North Carolina Residential Lease Agreement

Introduction

This guide provides a comprehensive overview of North Carolina residential lease requirements, including required disclosures, security deposit regulations, rent payment terms, landlord and tenant rights, and eviction procedures. All information has been verified against official North Carolina General Statutes (NCGS) and federal regulations. Citations to specific statutes are provided throughout this document in bracketed numbers ^[1], ^[2], etc., with full references listed in the RESOURCES section at the end of this document.

Required Disclosures

Lead-Based Paint Disclosure

Federal law requires landlords of residential units constructed before 1978 to provide tenants with a Lead-Based Paint Disclosure and EPA pamphlet ("Protect Your Family From Lead in Your Home"). Every tenant mentioned in the lease must sign the disclosure form. ^[1] This requirement applies to most pre-1978 private housing, public housing, federally owned housing, and housing receiving federal assistance.

Landlords must provide all available records and reports about lead-based paint and lead-based paint hazards, and include either as an attachment or as language inserted into the lease a "Lead Warning Statement." Landlords must keep a signed copy of the disclosures for three years after the lease begins. ^[1]

Exemptions: The rule does not apply to housing built after 1977, zero-bedroom units (unless a child under six years of age resides or is expected to reside), leases for 100 days or less, or housing specifically for the elderly or persons with disabilities (unless a child under six resides or is expected to reside). ^[1]

Security Deposit Disclosure

Within 30 days of the start of the lease term, the landlord must provide the tenant with written notice of the name and address of the financial institution where the security deposit is being held, or provide details of the insurance company if the deposit is maintained as a bond. ^[2] This disclosure is mandatory under North Carolina's Tenant Security Deposit Act.

Security Deposits

Maximum Deposit Amounts

North Carolina law limits the amount landlords can charge for security deposits based on the tenancy type: ^[3]

• Week-to-week tenancy: Maximum of two weeks' rent
• Month-to-month tenancy: Maximum of one and one-half months' rent
• Terms greater than month-to-month: Maximum of two months' rent

Storage Requirements

Security deposits must be placed in a trust account with a federally insured depository institution or secured by a bond issued by a North Carolina-licensed insurance company. ^[2] Security deposits from tenants may be held in a trust account outside of North Carolina only if the landlord provides the tenant with an adequate bond in the amount of the deposits. ^[4]

Permitted Uses

Security deposits may be used for damage to the premises (excluding normal wear and tear), including damage to or destruction of smoke alarms or carbon monoxide alarms, and damages resulting from the nonfulfillment of the rental period. ^[4] Security deposits cannot be withheld for conditions due to normal wear and tear, nor may the landlord retain an amount which exceeds actual damages.

Return Timeline and Itemization

The landlord must return the security deposit to the tenant within 30 days after termination of the tenancy and delivery of possession of the premises to the landlord. ^[5] The landlord must provide written itemization of any damage and mail or deliver it to the tenant, together with the balance of the security deposit, no later than this 30-day deadline.

Interest on Deposits

No state law in North Carolina mandates that landlords pay interest on security deposits.

Remedies for Non-Compliance

Upon a finding by the court that the party against whom judgment is rendered was in willful noncompliance with the Tenant Security Deposit Act, such willful noncompliance is against the public policy of North Carolina and the court may award attorney's fees to be taxed as part of the costs of court. ^[6]

Rent Payment Terms

Grace Period

North Carolina state law mandates a 5-day grace period in the event of overdue rent. Landlords cannot impose late fees or begin the eviction process until after this grace period expires. ^[7] A late fee may not be assessed until rent is at least five days late, with the first day being the day after the rent was due.

Late Fees

If rent is not paid by the sixth day after it is due, the landlord may charge a late fee. The maximum late fee amounts are strictly regulated: ^[7]

• For monthly rent: Maximum of $15 or 5% of the monthly rent, whichever is greater
• For weekly rent: Maximum of $4 or 5% of the weekly rent, whichever is greater

A late fee may be imposed only one time for each late rental payment. ^[7] These provisions were last updated by Session Law 2021-71.

NSF (non-Sufficient Funds) Fees

If a tenant pays with a bad check (NSF check), the maximum allowable processing fee that can be charged is $35. ^[8] Under NCGS § 25-3-506, any person who accepts a check in payment for goods or services (including landlords accepting rent checks) may charge and collect a processing fee not to exceed thirty-five dollars for a check on which payment has been refused by the bank because of insufficient funds or because the drawer did not have an account at that bank.

Pet Fees

North Carolina law allows landlords to charge a reasonable, nonrefundable fee for any pets the tenant plans to keep on the premises. ^[9] This pet fee is separate from and in addition to the security deposit limits. Because the pet fee is nonrefundable, it does not have to be returned to the tenant at the end of the tenancy, regardless of whether the pet caused any damage.

Landlord's Right to Enter

There are no statewide laws in North Carolina regarding a landlord's right to enter the property while it is occupied. ^[10] North Carolina does not have a statutory requirement specifying how much notice landlords must give before entering a rental property.

However, landlords must provide reasonable advance notice before entering rental property so as not to disturb the renter's right to "quiet enjoyment" of the property. ^[10] As a general rule, a minimum of 24 hours is considered reasonable notice unless there is a specific reason for a lesser amount. Best practices suggest landlords should provide 24-48 hours written notice when the reason for entry is not urgent, and should enter only during reasonable daytime hours.

Landlords are not allowed to enter frequently enough to infringe upon the tenant's "quiet enjoyment" rights. In emergencies, North Carolina landlords may enter without advance notice when this is reasonable under the circumstances and does not interrupt the renter's quiet enjoyment of the property. ^[10]

Warranty of Habitability

Landlord Obligations

Under North Carolina law, landlords have a statutory duty to provide fit premises. Specifically, landlords must: ^[11]

Comply With Current Applicable Building and Housing Codes

Make All Repairs and Do Whatever Is Necessary to Put and Keep the Premises in a Fit and Habitable Condition

Keep All Common Areas of the Premises in Safe Condition

Maintain in Good and Safe Working Order and Promptly Repair All Electrical, Plumbing, Sanitary, Heating, Ventilating, Air Conditioning, and Other Facilities and Appliances Supplied or Required to Be Supplied by the Landlord

The tenant's obligation to pay rent and the landlord's obligation to comply with these requirements are mutually dependent. ^[11]

Tenant Remedies for Habitability Violations

Unlike many states, North Carolina does NOT allow tenants to unilaterally withhold rent or use repair-and-deduct remedies without court approval. ^[12] A tenant cannot withhold rent in North Carolina without a judge or magistrate order. There is no statute allowing tenants to repair and deduct rent.

Instead, tenants have the following remedies: ^[12]

• Sue for rent abatement: Tenants may file an action in Small Claims Court for a rent rebate or refund. Tenants can ask the judge to order repairs, reduce rent while repairs are being made, and award a retroactive rent cut for the time during which repairs were not made.
• Civil action: Any right or obligation declared by North Carolina landlord-tenant law is enforceable by civil action, in addition to other remedies of law and in equity.
• Constructive eviction: If the repairs needed are severe enough to make it unsafe for the tenant to live in the rental, a court might consider the tenant to be "constructively evicted," meaning that the tenant has the right to move out without further liability for rent.

Protected Tenant Activities

It is North Carolina's public policy to protect tenants who seek to exercise their rights to decent, safe, and sanitary housing. ^[11] This includes making good faith complaints or requests for repairs about conditions the landlord is obligated to repair under the warranty of habitability.

Lease Termination

Notice Requirements for Different Tenancy Types

North Carolina law specifies different notice periods for terminating different types of tenancies: ^[13]

• Week-to-week tenancy: Two days' notice
• Month-to-month tenancy: Seven days' notice
• Year-to-year tenancy: One month or more before the end of the current year of the tenancy

Eviction Procedures

Summary Ejectment Overview

Summary ejectment is the legal term for eviction in North Carolina. ^[14] Residential tenants can only be evicted in accordance with the procedure prescribed in Article 3 or Article 7 of NCGS Chapter 42. Landlords must obtain a court order against the tenant and ask the sheriff to schedule the lockout.

10-Day Notice for Non-Payment of Rent

For non-payment of rent, landlords must serve a 10-Day Demand for Rent, as required by NCGS § 42-3. ^[14] This gives the tenant ten days to pay or vacate. If there is no automatic forfeiture clause in the lease, forfeiture of the lease occurs ten days after a demand for payment is made.

The demand need not be made in any particular form unless the lease specifies a method, and it must be "a clear, unequivocal statement, either oral or written, requiring the lessee to pay all past due rent." ^[14] If the tenant does not pay within the notice period, the landlord can proceed with filing a Summary Ejectment in small claims court.

Court Filing and Service

The landlord can file for summary ejectment 10 days or more after the demand for payment. ^[14] The sheriff should serve the eviction court papers on the tenant at least two days before the eviction hearing.

Property Handling After Eviction

During the seven-day period after execution of a writ of possession, landlords may move property for storage but cannot throw away, dispose of, or sell it. ^[15]

Retaliatory Eviction Protections

Protected Tenant Activities

North Carolina law provides strong protections against retaliatory eviction. Protected tenant activities include: ^[16]

• Making good faith complaints about repairs or conditions that the landlord is obligated to fix
• Exercising rights under a lease or under the law
• Organizing or joining tenant rights organizations

12-Month Protection Period

Tenants may raise retaliatory eviction as an affirmative defense if the landlord's action (such as eviction, rent increase, or decrease in services) occurred within 12 months of protected activities. ^[16] This creates a presumption that the landlord's action was retaliatory.

Prohibited Landlord Actions

Distress and distraint (landlord self-help remedies) are prohibited in North Carolina. ^[15] Landlords only have rights concerning tenant personal property in accordance with specific statutory provisions, and they cannot use illegal self-help methods.