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North Carolina

A North Carolina residential lease agreement is a legally binding contract between a landlord and a tenant that outlines the terms and conditions for renting a residential property. This agreement typically covers aspects such as rent payment, security deposits, and the rights and responsibilities of both parties.

Rental Application

A rental application is a form used by landlords to screen potential tenants. This document helps landlords assess a tenant’s credit and financial history before entering into a lease agreement.

Required Disclosures

Landlords in North Carolina must include specific disclosures in residential lease agreements:

  1. Lead-Based Paint Disclosure: Required for properties built before 1978, this disclosure informs tenants that the property may contain lead-based paint.
  2. Security Deposit Receipt: Landlords must disclose the name of the bank and account where the security deposit is held.

Security Deposit Laws

  • Maximum Amount:

    • For fixed-term tenancies, the maximum security deposit is two months’ rent.
    • For month-to-month tenancies, the maximum is one and a half months’ rent.

  • Trust Account or Bond: 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 insurance company.

  • Returning: Landlords are required to return the security deposit to the tenant within 30 days of the end of the tenancy. If any deductions are made, an itemized list of damages must be provided to the tenant.

Rent Payment Laws

  • Grace Period: Tenants are granted a five-day grace period for rent payments.

  • Maximum Late Fee: The late fee is capped at $15 or 5% of the monthly rent, whichever is greater.

  • NSF Fee: A fee of $35 is charged for non-sufficient funds (NSF) checks.

Late Fee Disclosure

All leases that impose late fees must clearly state the amount of the fee and the timeline for charging it. For monthly rent, late fees can only be assessed if payment is more than five days late.

Security Deposit Holding Disclosure

Landlords must provide tenants with the name and address of the bank or institution where the security deposit is held within 30 days after the lease begins.

Water Contamination Disclosure

Landlords who charge tenants for water or sewage utilities must notify them of any known contaminant levels that exceed state guidelines.

Optional Disclosures and Addenda

While not mandated by law, the following disclosures and addenda are recommended to assist with tenant management and limit landlord liability:

  • Asbestos: Information regarding any asbestos hazards related to the property.
  • Bed Bugs: Disclosure of any history of suspected bed bug infestation.
  • Landlord’s Name and Address: Providing contact information for important notices.
  • Returned Check Fees: Specification of fees for returned checks.
  • Medical Marijuana Use: Policy regarding medical marijuana usage on the property.
  • Mold Disclosure: Information about actual or suspected mold contamination.
  • Move-In Checklist: An inventory of existing property damage at move-in.
  • Non-Refundable Fees: Disclosure of any non-refundable fees.
  • Shared Utilities Arrangements: Information on how charges are billed for shared utilities.
  • Smoking: Designation of smoking areas.

Consequences of Not Including Mandatory Disclosures

Failure to provide federally or state-mandated disclosures can result in legal consequences or monetary penalties for landlords, including significant fines for violations related to lead-based paint disclosures.

Terminating a Lease

For month-to-month tenancies, either party can terminate the lease by providing a 7-day written notice to the other party.

Additional Information

  • Lease Length: Leases can be of any length as long as the duration is specific and agreed upon in writing.
  • Notarization: Lease agreements do not need to be notarized in North Carolina.
  • Automatic Renewal: Leases can automatically renew, transitioning to month-to-month or week-to-week agreements based on the original terms.

FAQs

In North Carolina, landlords must include several required disclosures in residential lease agreements, such as the Lead-Based Paint Disclosure for properties built before 1978, a Security Deposit Receipt detailing where the deposit is held, and a Late Fees Disclosure if applicable. These disclosures ensure tenants are informed about potential hazards and the handling of their deposits.

In North Carolina, the maximum security deposit a landlord can charge is two months’ rent for fixed-term tenancies and one and a half months’ rent for month-to-month tenancies. The landlord must also return the security deposit within 30 days of the lease’s end, along with an itemized list of any deductions.

Late fees in North Carolina rental agreements must be explicitly stated in the lease. They are capped at $15 or 5% of the monthly rent, whichever is greater, and can only be charged if the rent is more than five days late. For weekly leases, late fees are capped at $4 or 5% of the weekly rent.

Yes, a lease agreement can automatically renew in North Carolina. Typically, once the initial term ends, the lease transitions to a month-to-month agreement unless otherwise specified, maintaining the same terms and conditions as the original lease.

If a landlord fails to provide mandatory disclosures in North Carolina, they may face legal consequences, including potential fines or penalties. For example, not complying with the federal lead-based paint hazard disclosure can result in fines of tens of thousands of dollars per violation.

In North Carolina, there is a five-day grace period for rent payments. If the rent is not paid within this period, the landlord may begin the eviction process by issuing a notice to quit.

No, lease agreements in North Carolina do not need to be notarized to be legally binding. However, having a notary can help establish the identities of the parties involved in case of disputes.

Landlords in North Carolina must return the security deposit to the tenant within 30 days of the lease’s end. If any deductions are made for damages or unpaid rent, the landlord must provide an itemized list of these deductions to the tenant.