North Carolina Residential Lease or Rental Agreement for Month to Month

Note: This summary is not intended to be a detailed, all-inclusive discussion, but rather an overview of typical provisions of general residential landlord-tenant law, as set forth in the Uniform Landlord Tenant Law. Versions of the Act have been adopted in the following states: Alaska, Arizona, Florida, Hawaii, Iowa, Kansas, Kentucky, Montana, Nebraska, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee or Virginia. Other states have similar Landlord Tenant laws.

For State specific information see the North Carolina Landlord Tenant Law.

What leases are not covered by this summary?

This summary only covers residential housing and apartment leases. It does not cover condominiums, residence at a public or private institution, or occupancy under a rental agreement covering premises used by the occupant primarily for agricultural purposes.

Certain Provisions of Residential Leases not allowed?

Some lease provisions are prohibited or will not be enforced by the Court. Unconscionable provisions may be held unenforceable in court. Unconscionable provisions include (but are not limited to) those in which a tenant agrees to waive rights granted to tenants under applicable law, agrees to pay landlord's attorney fees beyond what is allowed by law, or agrees to the limit the liability of or hold harmless the landlord for landlord's legal liabilities related to the lease. If a landlord intentionally inserts lease provisions known to him to be unenforceable, the landlord may be liable for increased damages.

Obligations of good faith?

Landlords and tenants are obligated to act in good faith (that is, with sincerity, and without ulterior motives) when performing acts under the lease agreement.

Limitation of use to residential use?

Leases typically limit the use of the premises to residential use, and forbid use as a business. Exceptions for limited business use are allowed in some states.

Disclosure of landlord and property manager.

Most states require that tenant be informed of the names and addresses of the landlord and (if different) the property manager of the premises. This information should be provided to tenant prior to or as as part of the lease.

Security Deposits.

Security deposits may be demanded by the landlord at the time of the lease to ensure partial or total coverage of expenses if the tenant leaves behind damage, unpaid rent, or leaves the premises in an unclean condition after the termination or expiration of the lease. Typically the amount of the security deposit is capped by statute at a maximum amount such as one or two month's rent. Procedures concerning security deposits vary widely from state to state, with a sizable minority of states requiring placement in a separate, interest bearing bank account with interest being periodically paid out to tenants. A tenant and landlord are typically required to inspect and document the condition of the premises prior to the lease, and to revisit and redocument the conditions after the lease, regardless of whether the lease was terminated due to breach or simply expired. A Landlord may retain a portion of the security deposit sufficient to repair damages (other than reasonable wear and tear), clean and account for unpaid rent. The remainder must be mailed to the tenant with documentation of the deductions. A Tenant must provide his forwarding address, and there is a limit on the obligation of the landlord to retain the security deposit when unable to reach the tenant by mail. Suit may be brought by the tenant for failure of the landlord to fulfill the statutory obligations, but damages are normally capped.

Typical duties of the landlord.

A Landlord is obligated to supply possession of the premises as agreed in the lease. The premises must meet minimum standards of habitability including compliance with applicable building codes. Weatherizing, locks, running water, working plumbing, heating and cooling, pest control, and other basics must be in place. A Landlord is obligated to keep the premises in repair, to the same standard as existed when the tenant initially leased the premises. Damages caused by the tenant, however, will be repaired only at the tenant's expense.

Typical duties of the tenant.

Aside from complying with the lease agreement (many of which typically incorporate statutory duties of tenants), the tenant is obliged to keep the premises in as clean and safe condition as possible, and comply with any applicable health and safety codes, including proper disposal of garbage. The facilities and appliances in the premises must be used in a reasonable manner. A Tenant must not damage the premises, nor cause a nuisance to neighboring tenants. A Tenant must not permit or participate in criminal activity on the premises. A Tenant is required to inform the landlord of any dangerous conditions that develop, of any damage caused to the premises by whatever source, and of any serious injury to the tenant, the tenant's family or guests, or the tenant's property while on the premises.

Rules and Regulations promulgated by Landlord.

A landlord may adopt rules and regulations concerning the tenant's use and occupancy of the premises in order to promote safety and welfare, preserve property, and fairly distribute services and facilities. If the rules are reasonable and specific, they will be enforceable if the tenant has notice of the rules, either at the time the tenant enters into the lease agreement, or at the time the rule is adopted. If adopted after the tenant has entered the agreement, the tenant must consent to it in writing if the rule substantially modifies the lease agreement.

Typical tenant remedies for breach by landlord.

If the landlord breaches his obligations to maintain the premises, the tenant normally has several options. First, the tenant must usually give the landlord a written notice with a deadline in which to repair the problem, the deadline being prescribed by law and varying from shorter to longer depending on the severity and impact of the problem. If the landlord fails to act, the tenant may either terminate the lease, have the damages repaired by outside contractors or by the tenant himself and deduct the cost of repairs from the next month's rent, or withhold rent until the landlord repairs the damage. If a landlord fails to provide possession of the premises, the tenant may find other lodgings and sue the landlord for the difference in monthly cost, providing the tenant mitigates damages. If a landlord wrongfully evicts the tenant, the tenant's option is normally to fight the eviction in court and sue the landlord for damages.

Typical landlord remedies for tenant breach.

If a tenant breaches the lease agreement, the landlord must serve written notice of the breach upon the tenant, describing specifically what consitutes the breach, and in many cases, stating a deadline by which the tenant must remedy the breach or be terminated. The period of notice prior to the deadline is defined by statute and varies in length depending on the severity and type of breach. If the breach is non-payment of rent, a period from three days to two weeks is typically allowed for repayment. If the breach is related to a condition which affects health or safety, a suitably short period of time is allowed in which to remedy the defect. If the breach involves property damage or other non-threatening conditions, the period of notice is typically 30 days, and the landlord may exercise the option to repair the damages himself if the tenant has done nothing within two weeks (the tenant being charged with the price of repair). Criminal activities are often in a separate category, and the landlord may terminate the lease immediately, or on short notice.

How does the landlord terminate for non-payment of rent?

A Landlord must typically serve a written notice on the tenant, specifying the amount of rent owed and demanding payment in a period of time usually from three to fourteen days (depending on state law), or face termination of the lease. If the tenant pays before the deadline, then the lease is not terminated. Some state statutes remove the protection of the notice period if the tenant is late with payment more than a certain number of times per year.

Rules regarding abandonment of premises.

Abandonment is typically defined as absence of the tenant from the premises for a period of time when rent has not been paid. Provided the statutory definition is met, a Landlord is allowed to reposses the premises and store the tenant's belongings. A Tenant may recover same before the expiration of a certain time period, but must reimburse the landlord for the cost of storage.

Rules regarding landlord access to the premises.

A Landlord has the right to enter the premises at reasonable times to inspect, maintain, and show the premises. Except in the case of emergency, a landlord must gain permission from the tenant in order to enter. The Tenant may not unreasonably deny permission. Either party may obtain injunctive relief from the courts if the other party is unreasonable regarding access issues.

Damages from fire or disaster.

If the premise is rendered uninhabitable, a tenant may move out and give written notice to the landlord of termination of the lease. If only part of the premise is uninhabitable, a tenant may deduct a proportional amount from rent. Either the landlord or tenant may recover damages if the other caused the damages.

What is "mitigation of damages"?

If a tenant's or landlord's property is being damaged by the action or inaction of the other, the injured party is generally not allowed by law to let the damages continue to mount if there is something they could do to stop the damage from occuring or lessen the severity thereof. Courts will not allow a claimant to recover for damages which he was reasonably capable of preventing, no matter if the source of the damage was the action or inaction of another. This principle of mitigation of damages is especially applicable to landlord-tenant law and must be adhered to by landlords and tenants.

Sub-leases & Assignments.

It is allowable in a lease for the landlord to retain complete control over whether a tenant is allowed to sub-lease the premises. In a minority of states, the landlord may not unreasonably refuse permission. On the other hand, the landlord is always free to assign his interest in the leased property to another. A Tenant must be notified of the change and of the new address at which to pay rent.

Self-help recovery of possession prohibited.

In a large majority of states, self-help recovery of possession of premises (locking out tenant or forcibly removing tenant) has been abolished. Landlords must follow the legal processes under state law to accomplish eviction of tenants.

Definitions.

Tenancy at will: A rental agreement that may be terminated "at the will" of either landlord or tenant.

Typically an unwritten agreement may require a brief period of notice of termination.

Tenancy at sufferance: A tenant who has no right to occupy the premises, but is tolorated by the landlord and may be terminated at the will of the landlord.

Payment of rent by the tenant transforms the tenancy into an "at will" tenancy.

Tenancy for year to year: A written lease with a term of at least one year.

If there is no expiration date, the lease may require a notice of termination of one to three months.

Tenancy from month to month: A written lease with a term of less than one year.

Termination typically requires a one month notice.

Tenancy from week to week: A written or unwritten lease, characterized by payment of rent on a weekly basis, which typically requires a one week notice of termination if there is no designated expiration date.

"Normal wear and tear": Deterioration or depreciation in value by ordinary and reasonable use but does not include items that are missing from the dwelling unit.

"Premises": A dwelling unit, appurtenances thereto, grounds, and facilities held out for the use of tenants generally and any other area or facility whose use is promised to the tenant.

Lease Form Summary:

Each and every paragraph of the Lease is important. Below is a brief explanation of each paragraph:

Preamble : Indicates the date the Lease is entered, and the names of Landlord and Tenant. First notice to Tenant(s) of joint, several and individual liability under the Lease- the more often and prominently this is mentioned, the more likely it will be upheld by a court.

1. Grant of Lease: The formal "grant" of the Lease. This paragraph identifies the location and address of the leased premises, and any additional "personal property" (anything other than land, buildings, and items affixed thereto), for example any furnishings inside the premises.

2. Nature of Occupancy: Limits the number of people residing in the premises to those listed (with the exception of any children born during the term of the Lease).

3. Term of Lease: Establishes the beginning and ending dates of the Lease, and acknowledges that the Lease might be extended.

4. Security Deposit: A detailed section describing the procedures and statutory requirements regarding the security deposit. These paragraphs contain important legal information for both Landlord and Tenant, and the procedures described therein should be followed systematically.

5. Rent Payment: Important information including the dollar amount of monthly rent, the date due, the grace period after which a late fee becomes applicable, the amount of pro-rated rent for an initial partial month, the type of payment accepted (check, cash, etc.- some landlords may prefer to only accept certain types of payment), the place at which rent shall be paid (including the location and address for tendering payment), notice by tenant that "the check is in the mail" is not a valid excuse for untimely payment under this Lease since rent is not considered paid until received, and finally another statement regarding the joint, several and individual liability of each Tenant for the payment of rent.

6. Consequences of Breach by Tenant: This paragraph contains important information regarding the consequences of the Tenant's (or persons under control of the Tenant) violation ("breach") of the conditions and agreements contained in the Lease. This paragraph warns the Tenant that procedures are clearly spelled out for what will occur if the Tenant violates the Lease, and acts as a road-map for Landlord who might be unsure of how exactly to handle a given situation.

7. Notices: Defines rules for properly delivering written notices to both Landlord and Tenant.

8. Utilities: Avoids any confusion about utilities by specifically setting out who pays for what utility services and establishing that Tenant will arrange for both initial utility set-up, and disconnection of utilities at the end of the Lease.

9. Notice of intent to surrender: Facilitates planning by the Landlord by requiring Tenant to give 30 days notice of Tenant's intent to move out at the end of the Lease term. If Tenant does not give notice, then at the expiration of the Lease term, the Lease automatically becomes a month-to-month lease, which either Landlord or Tenant may terminate for any reason upon giving 30 day notice.

10. Obligations and Duties of Landlord: Details the duties of the Landlord under state law. Typically, this section closely tracks the actual state statute. Landlord and Tenant will both find this section a useful reference.

11. Obligations and Duties of Tenant: Details the duties of the Tenant under state law, typically tracking the actual state statute. Landlord and Tenant will both find this section a useful reference. Most breaches of the Lease occur due to violations by Tenant of one or more provisions of this section.

12. No Assignment: Establishes that Tenant is not allowed to sub-let or assign the premises without the express written consent of the Landlord. Enables Landlord to maintain control over who resides in the premises.

13. Tenant Insurance: Notifies Tenant that Tenant is responsible for his own insurance, and that Landlord will pay damages for nothing that is not the legal fault of the Landlord or his agents. Tenant cannot now claim to have thought that Tenant's property was somehow protected by a policy of insurance held by the Landlord.

14. Condition of Leased Premises: An important paragraph attempting to defend the Landlord against certain potential claims by the Tenant that Tenant is unhappy with the premises. Tenant agrees that he either examined the premises, or waived the examination, and that Tenant takes the property in an AS-IS condition. Note that this does not eliminate the Landlord's obligations and duties as defined in the Lease, but rather attempts to preempt minor and annoying claims by Tenant. Tenant is required to pay for repairs to damage, including any damage caused by removal of any fixture attached to the premises.

15. Alterations: Gives Landlord total control and veto power over any alterations desired by Tenant.

16. No illegal use: Forbids illegal activities on the premises, and specifically designates same as grounds for termination.

17. Notice of Injuries: Compels Tenants to immediately report any serious injuries sustained by Tenant or others on the premises. Important so that Landlord can fix any problem that may threaten further injury, and immediately take steps to protect his rights, including contacting insurance companies, etc.

18. Landlord's Right to Mortgage: Eliminates unnecessary delay by establishing Landlord's right to sign any necessary documents on behalf of Tenants in the event of a mortgage of the property by Landlord.

19. Delay in Repairs: Gives Landlord breathing room in the event necessary repairs are delayed due to unreliable repair men, or other reasons beyond Landlord's control.

20. Abandonment: Defines abandonment and the consequences thereof. Before taking any action related to abandonment, it is imperative that the Landlord contact a local attorney to discuss the situation in order to be fully appraised of applicable state law beyond the scope of the Lease.

21. Notice of Absence from Premises: A provision suggesting and requesting (but not requiring) that Tenant inform the Landlord of planned extended absences from the premises.

22. Possession of Premises: Entitles Tenant to begin possession of premises only upon payment of required monies AND removal of any holding-over tenants by Landlord. Tenant is thus put on notice that Landlord may have to conclude legal eviction of previous tenants before the premises are to become available.

23. Delay of Possession: Tenant agrees not to sue Landlord if Landlord is unable to timely provide possession of the premises. Though this provision may be unenforceable in some states, it gives the Landlord breathing space against possible legal action by the prospective Tenant.

24. Materiality of Application to Rent: Indicates to Tenant that lying or failing to disclose information on the rental application is not an insignificant act, and will be considered a serious breach of the Lease.

25. Modification of This Lease: Provides that only written modifications to the Lease shall be valid. Any passing comments or verbal agreements are not enforceable.

26. Remedies Not Exclusive: Establishes that the remedies contained in the lease are not the only remedies available, but that all remedies under state law remain in full force and effect, and are not excluded due to their not being mentioned in the Lease.

27. Severability: This provision has the legal effect of ensuring the survival of the remainder of the Lease if one part is determined to be void or unenforceable.

28. No Waiver: Helps Landlord deal with problems in the way he best sees fit, by allowing him to give second and third chances to offending Tenants without legally abandoning ("waiving") his right to declare a breach of the Lease due to the offending conduct.

29. Attorney Fees: Establishes that to the maximum extent allowable by state law, the Tenant will be responsible for paying the Landlord's attorney fees in the event that the Landlord must take court action against the Tenant under the Lease.

30. Heirs and Assigns: This section provides that the lease is binding on the heirs and assigns of the landlord.

31. Destruction of Premises: A detailed procedure in case of total or partial destruction of the premises.

32. Eminent Domain: Describes the consequences (pro-ration of rent) to the Lease of the premises being condemned and taken by governmental use of eminent domain.

33. Landlord Entry and Lien: Rules for Landlord entry into the premises, and an outline of lien rights of the Landlord. It is imperative to consult a local attorney prior to taking action involving liens, in order to be appraised of the details of state law thereon, which is beyond the scope of this Lease.

34. Governing Law: Establishes which state's law governs the Lease.

35. Additional Provisions: Any additional or special provisions that the Landlord wishes to include can be placed here.

Signature page: The Lease is not complete or binding without the signature(s) of the Tenant(s) and Landlord.