A North Carolina residential lease agreement (“rental agreement”) is a legal contract between a landlord overseeing a rental property and a tenant using the property. State and local laws set the rules for rental agreements, such as laws regulating the use of a tenant’s security deposit.
North Carolina Residential Lease Agreement Disclosures
These disclosures are required for residential lease agreements in North Carolina:
| Disclosure | Applicable To |
|---|---|
| Late Fees | All Leases Charging Late Fees |
| Security Deposit Holding | All Leases Collecting a Security Deposit |
| Water Contamination | Tenants Paying for Water/Sewer |
| Lead Paint | All Units Built Before 1978 |
Late Fee Disclosure
Applies to any North Carolina lease charging late fees.
North Carolina only enforces late fees which are disclosed and agreed in the lease. This includes both the fee amount and the timeline for assessing and charging it. For monthly rent, late fees are capped at $15 or 5% of the rent (whichever is greater), and must be charged only when payment is more than five days late. For weekly rent, late fees are capped at $4 or 5% of the weekly rent (whichever is greater).
This is an example of a late fee clause:
LATE FEE. If rent is not paid by the due date outlined in this lease, a late fee of ___% or $___ will be assessed to the balance.
Security Deposit Holding Disclosure
Applies to any North Carolina lease which collects a security deposit.
North Carolina requires security deposits be held in a trust account that is licensed and federally insured. The landlord or landlord’s agent must provide the tenant with the following information within 30 days after the lease begins:
- Name and address of the bank or institution where the tenant’s deposit is located; or
- The name of the insurance company providing the bond
Water Contamination Disclosure
Applies to any North Carolina rental where the tenant pays sewer or water charges to the landlord.
North Carolina leases charging tenants for water or sewage utilities must provide notice of any known contaminant levels higher than the guidelines provided by the state.
Download: North Carolina Water Contamination Disclosure Form (PDF)
Lead-Based Paint Disclosure
Applies to any North Carolina rental units built before 1978.
North Carolina residential leases for property built before 1978 must, by federal law, contain a lead-based paint disclosure. This requires landlords to do the following:
- Fill out and attach this lead-based paint disclosure form to the lease agreement
- Provide the tenant with an Environmental Protection Agency (EPA) approved pamphlet about the dangers of lead-based paint
- Provide any additional records or reports about the presence or hazards of lead-based paint in the unit (for multi-unit buildings with common areas, this includes information from building-wide evaluations)
Download: North Carolina Lead-Based Paint Disclosure Form (PDF)
Optional Disclosures and Addenda (Recommended)
The following lease agreement disclosures and addenda are not required by North Carolina law. They are common inclusions in rental agreements to help with potential tenant conflicts or landlord liability.
| Optional Disclosure | Purpose |
|---|---|
| Asbestos | Informs tenants if there is asbestos on the property. May suggest precautions the tenant can take to minimize the chance of disturbing any asbestos fibers. |
| Bed Bugs | Informs tenants whether the property or an adjacent unit has a history of suspected bed bug infestation, and reminds the tenant of the obligation to report suspected infestation immediately. |
| Landlord’s Name and Address | Guarantees smooth communication and payment of rent in the event of any unusual situations. Typically includes additional contact information for the landlord and authorized agents, such as phone numbers and email addresses. |
| Returned Check Fees | Specifies returned check fees related to the lease. North Carolina does not restrict late fees. Returned check fees have a $35 limit. |
| Medical Marijuana Use | Provides rules or restrictions for tenant use of medical marijuana on the property. Some laws allow landlords to restrict marijuana usage to non-smoking methods only, or to designated smoking areas which do not risk interfering with other premises. |
| Mold Disclosure | Informs the tenant of the property’s current mold status. May help protect the landlord against future liability for mold damages. |
| Move-In Checklist | A move-in checklist helps protect both the landlord and the tenant from false claims about property damage. |
| Non-Refundable Fees | Charges not agreed by the tenant in the lease may be refundable when the lease ends. For North Carolina landlords to charge a non-refundable fee, it must be disclosed and agreed as such in the lease. |
| Shared Utilities Arrangements | Discloses how charges are billed to individual tenants, when multiple rental units share a utility meter for the whole building or property. This ensures tenants receive fair charges and understand what uses contribute to their bill. |
| Smoking | Informs tenants of designated smoking areas which don’t interfere with the use of other premises. |
Consequences of Not Including Mandatory Disclosures
Failure to include a mandatory disclosure could result in fees, denial of eviction, refusal of the landlord’s other rights under the lease, and similar legal penalties. Disclosures outline important health, safety, and property information, and the law penalizes failure to disclose.
Lead-based paint hazards are particularly important as a disclosure. Landlords who don’t disclose the potential for lead hazards can face tens of thousands of dollars in fines per violation.
Sources
- 1 N.C. Gen. Stat. § 42-46
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(a) In all residential rental agreements in which a definite time for the payment of the rent is fixed, the parties may agree to a late fee not inconsistent with the provisions of this subsection, to be chargeable only if any rental payment is five days or more late. If the rent:
(1) Is due in monthly installments, a landlord may charge a late fee not to exceed fifteen dollars ($15.00) or five percent (5%) of the monthly rent, whichever is greater.
(2) Is due in weekly installments, a landlord may charge a late fee not to exceed four dollars ($4.00) or five percent (5%) of the weekly rent, whichever is greater.
(3) Is subsidized by the United States Department of Housing and Urban Development, by the United States Department of Agriculture, by a State agency, by a public housing authority, or by a local government, any late fee shall be calculated in accordance with subdivisions (1) and (2) of this subsection on the tenant’s share of the contract rent only, and the rent subsidy shall not be included.
(b) A late fee under this section may be imposed only one time for each late rental payment. A late fee for a specific late rental payment may not be deducted from a subsequent rental payment so as to cause the subsequent rental payment to be in default.
(c) Any provision of a residential rental agreement contrary to the provisions of this section is against the public policy of this State and therefore void and unenforceable.
(d) A lessor shall not charge a late fee to a lessee because of the lessee’s failure to pay for water or sewer services provided pursuant to G.S. 62‑110(g).
Source Link - 2 N.C. Gen. Stat. § 25-3-506
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A person who accepts a check in payment for goods or services or the person’s assignee may charge and collect a processing fee, not to exceed thirty-five dollars ($35.00), for a check on which payment has been refused by the payor bank because of insufficient funds or because the drawer did not have an account at that bank.
If a collection agency collects or seeks to collect on behalf of its principal a processing fee as specified in this section in addition to the sum payable of a check, the amount of the processing fee shall be separately stated on the collection notice. The collection agency shall not collect or seek to collect from the drawer any sum other than the actual amount of the returned check and the specified processing fee.
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