If you’re a landlord in North Carolina, it is essential that you are aware of the rent laws in your state and keep the operations of your business within these bounds. Property management is regulated on both the federal and state level, so it’s important to follow the ways in which North Carolina landlord tenant laws change over time.
Here are some of the primary rental laws in North Carolina that you should be aware of broken down by category.
Fair Housing Protections
The federal Fair Housing Act is enforced in every state and makes housing discrimination on the grounds of race, color, religion, gender, national origin, familial status, or disability illegal. Refusing to negotiate or engage in a real estate transaction or creating unfair terms and conditions on the basis of one of these classes qualifies as discrimination. This law was first enacted in 1968, and in 1983, the North Carolina Fair Housing Act was enacted, which essentially upholds all of the protections of the federal law.
Additionally, in North Carolina, landlords are permitted to use the findings of a criminal background check as grounds to refuse renting out a property to a tenant. However, to the HUD recommends that landlords not immediately deny a prospective tenant due to the existence of a criminal record. Instead, look at each applicant on a case-by-case basis and only deny residents when you feel there is a concern either with safety or with the fulfillment of your lease agreement.
Rent and Late Fees
Rent control is banned in North Carolina, meaning that the state government cannot regulate how much landlords charge to their tenants. In April, the median rent in the state is around $1,900 and is steadily rising. The median rent in Charlotte—the state’s most populated city—is $1,975. These rates are slightly lower than the national average.
While rent is not regulated, there are restrictions and guidelines for imposing late fees on tenants. First, North Carolina requires that there be a 5-day grace period, meaning that tenants have five days after the deadline before a landlord can charge late fees.
There is also a ceiling on how much you can charge your tenants for late fees. If rent is collected monthly, the maximum you can charge is either $15 or 5% of the rent amount, whichever is greater. With a median rent of $1,900, 5% is very likely to be the greater of the two. For weekly rent, this amount changes to the greater value between $4 and 5% of the rent amount.
Security Deposits
The amount that you can charge for a security deposit is also regulated in North Carolina. If your tenant pays rent monthly, you can only charge up to the cost of one and one-half months’ rent. For tenants who pay rent on a weekly basis, the maximum is two weeks’ worth of rent.
Additionally, the money should be held in trust account with a licensed and federally insured depository institution, a trust institution authorized to do business in the state, or you should furnish a bond from an insurance company licensed to do business in the state
Security deposit funds that remain after any deductions must be returned to the tenant within 30 days of the end of their tenancy.
Eviction Laws
If tenants are not paying their rent, North Carolina eviction laws require landlords to give tenants a 10-day rent demand notice before they are able to file for eviction. If tenants pay their rent in that 10-day period, the pending eviction is canceled.
It’s important to note that the 5-day grace period required by law is not part of this10-day period, which can only start after the grace period has ended. In all, tenants have at least 15 days to pay their rent before an official eviction lawsuit can be filed.
Conclusion
Each state has different rules and regulations regarding property management, so it’s important to make sure that your rental business is compliant with your state. As a landlord in North Carolina, you want to be sure that you’re doing the difficult but necessary work to protect your investments from any potential legal issues.
