North Carolina Standard Residential Lease Agreement

Introduction

A North Carolina standard residential lease agreement is a fixed-term rental contract between a landlord and tenant for a residential dwelling. The tenant agrees to pay rent on a monthly basis to the landlord in exchange for the right to occupy and use the residential space until the end date specified in the lease. This document establishes the legal relationship between the parties, including the length of the lease (typically one year), the monthly rent amount, security deposit terms, and the responsibilities of each party. A lease agreement becomes legally binding once signed by both the landlord and tenant.

North Carolina residential tenancies are governed by the North Carolina Residential Rental Agreements Act, codified in Chapter 42 of the North Carolina General Statutes. ^[1]

Required Disclosures

North Carolina law requires landlords to provide specific disclosures to tenants before or at the commencement of a residential tenancy:

1. Lead-Based Paint Disclosure

For housing constructed before 1978, landlords must comply with federal lead-based paint disclosure requirements under the Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X). Landlords must: (a) disclose any known information about lead-based paint or lead-based paint hazards in the property; (b) provide tenants with the EPA pamphlet "Protect Your Family From Lead In Your Home"; and (c) include specific lead warning language in the lease agreement. ^[2]

2. Security Deposit Disclosure

Within 30 days after the beginning of the lease term, the landlord must notify the tenant in writing of the name and address of the bank or financial institution where the security deposit is being held, or if the deposit is secured by a bond, the name of the insurance company providing the bond. ^[3]

Security Deposit Laws

Maximum Amount

North Carolina law limits the security deposit based on the type of tenancy:

• Weekly tenancy: Maximum of two (2) weeks' rent
• Month-to-month tenancy: Maximum of one and one-half (1.5) months' rent
• Fixed-term tenancy (greater than month-to-month): Maximum of two (2) months' rent ^[4]

Trust Account or Bond Requirement

Security deposits must be placed in a trust account with a licensed and federally insured depository institution, or a trust institution authorized to do business in North Carolina. Alternatively, the landlord may furnish a bond from an insurance company licensed to do business in North Carolina. Security deposits may be held outside of North Carolina only if the landlord provides an adequate bond in the amount of the deposits. ^[3]

Return of Security Deposit

The landlord must return the security deposit to the tenant within 30 days after the termination of the tenancy and delivery of possession of the premises. If deductions are made, the landlord must provide an itemized statement of damages in writing. If the full extent of damages cannot be determined within 30 days, the landlord must provide an interim accounting within 30 days and a final accounting within 60 days. The landlord may not withhold any portion of the security deposit for normal wear and tear, nor may the landlord retain an amount exceeding actual damages. ^[6]

Rent Payment Laws

Grace Period

North Carolina law provides a mandatory grace period of five (5) calendar days after the rent due date before a landlord may charge late fees. The first day of the grace period is the day after the rent was due. Landlords cannot impose late fees or begin eviction proceedings until after this grace period expires. ^[7]

Maximum Late Fee

For monthly rent payments, the maximum late fee is $15.00 or 5% of the monthly rent, whichever is greater. For weekly rent payments, the maximum late fee is $4.00 or 5% of the weekly rent, whichever is greater. A late fee may be imposed only once for each late rental payment and may not be deducted from a subsequent rental payment in a manner that causes that payment to be considered in default. ^[7]

NSF (Returned Check) Fee

Under North Carolina law, a landlord may charge a processing fee not to exceed $35.00 for a check that is returned due to insufficient funds or because the drawer did not have an account at the bank. ^[8]

Landlord Obligations

Under the North Carolina Residential Rental Agreements Act, landlords have the following legal obligations:

Fit and Habitable Condition

The landlord must make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition. This includes maintaining all common areas in safe condition. ^[9]

Maintenance of Facilities

Landlords must 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, provided that the tenant gives written notification of needed repairs (except in emergency situations). ^[9]

Compliance with Codes

Landlords must comply with all applicable building, housing, health, and safety codes. While many housing regulations are implemented at the local level in North Carolina, state law requires compliance with all applicable local ordinances.

Smoke and Carbon Monoxide Alarms

Landlords must provide operable smoke alarms (battery-operated or electrical) with Underwriters' Laboratories, Inc. listing. If notified in writing by the tenant of needed replacement or repairs, the landlord must replace or repair smoke alarms within 15 days. For new installations or replacements after December 31, 2012, landlords must install tamper-resistant, 10-year lithium battery smoke alarms. Failure to provide or repair smoke or carbon monoxide alarms may result in a fine of up to $250. ^[9]

Tenant Rights

Right to Quiet Enjoyment

Tenants have the right to quiet enjoyment of the rental property. While North Carolina does not have a specific statute requiring landlords to give advance notice before entry, landlords cannot enter in a manner that substantially interferes with the tenant's peaceful use of the property. As a best practice, landlords should provide at least 24 hours' notice before entering the premises, except in emergencies.

Remedies for Landlord Non-Compliance

If a landlord fails to make necessary repairs in a timely manner, tenants may sue for a reduction (abatement) of rent proportionate to the issue. However, North Carolina does not allow tenants to withhold rent or make repairs and deduct the cost without a court order. Tenants should continue paying rent while seeking legal remedies.

Protection Against Illegal Eviction

Landlords cannot force tenants out through self-help measures such as changing locks, turning off utilities, or removing doors or windows. Such actions may constitute constructive eviction, which would justify the tenant breaking the lease without further rent obligation.

Lease Termination

North Carolina law specifies the following notice requirements for terminating a tenancy: ^[10]

The notice period begins the day after the notice is delivered. If notice is mailed, an additional three (3) calendar days should be added to account for delivery time.

Eviction Process (summary Ejectment)

In North Carolina, eviction is legally referred to as "summary ejectment." The process involves several steps: ^[11]

Step 1: Notice to Pay or Quit

For non-payment of rent, after the 5-day grace period expires, the landlord must provide a 10-day written notice demanding payment of overdue rent or requiring the tenant to vacate. If the tenant pays in full within this 10-day period, the eviction cannot proceed.

Step 2: Filing the Complaint

If the tenant does not pay or vacate, the landlord files a "Complaint in Summary Ejectment" with the clerk of court. The filing fee is approximately $96 plus any additional administrative fees.

Step 3: Court Hearing

The court hearing typically occurs approximately 14 days after the summons is issued. The county sheriff serves the tenant with the summons and complaint personally, or by posting on the front door if personal service is not possible.

Step 4: Judgment and Writ of Possession

If the court rules in favor of the landlord, the tenant has 10 days to appeal. If no appeal is filed, the landlord may request a Writ of Possession, which authorizes the sheriff to physically remove the tenant. This process typically takes 5-7 additional days.

Grounds for Eviction

Landlords may pursue eviction for: (a) non-payment of rent; (b) holdover after lease expiration; (c) violation of lease terms that allow for eviction; or (d) criminal activity for which the tenant can be held responsible.

Fair Housing Protections

The North Carolina Fair Housing Act prohibits discrimination in housing based on the following protected classes: ^[12]

• Race - Color - Religion - Sex - National origin - Handicapping condition (physical or mental disability) - Familial status (families with children under 18) - Affordable housing status (income below 80% of area median)

Tenants who believe they have experienced housing discrimination may file a complaint with the North Carolina Human Relations Commission at 919-807-4420 or 866-324-7474.

Essential Lease Provisions

A comprehensive North Carolina residential lease agreement should include the following provisions:

1. Parties: Full legal names of all landlords and tenants

2. Property Description: Complete address and description of the rental premises

3. Lease Term: Start and end dates of the tenancy

4. Rent Amount and Due Date: Monthly rent, payment due date, and acceptable payment methods

5. Security Deposit: Amount, holding institution, and conditions for return

6. Late Fees: Amount and when applied (must comply with statutory limits)

7. Utilities: Which utilities are included and which the tenant must pay

8. Maintenance Responsibilities: Division of repair and maintenance duties

9. Pet Policy: Whether pets are allowed, restrictions, and any pet deposits

10. Lead-Based Paint Disclosure: Required for pre-1978 housing

11. Rules and Regulations: Noise, guests, parking, and other property rules

12. Termination and Renewal: Notice requirements and renewal terms

13. Signatures: Dated signatures of all parties