North Carolina Residential Lease Agreement

Important Information for North Carolina Landlords

North Carolina Rental Law Highlights

Security Deposits (N.C.G.S. § 42-50 to 42-56)

• Maximum Amount – Month-to-Month: 1.5 months rent
• Maximum Amount – Week-to-Week: 2 weeks rent
• No Maximum – Fixed Term: No limit for fixed-term leases over one year
• Pet Deposits: Can charge reasonable, nonrefundable pet fee separate from security deposit
• Return Timeline: 30 days after termination to return deposit
• Itemized Statement Required: Must provide itemized list of deductions
• Forwarding Address: Tenant must provide in writing within 30 days
• Trust Account: Must be held in trust account in NC institution (6+ units) or post bond
• Penalties: Willful failure to return may result in damages plus attorney fees
• Normal Wear and Tear: Cannot deduct for ordinary wear and tear

Rent and Rent Increases

• No Rent Control: North Carolina prohibits rent control
• No Notice Required: For fixed-term lease expiration
• Month-to-Month: 7 days notice for rent changes (either party)
• Week-to-Week: 2 days notice for changes
• Late Fees: Maximum $15 or 5% of rent (whichever is greater)
• Late Fee Grace Period: Can only charge after 5-day grace period
• NSF Fee: Maximum $25 for returned check

Required Disclosures (N.C.G.S. § 42-42)

• Lead-based paint disclosure (pre-1978 properties) – Federal requirement
• Landlord or authorized agent name and address (must be in NC)
• Security deposit trust account information (6+ units)
• Shared utility arrangements disclosure
• Smoke detector and carbon monoxide detector information
• Landlord’s in-state registered agent (if landlord out of state)
• Move-in condition report (recommended)
• Mold disclosure (if known)

Eviction and Termination (N.C.G.S. § 42-26, 42-30)

• 10-Day Notice: For nonpayment of rent (tenant has right to cure)
• 7-Day Notice: For month-to-month termination (either party)
• 2-Day Notice: For week-to-week termination
• Summary Ejectment: Court process required for eviction
• No Self-Help: Lockouts and utility shutoffs are illegal
• Written Notice Required: All termination notices must be in writing

Landlord Obligations (N.C.G.S. § 42-42)

• Habitability: Must maintain premises in fit and habitable condition
• Essential Services: Running water, hot water, heating, electricity
• Building Codes: Must comply with applicable codes
• Structural Soundness: Roof, walls, floors in good repair
• Smoke/CO Detectors: Must install and maintain working detectors
• Common Areas: Must keep safe and clean
• Pest Control: Generally landlord responsibility
• Repairs: Must make necessary repairs within reasonable time

Entry Requirements

• No Specific Statute: NC law doesn’t specify exact notice requirements
• Best Practice: 24 hours advance notice recommended
• Reasonable Times: Entry should be at reasonable times
• Emergency Exception: Can enter without notice in emergency
• Lease Provisions: Should specify entry terms in lease

Tenant Rights and Protections

• Repair Rights: Can withhold rent or make repairs after proper notice
• Retaliation Protection: 12 months protection after complaint
• Privacy Rights: Should give reasonable notice for entry
• Domestic Violence Protection: Early termination rights for victims
• Military Service: SCRA protections for active duty members

Pet Policies

• Pet Deposits: Can charge reasonable, nonrefundable pet fee
• Pet Fee Separate: Not included in security deposit maximum
• Pet Rent: Can charge monthly pet rent
• Service Animals: Must allow under Fair Housing Act; no fees permitted
• Assistance Animals: Must accommodate with proper documentation
• Breed Restrictions: Generally allowed

North Carolina-Specific Considerations

Security Deposit Trust Account (N.C.G.S. § 42-50)

• 6+ units: Must hold in trust account OR post bond
• Trust account must be in NC banking institution
• Must disclose bank name and address to tenant
• Or post bond equal to total deposits
• 5 or fewer units: No trust account requirement

Late Fees and NSF Fees (N.C.G.S. § 42-46)

• Late fee: Maximum $15 or 5% of rent (whichever greater)
• Can only charge after 5-day grace period
• NSF fee: Maximum $25 per occurrence
• Must be specified in lease
• Fees must be reasonable

Move-In/Move-Out Inspection

• Not required by law but highly recommended
• Use detailed checklist documenting condition
• Take photos/videos at move-in and move-out
• Both parties should sign inspection report
• Protects both landlord and tenant in disputes

Climate Considerations

• Hot, humid summers: AC maintenance important
• Specify who is responsible for AC repairs
• Include provision for AC filter changes (typically tenant)
• Address pest control (common in NC climate)
• Lawn care responsibilities in lease
• Hurricane preparedness provisions (coastal areas)

Smoke and Carbon Monoxide Detectors (N.C.G.S. § 42-42)

• Landlord must provide working smoke detectors
• Required in sleeping areas and on each level
• Carbon monoxide detectors required if fossil fuel appliances
• Landlord installs and provides initial batteries
• Tenant responsible for maintaining and replacing batteries
• Tenant cannot disable or remove detectors

Domestic Violence Protections (N.C.G.S. § 42-45.1)

• Victims can terminate lease with 30 days notice
• Must provide documentation (protective order, police report, etc.)
• Must pay rent through end of notice period
• Landlord can sue for unpaid rent but not future rent

Fair Housing Requirements

Best Practices for North Carolina Landlords

• Use written leases for all tenancies
• Conduct thorough move-in/move-out inspections with photos
• Provide all required disclosures before tenant signs
• Hold deposits in trust account if 6+ units OR post bond
• Comply with 30-day security deposit return timeline
• Provide itemized list of deductions
• Honor 5-day grace period before late fees
• Limit late fees to $15 or 5% (whichever greater)
• Give reasonable notice before entry (24 hours recommended)
• Respond promptly to repair requests
• Keep detailed records of all transactions
• Address climate-specific issues (AC, pest control, lawn care)
• Never use self-help eviction methods
• Follow proper summary ejectment procedures
• Consider landlord insurance
• Join NC Apartment Association or local landlord groups

Abandoned Property (N.C.G.S. § 42-25.9)

• Property presumed abandoned under certain conditions
• Must store abandoned personal property
• Must notify tenant at last known address
• Can dispose after holding period expires
• Proceeds apply toward unpaid rent/damages

Landlord’s Lien (N.C.G.S. § 42-15)

• North Carolina allows landlord’s lien on tenant’s property
• Can secure unpaid rent
• Must follow legal procedures
• Rarely used due to complexity

Mold Issues

• No specific NC mold statute
• Falls under general habitability requirements
• Landlord should address moisture problems promptly
• Tenant should report water intrusion immediately
• Include mold prevention clause in lease (recommended)

Shared Utility Billing (N.C.G.S. § 62-110)

• If utilities not individually metered, must disclose
• Must provide reasonable method for allocation
• Cannot charge more than actual cost
• Must disclose billing method in lease

Hurricanes and Natural Disasters (Coastal Areas)

• Address hurricane preparation responsibilities
• Specify who boards windows, secures property
• Include provisions for evacuation orders
• Address insurance requirements
• Flood zone disclosure (if applicable)

Resources

• North Carolina General Statutes (N.C.G.S.) – Chapter 42 (Landlord-Tenant)
• N.C.G.S. § 42-50 to 42-56 (Security Deposits)
• N.C.G.S. § 42-42 (Landlord Obligations and Disclosures)
• N.C.G.S. § 42-46 (Late Fees and NSF Fees)
• NC Department of Justice – Landlord-Tenant Resources
• NC Apartment Association
• NC Bar Association – Real Property Section
• Local legal aid societies