State Rules and Regulations for North Carolina Rental Properties and Landlords

The vast majority of landlord-tenant and rental laws are handled at the state level. Those who own property in multiple states or renters who have recently moved to a new state should familiarize themselves with the laws of the state in which they either own property or are currently residing. These laws outline the means by which conflicts are resolved and outline the procedures for remedying issues that occur between landlords and tenants.

In addition to state laws, landlords and tenants may also find rental laws at the city, county, and federal levels. We will consider the federal laws first.

Federal Anti-Discrimination Laws

The housing laws at the federal level can be found in two pieces of legislation: The Fair Housing Act and the Americans with Disabilities Act. This legislation makes it unlawful to discriminate against individuals with specific characteristics. These characteristics include:

Race/color,
Creed/religion,
Nation of origin,
Sex/gender,
Familial status,
Disability.

These laws make it unlawful to:

Deny a rental application,
Claim an apartment is rented when it is not,
Limit access to services,
Place discriminatory language in an advertisement,
Segregate tenants based on a protected characteristic,
Refuse to rent or charging a security deposit based on the presence of small children,
Refuse to make reasonable accommodations for a disabled person

Additionally, landlords must not charge a security deposit based on the presence of a certified service animal. No-pets policies likewise do not apply to service animals and must be waived under federal law. Service animals are not considered pets and part of making reasonable accommodations, so a disabled person would be to allow them to have the animal despite a no-pets policy.

North Carolina Fair Housing Laws

North Carolina adopts federal standards when it comes to fair housing. There are additional regulations governing affordable housing in the state. Individual municipalities (cities and counties) may extend protections to LGBTQ individuals and those with prior or current military status, and restrict discrimination based on method of payment. Landlords should be aware of the individual restrictions in the counties and cities in which they operate.

To avoid the appearance of discrimination in any way, landlords are advised to accept the first qualified candidate they receive. It is still legal to deny a rental application based on poor credit and inability to pay, but restricting your method of acceptance to financial information avoids potential legal conflicts.

Exemptions to Fair Housing Laws

Federal and state law permits allows owner-occupied buildings with four or fewer residences to bypass anti-discrimination laws.

North Carolina Rent Laws

Landlord-Tenant: N.C. General Statute §§ 42
NC Fair Housing Act: N.C. General Statute §§ 41A

North Carolina Security Deposit Statutes

North Carolina permits landlords to charge tenants security deposits to ensure that the property is kept in good repair. The landlord is obliged to use the money in the security deposit toward the upkeep of the apartment or rental unit (NCGS § 42-51). There are further requirements on where the security deposit must be kept and when it is to be returned.

Landlords are required to hold the security deposit in a trust account with a licensed and insured bank. After the lease term begins, the landlord has 30 days to inform the tenant of the name and address of the institution holding the security deposit (NCGS § 42-50).

There are restrictions on how much a landlord can charge depending on the length and time of the tenancy. For leases with greater than one-month terms, landlords are allowed to charge a maximum of two month’s rent. Month-to-month cannot exceed one and a half month’s rent. While week-to-week leases cannot exceed two week’s rent (NCGS § 42-51).

If the landlord wishes to withhold some or all of the security deposit from the tenant, he or she must present the tenant with an itemized list of damages (NCGS § 42-52).

If the landlord fails to abide by any of these requirements, he or she may lose all claim over the security deposit and, if the tenant needs to sue to recover the deposit, the landlord may be on the hook for their legal fees as well.

Lease Agreements and Fees in North Carolina

By and large, the majority of lease agreements and fees can be agreed to by both parties in the lease contract. Landlords are required by law to give tenants a five-day grace period concerning the payment of rent. In other words, rent is allowed to be five days late before the landlord can begin initiating an eviction or charging late fees (NCGS § 42-46(a)). Late fees are allowed to be charged in the amount of either $15.00 or 5% of the monthly rent. Landlords can also charge a $25.00 fee for bounced checks (NCGS § 25-3-506).

Landlord Obligations in North Carolina

Landlords are expected to keep the premises in fit and habitable condition (NCGS § 42-42). This is known as the implied warranty of habitability. When tenants rent an apartment from a landlord, they are doing so under the auspice that the apartment has specific features. The landlord must ensure these features are present. They include:

Compliance with all building codes;
Repair of any damage to maintain a fit and habitable condition;
Keeping common areas safe and clean;
Promptly repairing electricity, plumbing, water, heat, air conditioning, ventilation, and providing access to garbage disposal; and
Operable smoke and carbon monoxide detectors.

Any of these may trigger a violation of the warranty of habitability:

Unsafe wiring,
Lack of potable water,
Bad roofs and lack of protection from the elements,
Unsafe chimneys,
Lack of potable water,
Lack of working locks on doors,
Broken windows or lack of locks on windows,
Lack of heating facilities capable of bringing the temperature to 65℉,
Lack of a working toilet,
Lack of bath or shower,
Rat or mouse infestations, and
Flooding problems and standing water caused by plumbing or sewage leaks.

Renter’s Duties Under North Carolina Law

The renter has a duty to maintain the dwelling unit in safe and sanitary condition throughout the term of the lease (§ 42-43). This includes disposing of garbage in a safe and clean manner. The tenant has a duty to avoid the negligent destruction of the landlord’s property and to inform the landlord when there is a problem with the rental unit. Tenants cannot render smoke or carbon monoxide detectors inoperable.

Tenants cannot withhold rent for breaching the lease except by the order of a civil magistrate.

Eviction and Involuntary Termination of Leases in North Carolina

If a landlord wants to remove a tenant from the premises, he or she must follow specific rules. That being said, North Carolina’s laws are very landlord-friendly. If the tenant is late with rent, the landlord can issue a 10-day notice to either pay the delinquent balance or quit the lease. The demand must be made in writing (§ 42-3).

There are certain instances in which a lease can be terminated immediately. These may include when the tenant commits a material breach of the lease or damages and destroys the landlord’s property. It may also include instances where the tenant creates unsafe conditions for other tenants or otherwise impacts the quiet enjoyment of their rental units (§ 42-26).

Landlords may not retaliate against tenants for filing complaints against them, joining a tenant’s union, or otherwise asserting their own rights. Landlords may not engage in “self-help” evictions by locking the tenants out of the property or shutting off the utilities. These would be violations of North Carolina law and subject the landlord to civil penalties.

Voluntary Termination of Leases in North Carolina

Either party may terminate year-to-year lease on one month’s notice, a month-to-month lease on seven day’s notice, or a week-to-week lease on two day’s notice (NCGS § 42-14).

Notice of Entry in North Carolina

There is no statute regarding notice of entry by a landlord into a tenant’s apartment. It is generally assumed that all landlords should give their tenants at least 24 hours notice before entering the premises.

Domestic Violence Situations

Tenants may be allowed to break the lease early if they are the victim of domestic violence, stalking, or sexual assault (NCGS § 42-45.1). Landlords are entitled to ask for proof of status, which generally requires a police report. Additionally, landlords are prohibited from terminating a tenancy, failing to renew a tenancy, or otherwise punishing a tenant based on their status as a domestic violence survivor (NCGS § 42-42.2).

Disclosures

Landlords are required to disclose all known paint hazards on the premises. This information pamphlet is helpful.

North Carolina Courts and Related Information

North Carolina has limits of $10,000 in small claims court and eviction proceedings are allowed in small claims court.

Helpful Links

These resources are for informational purposes only and should not be construed as legal advice. Landlords and Tenants are encouraged to seek specific legal advice for any of the issues as found in this blog.