A North Carolina residential lease agreement (“rental agreement”) is a legal contract between a landlord overseeing a residential property and a tenant who wishes to rent it. A residential lease may, on or before move-in, additionally require a security deposit from the tenant as assurance against future property damage.
These disclosures are required for all 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 |
Applicable 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 amount of the fee 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 tenant 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). [1]
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.
Applicable to any North Carolina lease which collects a security deposit.
North Carolina requires landlords to place security deposits into 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:
Applicable to any North Carolina rental where the tenant pays sewer or water charges to the landlord.
North Carolina landlords who charge tenants for water or sewage utilities must provide notice of any known contaminant levels exceeding the guidelines provided by the state.
Applicable to any North Carolina rental units built before 1978.
For any property built before 1978, federal law requires that a North Carolina residential lease must contain a lead-based paint disclosure. This requires landlords to do the following:
The following lease agreement disclosures and addenda are not required by North Carolina law in residential lease agreements, but assist with tenant management and help limit landlord liability.
| Optional Disclosure | Purpose |
|---|---|
| Asbestos | Informs tenants about any asbestos hazards related to the property. Tenants can take precautions to reduce asbestos hazards by avoiding any disturbance of 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 | 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 | Specifies late fees or returned check fees related to the lease. North Carolina does not restrict late fees, but caps returned check fees at $25. [2] |
| Medical Marijuana Use | Informs tenants about policy related to medical marijuana use on the rental property. Some state laws allow landlords to restrict marijuana usage to non-smoking methods only, or allow use only in designated smoking areas. |
| Mold Disclosure | Informs tenants about actual or suspected mold contamination on the property, along with any remediation efforts, to help limit landlord liability. |
| Move-In Checklist | Takes inventory existing of property damage, when the tenant takes possession of the rental property. This enables accurate deductions from the security deposit upon move-out. |
| Non-Refundable Fees | Charges not agreed by the tenant in the lease may be refundable upon lease termination. 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 that do not interfere with the quiet enjoyment of other tenants. |
Some North Carolina cities, like Charlotte and Raleigh, have more comprehensive rules than the statewide standard. Always check local laws.
Mandatory disclosures outline important health, safety, and property information for both landlord and tenant safety. A landlord who fails to provide federally or state-mandated disclosures could face legal consequences or monetary penalties, either from a tenant lawsuit or from state officials.
Failure to comply with the federal lead-based paint hazard disclosure risks fines of tens of thousands of dollars per violation.
…(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…
…A person who accepts a check in payment for goods or services or his assignee may charge and collect a processing fee, not to exceed twenty-five dollars ($25.00), 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 such processing fee must 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…
How Long Can a Residential Lease Be in North Carolina? Depending on circumstances, in North Carolina it’s usually possible to have a lease of any length of time, as long as the length of the lease term is specific and agreed in writing by the landlord and tenant. Oral leases can almost never be for a term of more than one year. Read more » Is a Contract to Lease Binding in North Carolina? Yes, a contract to lease is legally binding in North Carolina. To be valid, a contract to lease may have to be written, especially for a fixed term over one year. Oral leases may be valid in some cases (especially when both parties later behave as though there’s an enforceable oral lease), but often have strict limitations on enforceability for things like length of the lease term. Read more » Do Lease Agreements Need to Be Notarized in North Carolina? No, lease agreements do not need to be notarized in North Carolina. A notary helps establish the identity of the people signing the lease, if there’s a claim of fraud, but a notary isn’t necessary for a lease to be valid. Read more » Can a Lease Automatically Renew in North Carolina? Yes, a lease can automatically renew in North Carolina. Most rental agreements will automatically renew when the initial tenancy period is over. Past this point, the lease becomes a month-to-month rental agreement, with the same basic terms and conditions otherwise as the original lease. In some cases, such as if rent is being paid weekly, the lease may become a week-to-week lease. Read more »
