The North Carolina residential lease agreement (“rental agreement”) outlines the conditions agreed upon by a landlord and tenant for the residential use of real estate. The contract will include the length of the agreement (“term”), the payment amount (“rent”), as well as the obligations of the tenant while leasing the property.
North Carolina Lease Agreement Disclosures
The below disclosures are required for all residential lease agreements in North Carolina.
Late Fee Disclosure
Applicable to any unit charging late fees North Carolina.
Late fees in North Carolina must be outlined in the lease agreement to be enforceable, including the amount of the fee and the date it is assessed. For monthly payments, the maximum late fee is the greater of $15 or 5% of the rent and shall not be imposed until the tenant is five days late. For weekly payments, fees may not exceed the greater of $4 or 5% of the weekly rent.
The below is an example of a late fee section:
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
Applicable to any unit charging a security deposit in North Carolina.
A security deposit from the tenant shall be deposited into a trust account that is licensed and federally insured. The landlord or the landlord’s agent shall notify the tenant within 30 days after the beginning of the lease term of the below information:
- Name of the bank and address of the bank or institution where the tenant’s deposit is currently located; or
- The name of the insurance company providing the bond.
Water Contamination Disclosure
Applicable to any unit where the tenant pays sewer or water charges to the landlord in North Carolina.
In North Carolina, landlords who charge tenants for water or sewage utilities must provide notice of contaminant levels exceeding the guidelines provided by the state (if they are known).
Lead-Based Paint Disclosure
Applicable to any rental units built prior to 1978.
It is a federal law in the United States that any home built prior to 1978 must disclose the risks posed by lead-based paints. This law requires landlords in North Carolina to:
- 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 additional records or reports about the presence or hazards of any known lead-based paint in the unit. For multi-unit buildings with common areas, this includes information from building-wide evaluations.
Optional Disclosures & Addendums (Recommended)
The below lease agreement disclosures and addendums are not required by North Carolina law. These disclosures can be helpful to include to help reduce future conflicts with tenants or reduce legal liability for landlords.
|Optional Disclosure||How the Disclosure is Helpful|
|Asbestos||This disclosure informs tenants if there is asbestos at the property. If there is asbestos a tenant can take certain precautions to minimize the chance of disturbing the asbestos fibers.|
|Bed Bugs||If the rental unit has a history of infestation, landlords should provide information on how to handle a bed bug infestation. This disclosure notifies the tenant of their obligation to cooperate with bed bug prevention and immediately report any sign of infestation to the landlord.|
|Landlord’s Name & Address||Creates a line of communication for important notices and demands between tenant and landlord. Landlords or any authorized individual to act on behalf of the property should provide contact information (including their address) within or alongside the lease.|
|Returned Check Fees||Landlords should disclose if they will charge a returned check fee in the lease agreement. In North Carolina a returned check fee is limited to $25.|
|Medical Marijuana Use||Inform tenants if medical marijuana use on the property is permittable. Some state laws allow landlords to restrict marijuana usage to non-smoking methods only or inform tenants of designated smoking areas to not interfere with other tenants’ enjoyment of the premises.|
|Mold Disclosure||Informing the tenant of the current mold status of a property protects the landlord against future liability of mold damages.|
|Move-in Checklist||A move-in checklist holds the tenant accountable for future damages that they may cause.|
|Non-Refundable Fees||A non-refundable charge must be written in the lease agreement. If a non-refundable charge is not written in the lease, the tenant may be subject to a refund upon termination of the lease.|
|Shared Utilities Arrangements||For rental units with shared utilities, a landlord should disclose the specifics of how they are shared, and how each party’s bill is calculated. Providing this information to tenants will give them a reasonable expectation of what they owe each month.|
|Smoking||Inform tenants of designated smoking areas to not interfere with other tenants’ enjoyment of the premises.|
Consequences of Not Including Mandatory Disclosures
Disclosures outline the important health, safety, and property information and vary by state. If a landlord does not provide the tenant with the federally or state-mandated disclosures, they could face legal repercussions or monetary penalties.
If a landlord fails to disclose the lead-based paint hazard disclosure, they can face fines of up to $18,364 per violation. (24 CFR § 30.65)
It’s best to check with your local and state laws on which disclosures you must provide to your tenant.