The North Carolina rental application form is a document that landlords send out to a prospective tenant to determine their viability as a tenant. Questions usually involve finances, rental history, any evictions, or pets that may accompany the tenant.
North Carolina Laws on Rental Application Fees
In North Carolina, there is no limit or maximum rental application fee a landlord can charge a prospective tenant. It’s advised to not charge more than the average out-of-pocket expense, but ultimately the determination of the fee is at the sole discretion of the landlord.
If a prospective tenant’s application is approved, a landlord may charge a security deposit according to North Carolina state law. For rental agreements longer than a month-to-month basis, the maximum amount a landlord can charge for a security deposit is two months’ rent. If the rental agreement is month-to-month, the limit is one and one-half month’s rent. If the rental agreement is week-to-week, the limit is two weeks’ rent.
Additionally, a security deposit must be held in a trust account in a federally insured depository institution or trust institution within the state. The landlord also has the option of posting a bond from an insurance company licensed to do business in the state, in the amount of the security deposit. Within 30 days of the lease beginning, the tenant must be informed of the name of the insurance company or the name and location of the institution where their security deposit is being held. There is no requirement for a North Carolina landlord to provide a receipt for a security deposit.
What North Carolina Rental Application Forms Can’t Ask About
Federal laws are in effect in North Carolina to protect potential renters from unfair discrimination during the application process. The Federal Fair Housing Act makes it illegal to discriminate against the following protected classes:
- National Origin (Nationality)
- Familial Status (having or not having children)
- Disability (Physical or Mental)
As a result, asking about any of these items on a rental application form (and/or using them to base an application decision on) is illegal.
Exemptions from Fair Housing laws do exist. In North Carolina, the following exemptions are allowed:
- Familial Status – asking about and basing an application decision on if children will occupy the rented premises is allowed in any two-family owner-occupied buildings.
- Age – landlords may ask for an applicant’s age in the case of age-specific communities, such as senior housing or 55+ communities, due to the Housing for Older Persons exemption.
- Owner Occupied Properties – if an owner lives in one of the units of a single-family property, it has 4 dwellings or less and the owner represents themselves during the leasing process, then they are exempt from abiding by FHA laws under the “Mrs. Murphy” exemption. However, race can never be a deciding factor (per the Civil Rights Act of 1866) and there cannot be any discriminatory advertisements to discourage applicants of a certain group.
- Religious Organizations – religion can be used as a basis for giving preference to certain applicants for property that is owned, operated, supervised, or controlled by a religious organization that does not rent for commercial purposes. However, other protected classes may not be the basis for making a decision as a result of this exemption. 42 U.S. Code § 3607
- Private Clubs – private clubs that operate without public access or commercial intent may provide preferential treatment of applications for lodgings owned or operated by the club. 42 U.S. Code § 3607
Consent for Background Checks
Before a landlord can run a credit check based on the prospective tenant’s information on the submitted rental application, the Federal Credit Reporting Act requires that written consent must be given by the applicant. This written consent can be given via a statement of such and signature on the rental application form itself, or via a separate consent form (such as this one).
Processing a Rental Application
The next step in the tenant screening process is to use the information on the rental application form to conduct a background check:
- Credit Check – subject to the tenant’s written consent, a credit check will either provide a simpler “pass/fail” report, or a full credit report including the tenant’s credit score and information about their income, employment, past addresses, credit inquiries and more.
- Eviction Check – an eviction check aims to show the tenant’s history of eviction filings or judgments against them at any point in the last 7 years.
- Criminal History Check – a criminal history check aims to show any records involving the tenant in state court criminal records or in databases such as the national sex offender public registry.
North Carolina Eviction Record Search
Evictions in North Carolina are public record, which means they can be accessed by anyone. However, North Carolina does not currently have an online system for individuals to check court records.
Landlords are recommended to use a third-party service, which can be found online or locally. To obtain records, landlords are recommended to use a third-party service, which can be found online or locally. North Carolina’s clerk of the court’s office has eviction records on file. The request a record from the North Carolina Judicial Branch, complete the following form here.
Landlords will need to complete the personal information section and also inform the court of what records you are requesting from the prospective tenant.
Adverse Action Notices
If you acquire a consumer report for an applicant (i.e., credit, eviction or criminal history) and take an “adverse action” against them such as any of the following:
- Rejecting the applicant
- Requiring a co-signer (when they didn’t include one before)
- Requiring a larger security deposit
- Requiring higher rent
Then you are legally required to provide the tenant with a notice letter that includes certain details, known as an “adverse action notice”. This is required even if the consumer report’s information wasn’t the primary reason for the action.
The notice must include details about the consumer reporting agency, an explanation that they didn’t take the adverse action themselves (and can’t explain why it was made) and a statement on the applicant’s right to a copy of the report and to dispute its contents within 60 days. Additionally, when rejecting an applicant, it’s recommended to specify the reason (but not legally required).
For an example, see this tenant rejection letter template.