H.B. 854
GENERAL ASSEMBLY OF NORTH CAROLINA
May 4, 2021
SESSION 2021 HOUSE PRINCIPAL CLERK
H D
HOUSE BILL DRH40511-MQ-22B
Short Title: Landlord/Tenant Changes. (Public)
Sponsors: Representative Hardister.
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO CLARIFY AND REAFFIRM THE STATUTORY AUTHORITY OF
3 LANDLORDS TO RECOVER OUT-OF-POCKET EXPENSES AND LITIGATION
4 COSTS IN SUMMARY EJECTMENT PROCEEDINGS, TO MAKE VARIOUS
5 CHANGES TO THE LANDLORD/TENANT STATUTES, AND TO PROHIBIT
6 DISCRIMINATORY PRACTICES AGAINST TENANTS WITH SERVICE ANIMALS
7 OR SUPPORT ANIMALS.
8 The General Assembly of North Carolina enacts:
9
10 PART I. CLARIFICATION AND REAFFIRMATION OF RECOVERY OF
11 OUT-OF-POCKET EXPENSES AND LITIGATION COSTS IN SUMMARY
12 EJECTMENTS
13 SECTION 1.1. G.S. 42-46 reads as rewritten:
14 "§ 42-46. Authorized late fees and eviction fees.fees, costs, and expenses.
15 (a) Late Fee. – In all residential rental agreements in which a definite time for the
16 payment of the rent is fixed, the parties may agree to a late fee not inconsistent with the provisions
17 of this subsection, to be chargeable only if any rental payment is five days or more late. If the
18 rent:
19 (1) Is due in monthly installments, a landlord may charge a late fee not to exceed
20 fifteen dollars ($15.00) or five percent (5%) of the monthly rent, whichever is
21 greater.
22 (2) Is due in weekly installments, a landlord may charge a late fee not to exceed
23 four dollars ($4.00) or five percent (5%) of the weekly rent, whichever is
24 greater.
25 (3) Repealed by Session Laws 2009-279, s. 4, effective October 1, 2009, and
26 applicable to leases entered into on or after that date.
27 (b) A late fee under subsection (a) of this section may be imposed only one time for each
28 late rental payment. A late fee for a specific late rental payment may not be deducted from a
29 subsequent rental payment so as to cause the subsequent rental payment to be in default.
30 (c) Repealed by Session Laws 2009-279, s. 4, effective October 1, 2009, and applicable
31 to leases entered into on or after that date.
32 (d) A lessor shall not charge a late fee to a lessee pursuant to subsection (a) of this section
33 because of the lessee's failure to pay for water or sewer services provided pursuant to
34 G.S. 62-110(g).
35 (e) Complaint-Filing Fee. – Pursuant to a written lease, a landlord may charge a an
36 administrative complaint-filing fee not to exceed fifteen dollars ($15.00) or five percent (5%) of
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1 the monthly rent, whichever is greater, only if the tenant was in default of the lease, the landlord
2 filed and served a complaint for summary ejectment and/or money owed, the tenant cured the
3 default or claim, and the landlord dismissed the complaint prior to judgment. The landlord can
4 include this fee in the amount required to cure the default.
5 (f) Court-Appearance Fee. – Pursuant to a written lease, a landlord may charge a an
6 administrative court-appearance fee in an amount equal to ten percent (10%) of the monthly rent
7 only if the tenant was in default of the lease and the landlord filed, served, and prosecuted
8 successfully a complaint for summary ejectment and/or monies owed in the small claims court.
9 If the tenant appeals the judgment of the magistrate, and the magistrate's judgment is vacated,
10 any fee awarded by a magistrate to the landlord under this subsection shall be vacated.
11 (g) Second Trial Fee. – Pursuant to a written lease, a landlord may charge a second
12 administrative trial fee for a new trial following an appeal from the judgment of a magistrate. To
13 qualify for the fee, the landlord must prove that the tenant was in default of the lease and the
14 landlord prevailed. The landlord's fee may not exceed twelve percent (12%) of the monthly rent
15 in the lease.
16 (h) Limitations on Charging and Collection of Fees.Administrative Fees and
17 Out-of-Pocket Expenses and Litigation Costs.
18 (1) A landlord who claims administrative fees under subsections (e) through (g)
19 of this section is entitled to charge and retain only one of the above fees for
20 the landlord's complaint for summary ejectment and/or money owed.
21 (2) A landlord who earns a an administrative fee under subsections (e) through
22 (g) of this section may not deduct payment of that fee from a tenant's
23 subsequent rent payment or declare a failure to pay the fee as a default of the
24 lease for a subsequent summary ejectment action.
25 (3) It is contrary to public policy for a landlord to put in a lease or claim any
26 administrative fee for filing a complaint for summary ejectment and/or money
27 owed other than the ones expressly authorized by subsections (e) through (g)
28 [and] (i) of this section, and a reasonable attorney's fee as allowed by
29 law.section. This limitation does not apply to out-of-pocket expenses or
30 litigation costs.
31 (3a) It is contrary to public policy for a landlord to claim, or for a lease to provide
32 for the payment of, any out-of-pocket expenses or litigation costs for filing a
33 complaint for summary ejectment and/or money owed rather than those
34 expressly authorized under subsection (i) of this section.
35 (4) Any provision of a residential rental agreement contrary to the provisions of
36 this section is against the public policy of this State and therefore void and
37 unenforceable.
38 (5) If the rent is subsidized by the United States Department of Housing and
39 Urban Development, by the United States Department of Agriculture, by a
40 State agency, by a public housing authority, or by a local government, any fee
41 charged pursuant to this section shall be calculated on the tenant's share of the
42 contract rent only, and the rent subsidy shall not be included.
43 (i) Out-of-Pocket Expenses. –Expenses and Litigation Costs. – In addition to the late fees
44 referenced in subsections (a) and (b) of this section and the administrative fees of a landlord
45 referenced in subsections (e) through (g) of this section, a landlord is also also is permitted to
46 charge and recover from a tenant the following actual out-of-pocket expenses:
47 (1) Filing fees charged by the court.
48 (2) Costs for service of process pursuant to G.S. 1A-1, Rule 4 of the North
49 Carolina Rules of Civil Procedure and G.S. 42-29.
50 (3) Reasonable attorneys' fees actually incurred, paid or owed, pursuant to a
51 written lease, not to exceed fifteen percent (15%) of the amount owed by the
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1 tenant, or fifteen percent (15%) of the monthly rent stated in the lease if the
2 eviction is based on a default other than the nonpayment of rent.
3 (j) The out-of-pocket expenses and litigation costs listed in subsection (i) of this section
4 are allowed to be included by the landlord in the amount required to cure a default.
5 (k) As used in this section, the term "administrative fees" does not include out-of-pocket
6 expenses, litigation costs, or other fees."
7 SECTION 1.2. This Part is effective when it becomes law and is intended to apply
8 retroactively to all pending controversies as of that date. The amendments contained in this Part
9 are intended to be clarifying of the General Assembly's intent under previous amendments to this
10 statute.
11
12 PART II. VARIOUS CHANGES TO LANDLORD/TENANT STATUTES
13 SECTION 2.1. Article 1 of Chapter 42 of the General Statutes is amended by adding
14 a new section to read:
15 "§ 42-14.5. Foreseeability not created by criminal record; no duty to screen.
16 Notwithstanding any other duty or obligation which may be defined by this Chapter or
17 otherwise provided by law or any theory of liability, the criminal record of any prospective or
18 current residential lessee, occupant, or guest shall not make any future injury or damage arising
19 from that residential lessee, occupant, or guest foreseeable by the residential lessor or residential
20 lessor's agent, nor shall a residential lessor or a residential lessor's agent have a duty to screen
21 for, or to refuse to rent because of, the criminal record of a prospective or current residential
22 lessee, occupant, or guest. This statute does not prohibit a residential lessor or residential lessor's
23 agent from using a criminal background check as grounds for refusing to rent to any prospective
24 residential lessee or current lessee in a manner consistent with fair housing laws."
25 SECTION 2.2. G.S. 42-25.7 reads as rewritten:
26 "§ 42-25.7. Distress and distraint not permitted.
27 It is the public policy of the State of North Carolina that distress and distraint are prohibited
28 and that landlords of residential rental property shall have rights concerning the personal property
29 of their residential tenants only in accordance with G.S. 42-25.9(d), 42-25.9(g), 42-25.9(h),
30 42-36.2, 28A-25-2, or 28A-25-7."
31 SECTION 2.3. G.S. 28A-25-1 reads as rewritten:
32 "§ 28A-25-1. Collection of property by affidavit when decedent dies intestate.
33 (a) When a decedent dies intestate leaving personal property, less liens and
34 encumbrances thereon, not exceeding twenty thousand dollars ($20,000) in value, at any time
35 after 30 days from the date of death, any person indebted to the decedent or having possession of
36 tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action
37 belonging to the decedent shall make payment of the indebtedness or deliver the tangible personal
38 property or an instrument evidencing a debt, obligation, stock or chose in action to a person
39 claiming to be the public administrator appointed pursuant to G.S. 28A-12-1, or an heir or
40 creditor of the decedent, not disqualified under G.S. 28A-4-2, upon being presented a certified
41 copy of an affidavit filed in accordance with subsection (b) and made by or on behalf of the heir
42 or creditor or the public administrator stating:
43 (1) The name and address of the affiant and the fact that the affiant is the public
44 administrator or an heir or creditor of the decedent;
45 (2) The name of the decedent and the decedent's residence at time of death;
46 (3) The date and place of death of the decedent;
47 (4) That 30 days have elapsed since the death of the decedent;
48 (5) That the value of all the personal property owned by the estate of the decedent,
49 less liens and encumbrances thereon, does not exceed twenty thousand dollars
50 ($20,000);
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1 (6) That no application or petition for appointment of a personal representative is
2 pending or has been granted in any jurisdiction;
3 (7) The names and addresses of those persons who are entitled, under the
4 provisions of the Intestate Succession Act, to the personal property of the
5 decedent and their relationship, if any, to the decedent; and
6 (8) A description sufficient to identify each tract of real property owned by the
7 decedent at the time of the decedent's death.
8 In those cases in which the affiant is the surviving spouse and sole heir of the decedent, not
9 disqualified under G.S. 28A-4-2, the property described in this subsection that may be collected
10 pursuant to this section may exceed twenty thousand dollars ($20,000) in value but shall not
11 exceed thirty thousand dollars ($30,000) in value, after reduction for any spousal allowance paid
12 to the surviving spouse pursuant to G.S. 30-15. In such cases, the affidavit shall state: (i) the
13 name and address of the affiant and the fact that the affiant is the surviving spouse and is entitled,
14 under the provisions of the Intestate Succession Act, to all of the property of the decedent; (ii)
15 that the value of all of the personal property owned by the estate of the decedent, less liens and
16 encumbrances thereon, does not exceed thirty thousand dollars ($30,000); and (iii) the
17 information required under subdivisions (2), (3), (4), (6), and (8) of this subsection.
18 …
19 (d) The public administrator or an heir that has presented an affidavit as provided in
20 subsection (a) of this section shall be entitled to remove or otherwise dispose of the decedent's
21 personal property located in the demised premises."
22 SECTION 2.4. G.S. 28A-25-1.1 reads as rewritten:
23 "§ 28A-25-1.1. Collection of property by affidavit when decedent dies testate.
24 (a) When a decedent dies testate leaving personal property, less liens and encumbrances
25 thereon, not exceeding twenty thousand dollars ($20,000) in value, at any time after 30 days from
26 the date of death, any person indebted to the decedent or having possession of tangible personal
27 property or an instrument evidencing a debt, obligation, stock or chose in action belonging to the
28 decedent shall make payment of the indebtedness or deliver the tangible personal property or an
29 instrument evidencing a debt, obligation, stock or chose in action to a person claiming to be the
30 public administrator appointed pursuant to G.S. 28A-12-1, a person named or designated as
31 executor in the will, devisee, heir or creditor, of the decedent, not disqualified under
32 G.S. 28A-4-2, upon being presented a certified copy of an affidavit filed in accordance with
33 subsection (b) and made by or on behalf of the heir, the person named or designated as executor
34 in the will of the decedent, the creditor, the public administrator, or the devisee, stating:
35 (1) The name and address of the affiant and the fact that the affiant is the public
36 administrator, a person named or designated as executor in the will, devisee,
37 heir or creditor, of the decedent;
38 (2) The name of the decedent and the decedent's residence at time of death;
39 (3) The date and place of death of the decedent;
40 (4) That 30 days have elapsed since the death of the decedent;
41 (5) That the decedent died testate leaving personal property, less liens and
42 encumbrances thereon, not exceeding twenty thousand dollars ($20,000) in
43 value;
44 (6) That the decedent's will has been admitted to probate in the court of the proper
45 county and a duly certified copy of the will has been recorded in each county
46 in which is located any real property owned by the decedent at the time of the
47 decedent's death;
48 (7) That a certified copy of the decedent's will is attached to the affidavit;
49 (8) That no application or petition for appointment of a personal representative is
50 pending or has been granted in any jurisdiction;
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1 (9) The names and addresses of those persons who are entitled, under the
2 provisions of the will, or if applicable, of the Intestate Succession Act, to the
3 property of the decedent; and their relationship, if any, to the decedent; and
4 (10) A description sufficient to identify each tract of real property owned by the
5 decedent at the time of the decedent's death.
6 In those cases in which the affiant is the surviving spouse, is entitled to all of the property of
7 the decedent, and is not disqualified under G.S. 28A-4-2, the property described in this
8 subsection that may be collected pursuant to this section may exceed twenty thousand dollars
9 ($20,000) in value but shall not exceed thirty thousand dollars ($30,000) in value, after reduction
10 for any spousal allowance paid to the surviving spouse pursuant to G.S. 30-15. In such cases, the
11 affidavit shall state: (i) the name and address