in a clean and safe manner.
• Comply with North Carolina building and housing codes.
• Notify the landlord of any repairs needed.

Property owners must disclose the following information to each occupant in their rental agreement:

• Late fees. If occupants fail to pay rent, a fee may be imposed. For weekly rent payments, the maximum fee is four dollars or five percent of the weekly amount. For monthly rent payments, the maximum fee is fifteen dollars or five percent of the rent. In North Carolina, landlords can only charge fees if the rental payment is late five days or more. Landlords should be sure to include late payment fee information in their rental agreement.
• Domestic violence. So long as a 30 days' written notice is provided, victims can avail of early termination.
• Marijuana use policy. North Caolina law permits the use of medicinal marijuana. However, it's illegal to cultivate it.
• Dishonored payment fees. Each dishonored payment attracts a maximum fee of twenty-five dollars
• Shared utility arrangements.
• Mold disclosure. The landlord is required to disclose (and make repairs to, if possible) any structural damage in their property to their occupant, including but not limited to smoke, fire, water, mold, and insect damage.

Both the North Carolina Fair Housing Act and The Federal Fair Housing Act cover every tenant in the state of North Carolina and are aimed at eliminating housing discrimination and domestic violence.

Theses two acts prohibit landlords from discriminating against tenants. Like retaliatory action, discriminatory action does not hold up in trial and can bury a landlords in fines, legal fees, and damage to their social credibility.

Under the Fair Housing Act, it would be illegal to do any of the following:

• Use discriminatory statements in an advertisement.
• Alter contract terms or deposit amounts based on protected characteristics.
• Refuse to sell or rent to someone because they belong to a certain class.
• Falsely state that a rental unit isn't available after discovering that a member belongs to a certain class.
• Decline to make accommodations within reason to disabled persons, which constitutes housing discrimination.

It would be judged unfair if the landlord does the above things because of an occupant's religion, sex, color, national origin, familial status, disability, or race.

Infractions against the FHA are "easy wins," for any given attorney, and can lead to large fines, appearance before a judge, and lost social credibility on the part of the landlord. Social credibility is difficult to make repairs to, and can lead to high turnover rates and long vacancies.

North Carolina Rental Agreements Laws

A lease agreement covers important details like:

• The rental amount, when it's to be paid and how paying rent will work. For example, a landlord may have an occupant pay one months rent or two weeks rent at a time depending on the landlords preference and the terms of their rental agreement.
• The term of the tenancy. The term of the tenancy for the property can either be week-to-week, month-to-month or fixed-term.
• Limits on occupancy. A lease agreement specifies who can live in the rental. Any other person not included in the agreement would be considered subletting.
• Names of all occupants.
• Security and pet deposit and fees, and how each will be handled.
• Restrictions on occupant illegal activity.
• Landlord's entry to the rental unit.
• Repair policy and regulations.
• The basis for lease termination.

NC General Statute 42-51 covers the handling of a renter's security deposit. Per state laws, these help cover costs associated with nonpayment of rent and repairs that are beyond normal wear and tear.

It's important to handle this money properly to avoid winding up in small claims court, which can mean dealing with trial costs and legal representation/assistance related to security deposit issues. Small claims court deals with disputes of value up to $10,000.

• The security deposits cannot exceed two weeks' worth of rent for week-to-week written rental agreements.
• The security deposits cannot exceed one and a half month for a month-to-month lease agreement.
• For a lease agreement exceeding one month, the security deposit cannot exceed two month's rent amount.

Non-refundable pet deposits are allowed. However, NC General Statute 42-53 specifies that the amount asked must be within reason. There's no North Carolina statute requiring landlords to pay interest on the occupant's security deposit.

  North Carolina Termination and Eviction Process Rules

he termination of a rental agreement is specified by North Carolina landlord tenant laws. NC law states that a landlord may end a tenancy as a result of a tenant's violation of a lease term.

For example, a landlord could evict a tenant if they withhold rent without reason. In so doing, the landlord must follow the due legal process, provide written notice, and may need to take the action to trial. Otherwise, the process may fail.

Landlords can legally begin eviction proceedings on a tenant for legitimate reasons such as:

• Unpaid rent. This is the most common reason for evicting a tenant. However, if you evict based on this reason, the action can be overlooked if the landlord fails to provide habitable dwelling.
• Illegal activity on the investment property.
• Property damage beyond reasonable repairs, or the tenant refusing to make reasonable repairs.
• Lease violation. For example, unapproved subletting, unauthorized pets, and unapproved occupants in the rental property.
• Expiration of lease agreement.

North Carolina Law for Landlords and Tenants

Before filing a lawsuit to evict, landlords need to serve their occupant with an eviction notice. The landlord must have a legal reason to remove their occupant. For example, the occupant's failure to make rental payment, or violation(s) of the written lease.

The notice must state when the tenant should vacate the premises. It should also be personally served to the tenant.

In North Carolina, the notice served is dependent on the reason for eviction:

• Lease Violations: The notice a landlord must give their tenants depends on the contract terms. If the lease contains a provision to remedy the violation, the tenant must act in compliance or face repossession of property. On the other hand, if the lease doesn't contain such a provision, the landlord can file to evict as soon as they learn of the violation.
• Holdover Tenant: This notice is served to tenants who refuse to move out at the end of their term. The notice is dependent on the lease's length. A one month's notice should be served for a year-to-year agreement. Seven days' notice should be served for a month-to-month agreements. And finally, two days' notice should be served for a week-to-week agreement.
• Non-payment of Rent: The landlord needs to serve the tenant a 10 days' notice. If the tenant fails to pay the money owed within the 10 days, it allows the landlord to file an eviction lawsuit against them.If a tenant chooses to withhold rent payments, they are at risk of being removed.
• Criminal Activities: Here, the landlord can serve an “Unconditional Quit Notice” to their tenants. This means that the tenant doesn't have any other option but to leave. The landlord can file for a lawsuit immediately.

NC tenant law provides protection for occupants facing an eviction. The following are the most common defenses and counterclaims tenants use in court to win eviction cases in NC:

• The landlord does not serve the notice properly.
• The allegations are false.
• If, for criminal activity, the tenant had no knowledge of the activity. Or, made efforts within reason to prevent it from happening.
• The action is based on discrimination.
• The action is in retaliation against a tenant exercising their rights under the agreement.
• By accepting rent, the landlord waived the action.
• The notice was irrelevant.
• The lease violations aren't significant enough to merit legal action.

Late rental payment issues are regulated by state law. In North Carolina, the lease stipulates key rent rules.

Some of these include:

• The price of rental payments.
• When to pay.
• Where to pay.
• How to pay.
• The consequences of late payment.
• The amount of extra fees should a rent check bounce.
• The amount of notice one must provide to increase rent.

Landlords may charge a late fee if renters don't pay rent when it's due. Under North Carolina rental property regulations,a late fee can't be imposed until the rent is five days late. The fee can't also be higher than five percent of the rental payment.

North Carolina Notice and Entry Rules

Property owners in North Carolina don't have to notify their residents of entry prior to entering the rental property of North Carolina renters.

Thus, you may enter the homes of residents for any of the following reasons:

• Showing the unit to any prospective renter.
• Emergencies.
• Non-emergency maintenance and repairs.

Although it isn't a legal requirement in North Carolina state laws, it's good practice to still provide a 24 hours' notice.

The Bottom Line: North Carolina Landlord Tenant Law

This article can guide both landlords and tenants in North Carolina, to help them deal with many legal questions and potential legal problems without requiring a lawyer. That being said, this article is meant to be informational and not a substitute for professional legal advice.

For more in-depth answers to legal queries, contact a lawyer.

If you're a North Carolina landlord and you require more advice on housing regulation in North Carolina, how to evict a tenant, or other statutes, visit our home page and our professional property managers will be delighted to help.

DISCLAIMER: The information provided by Dawson Property Management in this blog article is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site. If you wish to seek legal advice, you will need to contact an attorney or lawyer.