This article is designed to give new and experienced investors a brief overview of basic North Carolina landlord-tenant law. The author is not an attorney and is not giving legal advice. You should consult your own attorney and do your own research for laws that are applicable in your own state and county.
Below are 6 things you must know about being a landlord in North Carolina:
#1. Residential Rental Agreements Act
Enacted in the 1970’s with the main purpose to require landlords to rent only “habitable” residential rental units to tenants. All jurisdictions in the U.S. have adopted some form of this requirement of habitability. This act does not apply to dwellings such as hotels, commercial, industrial, or vacation rentals. It also does not apply to dwellings which are furnished without the charge of rent. The most important concept to take from the term habitability as it applies to the property is that:
- Must be safe
- Able to be occupied in reasonable comfort
The unit must comply with current and applicable housing code, so it’s a good idea to read the minimum housing code for your local area.
The following systems must be maintained in good and safe working order: plumbing, heating, electrical, sanitary, air-conditioning, and ventilating systems. This includes any and all appliances supplied by the landlord. All repair requests, emergencies excluded, need to be given to the landlord in writing.
An important feature here is that the tenant cannot waive their rights to this statute. I had known a landlord in the mid-2000’s that put a clause in his leases saying that the tenant would be responsible for the first $50 in repairs. The landlord is obligated to make such repairs to keep the premises in safe and habitable condition. The tenant cannot contractually absolve the landlord of this responsibility. The landlord can hire the tenant to do repairs as long as they are compensated.
#2. Smoke Detectors
The landlord must provide working smoke detectors at the beginning of the tenancy. The tenant is responsible for replacing the batteries as needed during the tenancy. A change came about in December of 2012 requiring that when a new smoke alarm is installed, or an existing one is being replaced, it contain a 10-year lithium battery be installed.
To be honest, I have yet to have a tenant actually replace the batteries in a smoke alarm. The smoke detector with a 10 year battery gives me one less thing to worry about.
#3. What Is The Tenant Responsible For?
The tenant is responsible for keeping the premises safe and clean. All trash needs to be disposed of regularly. They cannot deliberately or negligently destroy or deface the premises, and they are responsible for all damages other than that caused by ordinary wear and tear. The tenant is required to notify the landlord in writing of the need for repairs.
#4. Act Prohibiting Retaliatory Eviction
The landlord can’t evict a tenant because they don’t like them. They also cannot evict for any of the following reasons:
- Complaining to a government agency
- Requesting repairs
- Exercising legal rights under the lease
- Exercising rights under federal or state law
- Becoming involved in tenants’ rights organizations
#5. Tenant Security Deposit Act
This act applies to anyone renting and managing a residential dwelling. This does not apply to renting a single room. The biggest item here is that all deposits must be placed in a trust account with an insured North Carolina bank. A security deposit cannot be placed in a personal or business account..it MUST be deposited into a trust account. Also, the tenant must be notified of the place of the account within 30 days of receiving it.
Permitted uses of Security Deposits according to G.S. 42-51:
- Non-payment of rent
- Damages to the premises (other than ordinary wear and tear)
- Non-fulfillment of the rental period
- Unpaid bills from the tenant’s occupancy that become a lien against the property
- Cost of removal & storage of tenant’s property
- Court costs associated with terminating a tenancy
#6. Self-Help Eviction Prohibited
This prohibits landlords from removing tenants from a residential dwelling outside of the summary statutory procedure. This includes, but is not limited to, changing the locks, removing the front door, refusing to make repairs, and posting false legal notices on the door ordering the tenant to leave.
The General Statute that governs landlord tenant law is lengthy and technical. However, being a landlord is a large responsibility and will pay dividends if you stick with it long term.
I would recommend that everyone who own rental property in North Carolina takes the time to read the statute above, just so you become familiar with it. I would recommend that all landlords in North Carolina read this statute: http://www.ncleg.net/gascripts/Statutes/StatutesTOC.pl?Chapter=0042
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