WHO CAN MANAGE RESIDENTIAL PROPERTY IN NORTH CAROLINA?

Where would you even look to find the answer to this question?
Other than asking a knowledgeable landlord tenant attorney, or reading this blog (published by a knowledgeable landlord tenant attorney), the Real Estate Commission website has a lot of information for anyone who is interested in the regulation of real estate in North Carolina.


First Question: What is Property Management?

According to the NC Real Estate commission, the term "property management" encompasses a broad range of complex activities, it may in its simplest form be said to consist of (1) procuring suitable tenants for rental property, (2) collecting rents/security deposits, (3) providing for the care and maintenance of the leased premises, and (4) maintaining records regarding the property.

Second Question: Who Can Manage Real Property?

The list is pretty short: 1) a licensed realtor; 2)the property owner; 3) employees of the property owner if the owner is a corporation; 3)a manager in the owner's limited liability company (the manager means in the formal LLC sense, but they do not have to also be a member); and clerical, maintenance or janitorial personnel or other person~ who are not involved in the renting' or leasing of real estate.

Third Question: Who Is An Employee of the Owner?

To determine whether persons are regular employees of the property owner (as opposed to agents or independent contractors), the Real Estate Licensing Board applies the following tests:

Does the property owner personally exercise strict control and supervision over such persons?

Does the property owner compensate these persons on a salary basis rather than on a commission or transactional basis?

Does the property owner pay social security taxes on their earnings?

If the answer to any of these questions is "no", then a presumption is raised that the person is not, in fact, an employee of the property owner, and therefore a real estate license would be required in order for this person to handle real estate transactions for the owner.

Fourth Question: Can a Real Estate Broker Form a Management Company And Employ Unlicensed Individuals to Manage Property Under His Supervision?

In a word, NO.

Fifth Question: Is It Really A Big Deal If I Manage A Property Without Authority?

To act as an agent in the leasing or renting of real estate without the required license(s) is a criminal offense.


When employing a management company you should confirm that they are licensed to manage property in North Carolina. As a final thought, not all management companies are equally knowledgeable and effective. Make sure that they are experienced and keep abreast of the constantly changes laws and ordinances that affect your property and your tenants.


Norman D. Praet, Esq. - Assisting owners and managers of rental property.

Blogger Speaking at Triangle Apartment Affairs Meeting on September 22, 2011

What: Triangle Apartment Association: Independent Rental Owners Committee Meeting
Subject: Landlord Liability
When: September 22, 2010
Where: 3739 National Dr # 202
Raleigh, NC 27612-4844
(919) 782-1165

Norman D. Praet, Esq. presents the following:

LANDLORD LIABILITY; A property owner has a duty to provide their tenants a reasonably safe environment. This duty comes from a number of areas: 1) statutory law; 2) contract law; and 3) negligence law. Examples of statutory law are the landlord’s duties to provide fit premises as set out in N.C. Gen. Stat. 42-42. Contract law liability is based on the representations in your lease, and the implied warranties that surround the lease. Negligence claims (you had a duty and you breached it) include property defects, safety, and hiring. With all of these potential areas of liability a landlord must stay informed. I will address the potential legal pitfalls in these three areas and what you can do to avoid them.

Impact Fees for New Apartment Construction in Cary

The town of Cary is considering imposing impact fees on new multi-family construction despite Wake County's repeal of such fees because they stifle growth. You can read the Cary News article on the issue here.

If you are involved in the multi-family industry in Cary you should consider letting the Cary Town Council know what you think about these fees. You can find information about the Cary Town Council here. Just remember, if you don't try to make a difference you can't complain about the results.

Chapel Hill Rental Owners Beware!!! Again.

The following appeared yesterday on WRAL, they just don't make it very easy to re-post:

Chapel Hill to begin ticketing front-yard parkers


Chapel Hill, N.C. — Chapel Hill plans to start cracking down on people who park their cars in front yards, issuing two notices to homeowners before steep daily fines kick in.

The town's new Land Use Management Ordinance, which goes into effect Monday, prohibits parking areas from taking up more than 40 percent of the front yard. It also requires areas used for parking be paved or covered in gravel.

Residents who continue to park on the front lawn after Monday will receive two warnings, town officials said, before fines of $100 per day are imposed. Citations will be issued to property owners, not tenants.

The ordinance was passed to primarily address complaints about the unsightliness of front-yard parking on rental properties where multiple students live, officials said.

Some homeowners, however, think the town is overstepping its bounds.

"I pay taxes on this land," said Chapel Hill resident Louise Felix, who parks her pickup truck on the grass in her front yard every day.

"This is my yard, I should be able to park anything I want to park on it," she said.

Felix said she will not hesitate to sue if she receives a front-yard parking citation.

"I would take them to court... and I would not think another thing about it," she said.

Reporter: Adam Owens
Photographer: Bill Herrero
Web Editor: Bridget Whelan

Copyright 2011 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

New Court Fees for Evictions and Law Suits Starting July 1, 2011!

Justice gets a bit more expensive in North Carolina starting July 1, 2011.

New Fees:

Magistrate(eviction or small claims): $96

District Court(eviction appeals and collections above $5,000): $150

Endorsement of Original Summons and A & P Summonses: $15

Motions: $20

If you would like more information, the courts memo on fee changes can be found here, and the fee chart can be found here.

NEW PINE STRAW ORDINANCE IN DURHAM!

At the June 6 City of Durham Council Meeting the Council unanimously adopted a Pine Straw Ordinance.

The ordinance says that no pine straw or any other landscaping material with a fire rate of spread of more than 24 inches per minute shall be placed within 10 feet of buildings with combustible exterior construction. Town homes with common walls are included in this ordinance. One-and two-family dwellings are exempt from the ordinance which is consistent with the North Carolina Residential Building Code.

Starting July 1, 2011, businesses will be asked to come into compliance with the ordinance within 20 days. If a business experiences hardship with removing or distancing pine straw from the buildings, we are asking that they submit a letter to the Fire Prevention Division stating the need for the hardship request and a time frame for compliance with the ordinance.

For the possibility of a financial hardship(s) your property may have in getting the pine straw either moved farther away from the building (at least 10 feet) or having it removed, you should direct your written hardship to Assistant Fire Marshal Eddie Reid. His email address is Edward.Reid@durhamnc.gov or he can be reached at 919 -560-4233 ext. 19246.

For more information please visit City of Durham FAQ Pine Straw Ordinance.

Norm Praet, Esq.
North Carolina Landlord Tenant Lawyer

CONGRATULATIONS AANC! THE RESIDENTIAL BUILDING INSPECTIONS BILL IS NOW LAW!!

Congratulations to the Apartment Association of North Carolina, the Triangle Apartment Association, and all who supported the Residential Buildings Inspections Bill. On June 23, 2011, the Residential Inspections Bill, H 683 became law in North Carolina.

This bill was developed by the AANC in response to Raleigh's Probationary Rental Occupancy Ordinance, and other similar programs, that impose significant fees on landlords with little benefit to either the the landlords or tenants of North Carolina.

Key provisions of the law provide:

• A prohibition mandatory inspections/pre-occupancy inspections. The City of Durham made no attempt to hide the fact that they wanted a City-wide inspection program, and this law stops such proposals in their tracks.

• For many owner/operators, fees will drop by thousands of dollars per-property: only $50 for properties that have 20 or more rental units; $25.00 for properties that have 4 to 19 units; and $15 for properties with three or less units.

• Better yet, only cities with EXISTING registration programs can charge fees. At present, only the Town of Garner and City of Raleigh have such ordinances in place. Effective June 1, no other locality may create one -- another huge achievement!

Norm Praet, Esq.
North Carolina Landlord Tenant Lawyer

FREE: Mr. Landlord to Speak at TREIA Meeting: Free to Members and Guests

Jeffrey Taylor, Mr. Landlord, is speaking at this month's Triangle Real Estate Investors Association Meeting on June 21. This event is free to members and guests and the details from TREIA are as follows:


TREIA Monthly Meeting - Mr. Landlord

How to Fill Any Vacancy in 72 Hours For Top Market Rent, in a Competitive Market

Eliminate your landlording headaches! Do far more than just survive as a landlord. Jeffrey Taylor will show you how to fill your vacancies fast, even in a competitive market!

With real estate prices still low and many former homeowners who will need to rent due to foreclosures and other financial and credit related issues, there may not be a better time to purchase income properties to hold long-term to rent or offer rent-to-own opportunities. For an inexperienced investor, what could be one of their greatest financial moves could become their biggest nightmare without professional guidance.

If you are currently managing rental properties, are a successful real estate investor, or if you’re considering becoming a landlord, then you won’t want to miss Jeffrey’s presentation. He’ll completely transform the way you see landlording.
Download Flyer



Speaker Information:

Jeffrey Taylor is known nationwide as “Mr. Landlord,” and has taught thousands of real estate investors, landlords and managers how to fill their vacancies in just 72 hours and keep residents for 6 years.

He’s the author of the bestselling books The Landlord's Survival Guide & The Landlord's Kit. He’s America’s #1 landlording coach, a successful landlord with over 25 years experience and founder of MrLandlord.com, home of the most visited landlord Q&A website in the nation for rental owners.


Date and Time
Start Date: 06/21/2011 Start Time: 6:00 PM
End Date: 06/21/2011 Approx. End Time: 9:00 PM
Registration Deadline: 06/21/2011 Meet Time: 6:30 AM

Event Leader
Keith Turnbull
Contact Leader
919876688 H
919-673-3454 M

Event Cost
Prepayment Required
Pricing Option Name Price Deadline
Members Free 06/21/2011
Guests Free 06/21/2011

Location (More Detail)
Event Location: Hilton - North Raleigh
Address: 3415 Wake Forest Road , Raleigh , NC 27609-7330
Directions: From the Beltline: Follow I-440 to Exit #10 (Wake Forest Rd). Make Left at light off exit, hotel is 1/4 North on the left.

Although you will still need advice for landlording in North Carolina, Mr. Landlord has a lot to offer! It is definitely worthwhile to check him out.

Welcome Changes to the Homeowner/Homebuyer Protection Act

As many of you are probably aware, in 2010 a series of regulations was foisted on landlords who extended an option to purchase the rental property that they were leasing through a law known as the Homeowner and Homebuyer Protection Act, or SB 1015.

Well, it is now 2011 and the real estate investors are in a somewhat friendlier climate. Not sitting idly by, members of the Triangle Real Estate Investors Association and other NC REIA's have secured sponsorship of H654, revisions to the new Homeowner/Homebuyer Protection Act.

Some of the key provisions of the revisions to the Act include:

* Revising the definition of a lease agreement covered by the acts regulations to remove all leases that do not apply a portion of the rent to the option;

* Clarifies that a contract under which the potential purchaser is obligated to buy the property is not a covered option agreement;

* Clarifies that if the seller does not take any payments on the option prior to closing then a payment at closing does not create an equitable right of redemption;

* Allows an injured party to sue under the Unfair and Deceptive Trade Practices Act("UDTPA), but does not declare any violation of the Act an automatic violation of the UDTPA;

* The Act also makes some common sense changes to the requirements pertaining to Land Sale Contracts; and

* With respect to the so called "mortgage rescue scam protections" the Act provides that although a landlord who purchases a property from someone in foreclosure and allows them to remain as a tenant must obtain an appraisal on the property within 90 days of the purchase, he is no longer required to make sure the appraisal is delivered within 3 days of receipt.

This bill deserves your support.

Currently H 654 has passed through the House and is now in the Senate Commerce Committee. Please take some time and contact your local senators and members of the Senate Commerce Committee and let them know that you support H 654!

REVISITING RECAPTURE PROVISIONS IN NORTH CAROLINA LEASES!

How Recapture Works

It was a common stick and carrot method of encouraging compliance with your rules and it was included in very many leases. You give the tenant more favorable terms, such as reduced rent, if they follow the rules and pay on time. If the tenant at some point stops following the rules or paying on time you are entitled to reimbursement for all or a portion of the reduced rent returned to you. It is nice getting $25 taken off your rent each month, but it is very painful having to repay 10 months of the $25 concession at once.

This worked very well, for a while.

What Happened?

The State of North Carolina stepped in and once again inserted itself where it did not belong, in the landlord-tenant relationship. N.C. Gen Stat. 42-46 was passed setting maximum allowable fees by landlords. N.C. Gen. Stat. 42-46 provides:

(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.

You are probably wondering what this has to do with recapturing rent concessions.

Unfortunately the answer could be - everything. Due to the amounts in question there is not much case law interpreting North Carolina landlord tenant statutes. This means much of landlord tenant law in North Carolina is a role of the dice. There is currently a class action suit pending in Wake County asserting that recapture is a form of late fee and should be subject to the 5%/$15 set out above.

As you know, news tends to travel among tenants, and as soon as one brings a suit challenging this provision they will get others to join.

But wait, there's more.
It starts with Friday.

I usually like Fridays too but not in this case. In 2003 we learned from the North Carolina Court of Appeals that a "Landlord constituted a “debt collector,” as defined in the North Carolina Debt Collection Act (NCDCA), where landlord sought to recover past due rent and related charges", in Friday v. Union Dominion Realty Trust, Inc., 155 N.C.App. 671, 575 S.E.2d 532 (NC App. 2003). In Friday, the Court went on to hold that a violation of North Carolina's late fee law (NCGS 42-46) was also a violation of the Unfair and Deceptive Trade Practices Act (UDTPA). This is bad news because violations of the UDTPA allow a court to award treble damages and the tenant's attorneys fees. Therefore, if recapture of previous rent concessions violates the late fee statute it is also probably violates the UDTPA.

So, if you could be subjecting yourself to treble damages and having to pay the tenant's attorney's fees, are those recapture provisions really worth it? You would probably be better advised to cancel a concession rate (i.e. the rent increases from $800 to market rate of $875 after the violation) rather than attempting to recapture previous months preferential rate difference.

The court has not yet ruled on the Wake County class action, and if it is like most cases, it may not get to because the case will settle. However, it is likely that Legal Services is aware of this case as are other tenant's attorneys, so this issue will probably come up again.

The Anti-Prop Bill Needs Your Help Now More Than Ever!

Today from the Triangle Apartment Association:

Dear Industry Leaders,
As some of you are aware, SB 683 was pulled from the committee meeting yesterday. Sen Hunt is looking to amend language to potentially compromise with the bill’s opposition. To what extend, we are unsure at this time however the article below states that Sen Hunt may change language to include the allowance of “reduced fees”. TAA strongly believes there is no benefit or service that is attached to the fee nor has there been any justification as to where the fees are going- the bottom line TAA believes any fee imposed is an additional tax burden placed on renters!

PLEASE contact Senator Hunt 919.733.5850 or neal.hunt@ncleg.net & THANK him for his leadership on the bill & ask him to stay the course.

TAA is working on several things; rebuttal to the article below, letters to the editor, mobilizing members to contact Sen Hunt and TAA has contacted Sen Hunt’s office to get a quick meeting to share the last two years of Raleigh Rental Registration/enforcement data.

We need your HELP!! Please contact Senator Hunt & thank him for his leadership in sponsoring the bill and ask him to stay the course!! Please feel free to share with your groups and anyone that is impacted by this legislation!!

Thanks in advance for your immediate attention to this EXTREMELY important legislative initiative!

Showdown Thursday AM on Senate Bill 683, Residential Inspections - ANTI-PROP Bill!!

From our friends at the Triangle Apartment Association

Dear North Carolina Apartment Leader:

We are on the calendar in the Senate Commerce Committee on Thursday at 11:00 for the Apartment Association-sponsored bill - Senate Bill 683 - that would curb random/mandatory/universal/systematic inspections of rental housing by municipal officials. We need you to contact the members of the N.C. Senate Commerce Committee - attached - and urge them to support the bill. Note that if this bill does not make it out of Committee, it cannot be considered by the full Senate.



**Owners & Operators in Raleigh & other localities that charge rental registration fees- this legislation will save you hundreds & in some cases thousands of dollars!!**



The Inspection Bill Talking Points are attached, and they should help you frame the issue - in your own words - in communicating with the Senate Committee Members. We favor Senate Bill 683 because it is what we stand for in delivering affordable and efficient housing. Our message is, "Inspections of sound housing are a waste of time and money."



* Please contact Senate Commerce Committee Members & ask them to Support Senate Bill 683.
* Tell the General Assembly Members that the apartment industry offers a much needed service by providing housing to citizens who, either by choice or other circumstances. may not want to or able to purchase a home. Local governments are forcing property owners to register rental units and in some cases submit to annual periodic inspections by government personnel in addition to requiring occupancy permits (PROP) at the discretion of governmental officials.
* Fees associated with these programs are usually far beyond the actual cost and only drive up the cost of affordable rental housing. Most local governments already have regulations on the books that address code issues and if existing laws were enforced, there would be no need for new rental regulations.



Please contact the Senators via phone or e-mail TODAY. If you have limited time please prioritize and contact the Triangle delegation committee members, those members are highlighted in yellow in the attached Senate Commerce Committee list. Leave a message with their Legislative Assistant. Parlay any relationships you may have with the Senators. Emphasize that you live in or have properties in their District. Please pass this alert on to as many apartment professionals as you can TODAY. The cities and housing advocates are mustering a campaign against the Bill, so we need to mount a strong, widespread industry blitz of support. Can we count on you? Thank you.

NORTH CAROLINA BED BUG BILL NEEDS YOUR SUPPORT!

The following is a call to action sent out by the Triangle Apartment Association today requesting that all landlords act to support the Bed Bug Bill. Here it is:



House Bill 721 is being heard in the House Commerce & Job Development Committee (tomorrow) Wednesday, June 1 at 10:00AM.



HB 721 attempts to clarify North Carolina public policy by articulating certain duties and “safe harbors” for the respective parties:

Landlords shall not knowingly lease apartments with Bed Bug problems;

Tenants have a duty to report any Bed Bug infestation within 5 days of suspecting it;

Landlords may obtain an inspection from a licensed pest control company that a dwelling unit is Bed Bug-free; such inspection is conclusive evidence for Landlord compliance with the law;

When inspection reports are issued to Landlords, subsequent infestation treatment is assumed to be the Tenant’s responsibility;

Tenants in so-called “source apartments” may be responsible for infestation treatment in adjacent apartments;

Failure of Tenants to comply can result in a.) Landlord contracting for an infestation treatment and billing the Tenant; b.) termination of the tenancy; or c.) pursuit of damages.

We encourage all TAA members (and interested landlords) to contact Committee members and ask them to support the bill. Below please find talking points and a list of contact information for all House Commerce & Job Development Committee Members.

Landlord Tenant Bedbug Liability Talking Points

Bedbugs are a increasingly persistent threat to public health, and incidents of bedbug infestation are increasing across the state;

Current law offers little guidance or clarity on issues of liability and landlords are often left to deal with unreported infestations;

Unreported infestations are much more costly to mitigate, and can spread to adjacent units, leading to higher housing costs statewide;

This legislation would prohibit landlords from offering for lease or entering into a rental agreement for any premises that the landlord knows to be infested by bedbugs;

Landlords are responsible for providing safe and healthy conditions for their tenants; however, tenants also have a responsibility to maintain healthy conditions;

House Bill 721 recognizes the limits of current science regarding bedbugs, by allowing landlords to seek an inspection before a unit is rented or requiring them to treat any bed bugs within a 60-day grace period in newly rented units;

House Bill 721 also provides incentives to tenants to be mindful of infestation symptoms and report infestations quickly, leading to lower mitigation costs and reduced risk of infestations spreading.


House Commerce and Job Development Committee
2011-12 Members

Representative Daniel F. McComas, Chair
New Hanover County
919-733-5786
Danny.McComas@ncleg.net

Representative William Brawley, Vice Chair
Mecklenburg County
919-733-5800
Bill.Brawley@ncleg.net

Representative D. Craig Horn, Vice chair
Union County
919-733-2406
Craig.Horn@ncleg.net

Representative Carolyn H. Justice, Vice Chair
New Hanover, Pender Counties
919-715-9664
Carolyn.Justice@ncleg.net

Representative Tim D. Moffitt, Vice Chair
Buncombe County
919-715-3012
Tim.Moffitt@ncleg.net

Representative Phil R. Shepard, Vice Chair
Onslow County
919-715-9644
Phil.Shepard@ncleg.net

Representative Fred F. Steen, II, Vice Chair
Rowan County
919-733-5881
Fred.Steen@ncleg.net

Representative Mike C. Stone, Vice Chair
Harnett, Lee Counties
919-715-3026
Michael.Stone@ncleg.net

Representative Alma Adams
Guilford County
919-733-5902
Alma.Adams@ncleg.net

Representative Kelly M. Alexander, Jr.
Mecklenburg County
919-733-5778
Kelly.Alexander@ncleg.net

Representative Marilyn Avila
Wake County
919-733-5530
Marilyn.Avila@ncleg.net

Representative Larry M. Bell
Sampson, Wayne Counties
919-733-5863
Larry.Bell@ncleg.net

Representative James L. Boles, Jr.
Moore County
919-733-5903
Jamie.Boles@ncleg.net

Representative Glen Bradley
Franklin, Halifax, Nash Counties
919-733-5860
Glen.Bradley@ncleg.net



Representative Marcus Brandon
Guilford County
919-733-5825
Marcus.Brandon@ncleg.net

Representative Larry R. Brown
Davidson, Forsyth Counties
919-733-5607
Larry.Brown@ncleg.net

Representative Harold J. Brubaker
Randolph County
919-715-4946
Harold.Brubaker@ncleg.net

Representative Becky Carney
Mecklenburg County
919-733-5827
Becky.Carney@ncleg.net

Representative Jeff Collins
Nash County
919-733-5802
Jeff.Collins@ncleg.net

Representative Bill Cook
Beaufort, Pitt Counties
919-733-5906
Bill.Cook@ncleg.net

Representative William A. Current, Sr.
Gaston County
919-733-5809
Bill.Current@ncleg.net

Representative Jerry C. Dockham
Davidson County
919-715-2526
Jerry.Dockham@ncleg.net

Representative Nelson Dollar
Wake County
919-715-0795
Nelson.Dollar@ncleg.net

Representative Jean Farmer-Butterfield
Edgecombe, Wilson Counties
919-733-5898
Jean.Farmer-Butterfield@ncleg.net

Representative Elmer Floyd
Cumberland County
919-733-5959
Elmer.Floyd@ncleg.net

Representative Dale R. Folwell
Forsyth County
919-733-5787
Dale.Folwell@ncleg.net

Representative Phillip Frye
Avery, Caldwell, Mitchell, Yancey Counties
919-733-5661
Phillip.Frye@ncleg.net

Representative Ken Goodman
Montgomery, Richmond Counties
919-733-5823
Ken.Goodman@ncleg.net

Representative Charles Graham
Robeson County
919-715-0875
Charles.Graham@ncleg.net

Representative Mike Hager
Cleveland, Rutherford Counties
919-733-5749
Mike.Hager@ncleg.net

Representative Susi H. Hamilton
New Hanover County
919-733-5754
Susi.Hamilton@ncleg.net

Representative Kelly E. Hastings
Cleveland, Gaston Counties
919-715-2002
Kelly.Hastings@ncleg.net

Representative Dewey L. Hill
Brunswick, Columbus Counties
919-733-5830
Dewey.Hill@ncleg.net

Representative Bryan R. Holloway
Rockingham, Stokes Counties
919-733-5609
Bryan.Holloway@ncleg.net

Representative Maggie Jeffus
Guilford County
919-733-5191
Maggie.Jeffus@ncleg.net

Representative Linda P. Johnson
Cabarrus County
919-733-5861
Linda.Johnson2@ncleg.net

Representative Stephen A. LaRoque
Greene, Lenoir, Wayne Counties
919-715-3017
Stephen.LaRoque@ncleg.net

Representative David R. Lewis
Harnett County
919-715-3015
David.Lewis@ncleg.net

Representative Marvin W. Lucas
Cumberland County
919-733-5775
Marvin.Lucas@ncleg.net

Representative Darrell G. McCormick
Iredell, Surry, Yadkin Counties
919-733-5654
Darrell.McCormick@ncleg.net

Representative Marian N. McLawhorn
Pitt County
919-733-5757
Marian.McLawhorn@ncleg.net

Representative Rodney W. Moore
Mecklenburg County
919-733-5606
Rodney.Moore@ncleg.net

Representative Tom Murry
Wake County
919-733-5602
Tom.Murry@ncleg.net

Representative Bill Owens
Camden, Currituck, Pasquotank, Tyrrell
919-733-0010
Bill.Owens@ncleg.net

Representative Diane Parfitt
Cumberland County
919-733-9892
Diane.Parfitt@ncleg.net

Representative Garland E. Pierce
Hoke, Robeson, Scotland Counties
919-733-5803
Garland.Pierce@ncleg.net

Representative Ray Rapp
Haywood, Madison, Yancey Counties
919-733-5732
Ray.Rapp@ncleg.net

Representative Efton M. Sager
Wayne County
919-733-5755
Efton.Sager@ncleg.net

Representative Ruth Samuelson
Mecklenburg County
919-715-3009
Ruth.Samuelson@ncleg.net

Representative Norman W. Sanderson
Craven, Pamlico Counties
919-733-5853
Norman.Sanderson@ncleg.net

Representative Mitchell S. Setzer
Catawba, Iredell Counties
919-733-4948
Mitchell.Setzer@ncleg.net

Representative Timothy L. Spear
Chowan, Dare, Hyde, Washington Counties
919-715-3029
Tim.Spear@ncleg.net

Representative Edgar V. Starnes
Caldwell County
919-733-5931
Edgar.Starnes@ncleg.net

Representative Joe P. Tolson
Edgecombe, Wilson Counties
919-715-3024
Joe.Tolson@ncleg.net

Representative John A. Torbett
Gaston County
919-733-5868
John.Torbett@ncleg.net

Representative William L. Wainwright
Craven, Lenoir Counties
919-733-5995
William.Wainwright@ncleg.net

Representative Edith D. Warren
Martin, Pitt Counties
919-715-3023
Edith.Warren@ncleg.net

Representative Harry Warren
Rowan County
919-733-5784
Harry.Warren@ncleg.net

Representative Roger West
Cherokee, Clay, Graham, Macon Counties
919-733-5859
Roger.West@ncleg.net

Representative W. A. (Winkie) Wilkins
Durham, Person Counties
919-715-0850
Winkie.Wilkins@ncleg.net

Representative Larry Womble
Forsyth County
919-733-5777
Larry.Womble@ncleg.net

Representative Michael H. Wray
Northampton, Vance, Warren Counties
919-733-5662
Michael.Wray@ncleg.net



Please contact committee members as soon as possible & urge them to support House Bill 721! Thank you for taking action on this very important apartment industry legislative priority!

RENTAL REGISTRATION COMING TO DURHAM!

Not to be outdone, Durham is getting ready to introduce its own version of Raleigh's Probationary Rental Occupancy Permit Ordinance (or "PROP"), as a three-year inspection program. According to the article below there would not be a fee, the City of Durham is taking suggestions on how the program is to be structured until year's end, and the program would roll out beginning in July 2012.

If I was a betting man, and I am, I would put good money on this "no fee" program becoming a fee based program within the next five years, and one more tax on local landlords. For that matter if it is a no fee program then everyone pays. The city already has the ability to inspect units where complaints have been made. This coupled with the fact that no one is told who to rent from and where to live, make this program unnecessary at best.

There is currently a bill pending in both houses of the North Carolina General Assembly that would make this program illegal. This bill is H 554 in the House, and S 683 in the Senate.

If you wish to stop this proposed Durham Rental Inspection the first thing you should do is contact your local legislators and let them know you support these bills. The second thing you can do is to contact Durham and give them your input.

Here is the article that ran in the N&O and the Durham News:
Durham to crack down on subpar rentals - Durham County - NewsObserver.com

If you are frustrated by the one-sided slant of this article you are not alone!

Who Can Manage Real Property In North Carolina?

Where would you even look to find the answer to this question?
Other than asking a knowledgeable landlord tenant attorney, or reading this blog (published by a knowledgeable landlord tenant attorney), the Real Estate Commission website has a lot of information for anyone who is interested in the regulation of real estate in North Carolina.


First Question: What is Property Management?

According to the NC Real Estate commission, the term "property management" encompasses a broad range of complex activities, it may in its simplest form be said to consist of (1) procuring suitable tenants for rental property, (2) collecting rents/security deposits, (3) providing for the care and maintenance of the leased premises, and (4) maintaining records regarding the property.

Second Question: Who Can Manage Real Property?

The list is pretty short: 1) a licensed realtor; 2)the property owner; 3) employees of the property owner; 3)a manager in the owner's limited liability company (the manager means in the formal LLC sense, but they do not have to also be a member); and clerical, maintenance or janitorial personnel or other person~ who are not involved in the renting' or leasing of real estate.

Third Question: Who Is An Employee of the Owner?

To determine whether persons are regular employees of the property owner (as opposed to agents or independent contractors), the Real Estate Licensing Board applies the following tests:

Does the property owner personally exercise strict control and supervision over such persons?

Does the property owner compensate these persons on a salary basis rather than on a commission or transactional basis?

Does the property owner pay social security taxes on their earnings?

If the answer to any of these questions is "no", then a presumption is raised that the person is not, in fact, an employee of the property owner, and therefore a real estate license would be required in order for this person to handle real estate transactions for the owner.

Fourth Question: Can a Real Estate Broker Form a Management Company And Employ Unlicensed Individuals to Manage Property Under His Supervision?

In a word, NO.

Fifth Question: Is It Really A Big Deal If I Manage A Property Without Authority?

To act as an agent in the leasing or renting of real estate without the required license(s) is a criminal offense.


When employing a management company you should confirm that they are licensed to manage property in North Carolina. As a final thought, not all management companies are equally knowledgeable and effective. Make sure that they are experienced and keep abreast of the constantly changes laws and ordinances that affect your property and your tenants.


Norman D. Praet, Esq. - Assisting owners and managers of rental property.

BED BUG BILL: TAKING THE GUESS WORK OUT OF BED BUGS!

Unless you have been living under a rock you know that those tiny little bed bugs are a big problems for landlords, both large and small. Getting rid of the bed bugs is currently only the first part of the problem. For a landlord dealing with the costs of extermination and the costs of damages to the tenant and surrounding tenants can be almost as big a headache as the bugs themselves.

This is amplified because there is no statutory framework to guide the courts in how they should deal with this issue. Given the court's tendency to rule in favor of tenants there is a very real risk that landlords will be found to have breached their duty to provide habitable premises if bed bugs are found. This is particularly unjust because the odds of a landlord causing a bed bug outbreak are very small.

The Apartment Association of North Carolina has come up with a solution to the uncertainty in House Bill 721.


What does the bill do?
The main part of he bill is as follows:

"§ 42‑43.1. Bedbug infestation; landlord and tenant obligations.

(a) A tenant shall notify his or her landlord, in writing, within five days of suspecting the presence of any infestation of the species cimex lectularius, also known as bedbugs. If the landlord did not obtain a certificate from a licensed pest control company as provided in G.S. 42‑42(a)(9), and the tenant took initial possession of the premises less than 30 days before the written notification was given, then, within five days of receiving the notice from the tenant, the landlord shall contract with a licensed pest control company to exterminate any bedbugs in the premises. If the landlord did obtain a certificate from a licensed pest control company as provided in G.S. 42‑42(a)(9), or if at least 30 days have passed since the tenant took initial possession of the premises, it shall be the tenant's responsibility to have the bedbugs in the premises exterminated.

(b) Where the tenant is responsible for the extermination of bedbugs, the landlord may provide the tenant with either the name, address, and telephone number of the licensed pest control company that certified the premises were free of an infestation of bedbugs or with the name, address, and telephone number of pest control companies that the landlord deems reputable. Within seven days of notifying the landlord of the suspected presence of bedbugs, the tenant shall do both of the following: (i) contract with one of the licensed pest control companies suggested by the landlord or, if no companies were suggested, with any licensed pest control company, and (ii) have the premises treated for bedbugs by the licensed pest control company. In all situations, the tenant shall allow the landlord and the licensed pest control company access to the premises and shall carefully follow all instructions provided by the landlord or licensed pest control company to facilitate the elimination of bedbugs. Where the tenant is responsible for the extermination of bedbugs, the tenant shall be solely responsible for any fees charged by the licensed pest control company and any damages associated with the presence and elimination of bedbugs from the premises and any attached units and spaces, and the tenant shall furnish to the landlord proof from the licensed pest control company of the services performed.

(c) After a licensed pest control company has treated the premises and deemed the premises free of an infestation of bedbugs, the tenant shall be responsible for all subsequent infestations. However, whenever a tenant notifies the landlord of the presence of bedbugs, if it is determined by a licensed pest control company that the source of the bedbugs is an adjacent unit, then the tenant in the source unit shall be responsible for the extermination of the bedbugs in accordance with the provisions of this section.

(d) The failure of any tenant to comply with the provisions of this section shall be a breach of the tenant's obligations under G.S. 42‑43(a)(8), and the landlord may do any or all of the following: (i) contract with a licensed pest control company at the tenant's expense to exterminate the bedbugs; (ii) terminate the tenant's tenancy; or (iii) pursue a cause of action against the tenant for damages."

The bill also includes complying with the new statute as part of a landlord's responsibilities under NC. Gen. Stat. 42-43(a), and allows a landlord to deduct from the security deposit if the tenant fails to comply.

Where is the bill now?
On May 18, 2011, the bill was assigned to the Subcommittee of Business and Labor within the Committee on Commerce and Job Development.

What can I do now about bed bug liability?
You probably can't make any changes affecting your current unexpired leases. However, all expired tenancies are fair game for bed bug provisions. Until this bill is passed a landlord's best bet is to use a Bed Bug Lease Addendum detailing the responsibilities of the landlord and the tenant in the event bed bugs are discovered on the rental premises. AANC is preparing a Bed Bug Lease Addendum for its members that should be available shortly! If you are not an AANC or TAA member you should use the same care in preparing this addendum that you do in preparing your lease!

LANDLORD TENANT LAW CHANGES DESIGNED TO LEVEL THE PLAYING FIELD

House Bill 493 is advancing! To most readers that probably sounds about as interesting as "Blah Blah Blah, Blah Blah." If you are a landlord or property manager in North Carolina you will want to become more informed about H493 and possibly make a telephone call or two supporting it.

Why You Should Care.
As many of you are aware there is not exactly a level playing field when you get to court with under North Carolina landlord tenant laws as they are generally applied. The laws have been drifting towards the tenants for some time now. It was determined that the current political make-up of the state legislature made it a good time to try and change that. So far I have written about the Anti-Prop bill here. There are several other bills in addition to the Anti-Prop that have been introduced with the assistance of the Apartment Association of North Carolina and local affiliates such as the Triangle Apartment Association, to make life just a little easier for the North Carolina landlords.

Back to the topic at hand: H493-Landlord Tenant Changes:

This bill addresses several sections of the North Carolina Landlord Tenant Law, N.C. Gen. Stat. 42.

What Does H493 Change?
The changes proposed in H493 include:

d. Requiring tenant to pay into court amounts to cover landlord’s “reasonable damages” and costs upon appeal of summary ejectment action;
e. Allowing clerk to issue writ of possession if tenant is five days late on undertaking for appeal;
f. Reducing time for tenant to collect property after eviction from ten to five days;
g. Landlord’s acceptance of partial rent payment is no longer a defense to eviction action for holdover; and
h. Providing for a “cleaning fee” in vacation rentals.

The following proposed changes were removed by the committee:

a. Expediting securing of rental premises after death of sole tenant;
b. Allowing landlord to give dead tenant’s property to next of kin;
c. Providing for service of summons by “authorized process server,” and not just “sheriff;”

Where is H493 now?
H493 is currently scheduled for discussion and a vote by the entire House on May 16, 2011.

What Can I Do?
You can show your support by contacting your local house representative and letting them know that you are in favor of the bill and that you would like them to support it too.

CAN A RESIDENTIAL LANDLORD ENFORCE AN ACCELERATION CLAUSE IN THEIR LEASE?

I recently had an out of state owner of North Carolina rental property retain me to answer this question, which would seem to be a fair question. Mortgages have accelerations clauses as do many other loans, why not a residential lease.

I will start out by answering the first question some of you may have, namely “what is an acceleration clause?” An acceleration clause in this instance is a lease provision that would accelerate all the rent due over the term of the lease to be due immediately upon a breach of the lease.

There is no statutory law “on point” regarding acceleration clauses in residential leases. It is not specifically mentioned in Chapter 42 (the Landlord/Tenant Statutes) or in Chapter 75 (Unfair and Deceptive Trade Practices Statues). So we need to look a little deeper. Essentially, the acceleration clause frees a landlord from his duty to mitigate (or reduce) his damages and accelerates the collection process. The law in North Carolina is that the non-breaching party to a residential lease contract has a duty to mitigate his damages upon breach of such contract. Allowing a landlord to accelerate the rent due upon the tenant’s breach would release the landlord from this duty to mitigate. The North Carolina Court of Appeals has held that it is lawful for a commercial landlord to negotiate a lease that negates his duty to mitigate. The Court made clear that it found these contract provisions enforceable because they believe commercial parties to be of equal bargaining power. The Court specifically stated that this reasoning did not extend to “such a clause in a residential lease, which presents an entirely different situation.”

The court would likely find an acceleration clause in a residential contract to be unenforceable as a violation of public policy. The North Carolina courts and legislature take a much more “paternalistic” approach to residential tenants, because they believe that residential tenants are in a signif icantly weaker bargaining position relative to property owners. This is likely because neither the judges nor the legislators have been residential tenants for quite some time. As an example, the Court of Appeals found a landlord who attempted to collect fees that he was not owed (a late fee that was $1 in excess of the 5% statutory late fee cap) violated both the state’s Unfair & Deceptive Trade Practices Act and the North Carolina Debt Collectors Act. Violations of these acts may result in an award to the tenant of treble damages or a $2,000.00 fine, and attorneys’ fees. Further, if the court finds that in applying an acceleration clause a landlord has wrongfully withheld a security deposit, the tenant may be awarded attorneys’ fees.

Rather than attempting to enforce an acceleration clause, it is a much better policy to obtain the maximum security deposit, use a good lease that provides for all the fees to a tenant allowed by North Carolina tenancy law, and not hesitate to file a legal action to enforce the lease immediately upon default.

TRIANGLE APARTMENT ASSOCIATION'S TRADE SHOW IS THIS WEDNESDAY, APRIL 27!!

If you are a Triangle area property owner this is one of the must attend events each year:

TAA Annual Trade Show

Wednesday, April 27, 2011

5:00-8:30pm
Member price is $25; Non Member price is $35
Exposition Center, NC State Fairgrounds, Raleigh

Who is the Triangle Apartment Association(TAA)?

Here is the thumbnail sketch that they provide about themselves:

The Triangle Apartment Association is a non-profit trade association serving the multifamily rental housing industry. Our members are comprised of individuals and companies who develop, own, manage, and provide goods and services to the apartment industry in the Raleigh-Durham-Chapel Hill area.

The TAA focuses its efforts in the following four areas:

 serving the rental housing industry by providing education for professional development

 protecting the interests of rental housing providers through legislative advocacy

 fostering business partnerships, and

 participating in the betterment of the Triangle and surrounding communities

TAA At a Glance

 Founded: 1984
 Member Companies: 825
 Apartment Communities: 406
 Management Companies: 119
 Independent Rental Owners: 57
 Vendor/Suppliers: 243
 Total Member Dwellings: 97,435
 Resident Population: 194,870

Now I am going to put in my two cents about the TAA:

The TAA is a great group of people work hard to make your life as a property owner easier! They have many educational opportunities to keep you up to date and out of trouble, and they are active both politically and legislatively. They are politically active through their Political Action Committee and they both keep on top of, and work to help shape, local regulations. The TAA is active legislatively through their parent organization the Apartment Association of North Carolina (in which you automatically are eligible for membership if you join the TAA). The legislation they sponsor greatly assists property owners of all sizes! CherylAnn Houseman is the Government Affairs Director at the TAA and she is a great person and a great resource for you, the property owner.

Also, Valli Gibson, the Member Services Coordinator, is very helpful on all of your day to day membership needs. Everyone at the TAA is great, these two women are the ones that I work with most often.

One other quick point, the TAA is there for you if you are a large property owner or if you have just one unit. If you are on the smaller side there is a sub-group called IROC or the Individual Rental Owners Committee, focused on the interests specific to smaller owners.

I cannot say enough good things about these people or this organization. If you are unfamiliar with them go to event on Wednesday and their website at http://www.triangleaptassn.org/displaycommon.cfm?an=1.

LANDLORDS BEWARE THE NORTH CAROLINA UNFAIR AND DECEPTIVE TRADE PRACTICES ACT!!!

The Unfair and Deceptive Trade Practices Act (UDTPA) as it relates to landlords is one of the biggest areas of potential liability for North Carolina landlords.

What is the Unfair & Deceptive Trade Practices Act?

The Unfair & Deceptive Trade Practices Act is kind of like the legal equivalent of a Swiss Army Knife for going after a business. It can be used for just about anything. The UDTPA declares unlawful “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.”

If we were to break it up it goes kind of like this:

(1) An unfair or deceptive act or practice;
(2) In or affecting commerce; which
(3) Proximately caused actual injury to the claimant or his business

Additionally, if you want to read the actual language of the UDTPA it begins at N.C.G.S. 75-1.


What does this have to do with being a landlord?

Sadly, the answer is plenty. The NC Court of Appeals has held that “Residential rental agreements fall within Chapter 75 because ‘the rental of residential housing is’ considered commerce pursuant to N.C. Gen.Stat. § 75-1.1.” Incidentally, the Act affects commercial landlords too.

Actions or inactions within the landlord-tenant relationship that may violate the UDTPA include:

1. Failing to maintain rental property in a “fully” habitable condition and continuing to demand rent. The North Carolina Appellate Court has held that collecting rent after having knowledge of the uninhabitable nature of part of a rental unit (water leaking in one of the bedrooms and the living room) constituted unfair trade practices and was thus a violation. The actual amount of “uninhabitability” of the premises that will trigger a UDTPA violation will be a fact sensitive question for each individual case;
2. Attempting to force a tenant out without filing for eviction by cutting off water and electricity to the rental unit (this is also a violation of the Ejectment of Residential Tenants Act);
3. Renting a property that you only have an option to purchase; and
4. Attempting to collect money you are not entitled to, or using means prohibited by the North Carolina Debt Collections Act.

Hopefully if you are smart enough to read this article you would not even think of doing anything that would violate numbers 2 and 3 above. These should be big red flags.

With respect to paragraph 4, you need to be familiar with at least the North Carolina Debt Collection Practice Act, N.C.G.S. 42-46 (which regulates the amount of late fees and court appearance fees), and your lease.

Paragraph number 1, regarding habitability issues, is a little more tricky and will require that you are familiar with N.C.G.S. 42-42 (which addresses a landlord’s responsibility to provide fit premises), your lease, any other local, federal, or state regulations that may apply to your rental unit, and most importantly common sense.

What if you didn’t mean to do anything wrong?

Unfortunately, the answer is: Too Bad. The North Carolina courts have held that the intent of the defendant is irrelevant, even if he is acting in good faith.

Ok, so we know what the act is, why is it so scary?

The UDTPA provides for mandatory recovery of treble damages if the court finds a violation of the statute. Additionally, if facts also support recovery for punitive damages, the plaintiff may allege both, but the recovery is limited to one or the other. Further, the court may award reasonable attorney’s fees to the attorney representing the prevailing party when the losing party willfully engaged in the unfair practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit.

If you have any questions or comments feel free to post or send me an e-mail.

Fair Housing Act and Childern in North Carolina

The other day one of my clients called and asked the following QUESTION:

"Can I refuse to rent a North Carolina property to a tenant because they have too many children?"

My insightful ANSWER was:

No. You may limit the maximum number of occupants, but you may not specifically limit the number of children.

Limiting the number of children is a violation of the State Fair Housing Act. It is considered discrimination based on "familial status."

The State Fair Housing Act provides in pertinent part:

§ 41A‐4. Unlawful Discriminatory Housing Practices.

(a) It is an unlawful discriminatory housing practice for any person in a real estate
transaction, because of race, color, religion, sex, national origin, handicapping
condition, or familial status to:
(1) Refuse to engage in a real estate transaction;
(8) Otherwise make unavailable or deny housing.

The Act defines "familial status" at N.C. Gen. Stat. Sec. 41A-3 :

"Familial status" means one or more persons who have not attained the age of 18 years being domiciled with:

a. A parent or another person having legal custody of the person or persons; or
b. The designee of the parent or other person having custody, provided the designee has the written permission of the parent or other person.

The protections against discrimination on the basis of familial status shall apply to any person who is pregnant or is in the process of securing legal custody of any person who has not attained the age of 18 years.

And just in case you were doubting that the act covered rental property, it defines "real estate transaction":

“Real estate transaction” means the sale, exchange, rental, or lease of real
property.

Generally if you are in doubt with respect to Fair Housing Act violations it is better to be safe than sorry. It is always a good idea to consult with someone knowledgeable about the Fair Housing Act.


Norm Praet, Esq.
Helping clients realize goals while minimizing risks.

SECOND UPDATE: The Anti-PROP Bill has landed!!!

I received the following exciting news from the Triangle Apartment Association. If you are a landlord in North Carolina you should be aware of this this bill! The initial information we have is as follows:

The opportunity that we have been waiting for is upon us- Residential Building Inspections- a.k.a. - the bill that will preempt onerous rental regulations such as; Municipal Rental Registration, Rental Inspection & PROP will be presented in the House Rules Committee Meeting (11AM-TODAY) –the Committee will vote on whether to introduce the bill. This is a new procedure and basically it means that the leadership supports the bill and they will introduce it from the committee. The bill has not been released to the General Assembly but they know the title is " Residential Building Inspections".

Over the last several years, local municipalities have targeted the multifamily rental housing community by enacting onerous & taxing ordinances such as the City of Raleigh ’s Rental Registration & PROP ordinances. As you are all aware many other municipalities are now considering enactment due to budget holes and to justify the existence of local government personnel- most recently displayed in the Clayton proposal.

If enacted this bill will be one of the BIGGEST success stories for the NC Apartment Industry! However, as you are well aware most bills see little movement & action much less enactment.

4/3/2011- The bill is now identified as: H554 Residential Building Inspections. It was filed March 30, 2011, and passed its first reading and was referred to the Committee on Commerce and Jobs.

Further Smoke Detector Legislaton

The laws of the United States of America and this fine state of North Carolina are full of examples of "over" legislation in an attempt to "idiot proof" society.

On March 16, 2011, a bill entitled SB 354-Rental Property/Lithium Battery Smoke Alarms was filed. SB354 would be inserted into N.C.G.S. Sec. 42-42, the "Landlord Responsibilities Statute" and would require landlords to provide 10 year lithium battery smoke alarms when installing new, or replaceing broken, smoke detectors or alarms except where:

1) The dwelling unit is equipped with a hardwired smoke alarm with a battery backup; or
2) The dwelling unit is equipped with a smoke alarm combined with a carbon monoxide alarm that meets the requirements provided in subdivision (7) of this section.

This law is probably not awful, but it is probably not necessary either, and will just add to the costs of landlords, particularly smaller landlords who do not own large new complexes where all the alarms are hardwired. It appears that the biggest winners from the law will be the makers of 10 year lithium batteries and of smoke alarms.

If you are against this legislaton I suggest that you contact your state legislator and let them know.

Assisting clients to efficiently realize their goals while minimizing there risks. I am,

Norm Praet, Esq.

BLOGGER NORM PRAET LIVE AND IN PERSON AT THE TREIA VENDOR FAIR ON MARCH 22, 2011

Yours truly will be presenting "KEEPING IT CLEAN: 10 LAWS, RULES AND REGULATIONS YOU SHOULD BE AWARE OF!!!" on March 22, 2011 at the Triangle Real Estate Investors Association Networking and Vendor Fair.

When:

6:00 pm – 9:30 pm
I will be speaking at 8:00 p.m.

Where:

Hilton, North Raleigh
3415 Wake Forrest Rd.
Rleigh, NC

What:

Networking and Vendor Fair

Who:

The Triangle Real Estate Investors Association is a great group of real estate investors that has a very busy calendar with one general meeting and several more specialized meetings each month. In their own words:

What is the Triangle Real Estate Investors Association all about?

In its own words:

The mission of the Triangle Real Estate Investors Association is to provide education, training, services and opportunities for both the novice and experienced real estate investor, while promoting high standards of ethics and a positive influence in our community.

You can find out more about the Triangle Real Esate Investors Association at www.treia.com.

State Worried About Bed Bug Vigilantes!

The North Carolina Department of Agricultural & Consumer Services recently stated in its NC Agricultural Review that:

In the past decade, bedbugs have made a comeback across the U.S. and in North Carolina. There are several reasons for this resurgence, including an increase in international travel and commerce, high tenant turnover in apartments, and changes in pesticide use and insecticide resistance.

Agriculture Commissioner Steve Troxler advises homeowners and business owners to be aware that the effective treatment of a bedbug infestation can be costly, and they should be wary of promises of low-cost remedies.

"Bedbugs generally cannot be controlled effectively with do-it-yourself measures," Troxler said. "And many times they can't be effectively controlled with just a single visit by a pest management professional. It's important for consumers to be careful in choosing a pest management company to address bedbug problems."

You can find the full article at here.

The lesson appears to be don't just let anyone kill your bugs!

Whoever you use for pest control, as a landlord you should be developing a bed bug policy and lease rider. Whether you have one unit or one thousand units, there is significant cost in dealing with bed bugs, and your lease or lease addendum should discuss who will bear this cost, and how inspections will be done.

At a recent meeting of Triangle Apartment Association's Government Affairs Committee meeting it was decided that a Bed Bug Addendum would be made available to members of that organization. You will also want to check the Apartment Association of North Carolina for their postings on bed bug developments. As always, education is your best investment and joining these organizations will page huge dividends!

Assisting property owners' and managers to realize their goals and minimize their risks. I am

Norm Praet, Esq.
Stark Law Group, PLLC
(919) 490-5550

Wage Garnishment Coming to NC?

Many landlords that I talk to complain about the difficulty of collecting judgments in North Carolina. That could become a little bit easier if the Allow Wage Garnishments to Satisfy Judgments, House Bill 30, passes. The name is not all that clever but it lets you know what the bill is intended to do. House Bill 30 was introduced on February 2, 2011 by Representative T. Moore and is expected to be heard in the Judiciary Committee shortly.

Below is a call to action sent out by the Triangle Real Estate investors Association today in conjunction with the Triangle Apartment Association. I have worked with wage garnishment in New York and New Jersey and it is not the guarantee of payment of a judgment that some may hope, but wage garnishments are helpful. I would echo the message below and suggest you contact the Judiciary Committee members and your local state Senator and House Representative and let them know you support the bill.





Garnishment of Wages Support

(HB 30)

The Judiciary Subcommittee will be hearing HB 30- Garnishment of Wages- Judgments in Civil Actions Bill on Wednesday, February 9 (tomorrow) @ 10AM (delayed).

Rep. Tim Moore is the Prime Sponsor of the bill. Please contact subcommittee members (email addresses below) & ask for them to bring the bill forward.

Under North Carolina law, an employer may be ordered to withhold wages from an employee and pay them to a creditor for the following types of debts: taxes, student loans, child support, alimony, and payment of ambulance services in certain North Carolina counties. However, the courts of North Carolina are not permitted to order an employer to withhold wages for other types of debts such as car loans, credit card debt, and other personal debt items. 46 out of 50 states allow for such garnishment.

Rep Blust- Subcommittee Chair: john.blust@ncleg.net
Rep Alexander: Martha.Alexander@ncleg.net
Rep Blackwell: Hugh.Blackwell@ncleg.net
Rep Daughtry: Leo.Daughtry@ncleg.net
Rep Crawford: Jim.Crawford@ncleg.net
Rep Faison: Bill.Faison@ncleg.net
Rep Hall: Larry.Hall@ncleg.net
Rep Howard: Julia.Howard@ncleg.net
Rep Jackson: Darren.Jackson@ncleg.net
Rep Killian: Ric.Killian@ncleg.net
Rep McGrady: Chuck.McGrady@ncleg.net
Rep Mills: Grey.Mills@ncleg.net
Rep Ross: Deborah.Ross@ncleg.net

Thanks for your efforts!



*Below is an excellent letter sent on the topic. Obviously, DO NOT COPY AND SEND, but use as guide to form your own email:



Please accept my strong support for House Bill 30 - Garnishment of Wage to Satisfy Judgments.

Over the past 20 years I have on occasion been forced to file Small Claims Court actions against individuals and companies who fail to pay or complete services contracted for. When I receive a judgment in my favor collecting on the debt has been nearly impossible. One can file a Writ of Execution to try and obtain personal property or bank accounts but with exemptions and usually small amounts of cash kept in a defendant's bank account it is ineffective. If I want to pursue collection with a third party attorney or collection agency the cost many times begins to outweigh the amount of the judgment.

Garnishment of wage would allow me to effectively collect on the debt. It is done in just about every other state in the country. I can never understand why North Carolina does not allow the "common man/woman," the citizen of this state, to effectively collect on judgment debts via garnishment accept for child support, but allows the government to collect on taxes owed? What good is a court system after a plaintiff jumps through all the hoops, follows the law and procedures and then can't collect on his or her judgment?

My court filings mostly are for rental properties that provide income to my family. How fair is it that we must end up empty handed while a tenant knowingly walks away free from paying for unpaid rent or extensive property damage? Over the 20 year period I have lost an estimated $50,000 with North Carolina losing its tax revenue from that.

I thank you for the consideration of bringing such a bill forward. We need it, and need it now.

Respectfully,

BLOGGER NORM PRAET LIVE AND IN PERSON IN WAKE COUNTY

Yours truly will be presenting a progam explaining many of the legislative changes in the past year at the Wake County Apartment Association on February 3, 2011.

The Wake County Apartment Association is a great group of property owners who meets on the first Tuesday of the month. In their own words:

What is the Wake County Apartment Association?

For over twenty years, landlords and investment real estate professionals in Wake County, North Carolina have been gathering the first Thursday of each month to share strategies about buying and operating investment real estate. We laugh, learn and grow together.

Mission

• To facilitate social and professional contact among members.

• To promote the exchange of industry knowledge and awareness.

• To encourage the acquisition of wealth through rental real estate.

You are very welcome to attend! If you profit by your attendance, we encourage you to join us every month!

WHEN: 6-7pm: Dinner & Discussion
7-8pm: Presentation

WHERE - Golden Corral on Millbrook Road, at the corner of Capital Blvd. The meeting room is in the back left corner of the restaurant.
Address: 2909 East Millbrook Road, Raleigh, NC 27604 - p) 919-872-0500.

If you would like to become a member and regularly attend, dues are only $15 per month.

The Evicted Tenant Abandoned His Car on Your Property, What Now?

This week’s post is a response to a difficult question many landlords face. Here is the question:

Motor vehicles left on the property after eviction? I know property can be disposed of after a given period of time. However, with cars/trucks, it seems almost impossible to get a junkyard to take a car if there is no title. Does the car actually become disposal property? I did have one incident where I pushed the car out onto a public street, and the town came and took it after a few days. (it had no plates) What is the proper way to handle these incidents?
ANSWER:

Taking it from the top, the first step to lawfully dispose of property is to obtain an eviction from the court, and having the writ of possession served on the tenant. After you have obtained a summary judgment, had the writ of possession served and the lock-out has gone forward, then N.C.G.S. 42-25.9 (g) provides:

"Ten days after being placed in lawful possession by execution of a writ of possession, a landlord may throw away, dispose of, or sell all items of personal property remaining on the premises, except that in the case of the lease of a space for a manufactured home as defined in G.S. 143 143.9(6), G.S. 44A 2(e2) shall apply to the disposition of a manufactured home with a current value in excess of five hundred dollars ($500.00) and its contents by a landlord after being placed in lawful possession by execution of a writ of possession. During the 10 day period after being placed in lawful possession by execution of a writ of possession, a landlord may move for storage purposes, but shall not throw away, dispose of, or sell any items of personal property remaining on the premises unless otherwise provided for in this Chapter. Upon the tenant's request prior to the expiration of the 10 day period, the landlord shall release possession of the property to the tenant during regular business hours or at a time agreed upon. . . ."

That was kind of lengthy but that wasn’t even close to the whole paragraph, I left out the part dealing with the sale of the property. I think it is important that the statute specifically addresses mobile homes left behind, but does not differentiate between motor vehicles and any other personal property.

Now the tenant has no right to store property on the rental premises and you can get rid of the vehicle you should look to the city or county in which the rental premises is located. North Carolina has two mirror statutes that allow for cities and counties to have ordinances regarding disposal of abandoned vehicles, and yes both ordinances allow for the removal of vehicles left on private property. Both N.C.G.S. § 160A-303(city) and N.C.G.S. 153a-132(county) provide that the city or county may have an ordinance providing for removal of a motor vehicle left on private property for more than two hours. Yes , that is right two hours. As an example you can find Wake County’s Abandoned Vehicle Ordinance here: Wake Abandoned Vehicle Ordinance.

So, you should check first with your city and then with your county if they will remove the motor vehicle, or if they can recommend a private towing company that will tow and store the car.

I would guess that while pushing a car into a street may be effective, it could possibly cause you to be fined for placing that vehicle in the street. I assume if you are sophisticated enough to own a rental property that you should be able to evaluate the potential risks and rewards of ridding your rental premises of an unwanted vehicle by placing it in the street.

None of this is to say if a tenant comes for his car or property that you should not give it to him. Generally, you are legally required to give your tenant his property back, and even if you are not legally required, it will usually make your life a lot easier if you return the property.

Another option is to check to see if there is a lien on the vehicle and advise the party holding the lien that the car has been abandoned. They just might claim the car.

Finally, the North Carolina Depart of Motor Vehicles has a contact number for abandoned vehicles at (919) 861-3187, and they may be of some help.

In short, this was very difficult question, that is part of the reason it has taken me so long to complete this post. Also, your answer will vary depending on where your property is located.

Good luck and Happy Landlording!

Super Mutant Bed Bug Update: 1-19-2011

I have noticed that a lot of the viewers of this blog have questions about bed bugs. Eventually I will do a thoughtful post on bed bugs as they figure into North Carolina landlord-tenant law. In the mean time, and eventually in addition to, that post I am going to start including bed bug articles and information as they are released.

The Wall Street Journal has an article on new super bed bugs entitled "Why Bedbugs Won't Die." This heart warming article reveals that the bugs are beginning to beat the pesticides! You can get to this article by clicking here.



Enjoy!

How Not to Get Your Case Thrown Out of Court for Improper Notice!

This week we are going to look at another recent question I dealt with regarding a landlord who didn't understand the very technical nature of notice requirements under the North Carolina landlord tenant laws.

The Landlord is an LLC that owns two properties and has 2 members. They have never had to evict anyone so they are certainly not experts in this. The tenant hasn't paid rent for months, even after getting an extension and agreeing to pay. In early December, the Landlord gave the tenant written notice of default and asked them to leave. One member went to court in December. He thought they had a lease and told the judge that and she told them to schedule another hearing and bring the lease.

Turns out that a lease was never signed with this tenant. The other member went to the 2nd hearing on Thursday and the judge scolded him when she asked the landlord why they didn't give the tenant a notice and the member said he didn't know he was supposed to. The judge dismissed the case and never gave the landlord an opportunity to request eviction based on a month to month tenancy and more than 7 days notice being given even though she had the letter of notice from early December. What did they do wrong?

Answer:

The short answer is that the landlord probably filed for eviction based on non-payment of rent and did not give the proper notice.

Holdover Notice
The landlord may end the tenancy at the end of the month to month tenancy on
seven days notice pursuant to N.C.G.S. 42-14. If the tenant does not leave
prior to the end of tenancy period then the landlord may file an action for
summary ejectment based on holdover. In the complaint, and before the magistrate,
the landlord should make it clear that he is seeking summary ejectment
due to holdover, and not non-payment of rent. Therefore, if there was a
tenancy from December 1 through the 31, then the termination date would have to
be December 31 and not any date prior. The landlord would not be able to file
for summary ejectment based upon holdover until January 1. Also, the landlord would have to have given the tenant notice prior to December 24.

Notice for Non-Payment of Rent
In the alternative, the landlord may evict for non-payment of rent. In
this case, pursuant to N.C.G.S. 42-3 the landlord must provide the tenant with
notice of the the non-payment and give the tenant 10 days to cure the default, ,
unless there are lease provisions to the contrary. If the tenant fails to cure
at the expiration of the 10 days then the landlord may file a summary ejectment
action based on non-payment of rent. However, if at any time prior to judgment
the tenant pays the past due rent and costs of the suit, then all further
proceedings in the actions must cease, pursuant to N.C.G.S. 42-33.

If the landlord had a good written lease he could have escaped many of the notice requirements. That is a topic for another post though.

Keep the questions coming!

Good luck and happy landlording.

What Can You do When Your Tenant Moves Out and Trashes the Unit?

Recently I had a landlord ask me: My tenants told us they were moving out by text message because they could not pay the rent. I was unable to inspect the unit until they left. When I got there the residence was empty, except for piles of garbage bags in the garage. In the spare bedroom I found massive damage to the ceiling, walls and floor. They ripped the carpet out and did an amazing amount of damage to the room. I want to sue the tenants and press criminal charges but I do not understand how to get started in the right direction.

The landlord's question touches on three areas: 1) security deposit; 2) civil suit; and 3) criminal prosecution.

Security Deposit Issues
For starters, hopefully you had a security deposit to at least partially compensate you for the damage. If you had a security deposit you must send an accounting of how the security deposit was applied to the damages within 30 days, if you can figure out the amount of damages within 30 days. If you don't know the total cost of the damages within 30 days, you need to send an interim accounting of how the deposit was applied within 30 and then a final accounting within sixty days. The North Carolina Security Deposit Act can be found at N.C.G.S. 42-50.

Civil Suit
As for a civil suit, the first question is whether you can locate the tenants. If you can, or you hire someone who can, then you may file an action either in small claims court (if under $5k damages); district court (if under $10k damages), or Superior Court (if over $30k in damages). Whether you will need an attorney will depend on the amount of damages, how the property is owned (in your own name or under some sort of business entity), and your level of comfort going to court. Additionally, just because you win and get a judgment against the tenants does not mean that you will be able to collect on the judgment, so you will need to decide whether it is worth the expense of hiring an attorney, or even filing a complaint.

If you file in small claims without an attorney the court clerk's office has forms you can fill out that are fairly simple. If you have any questions the clerk's offices are often very helpful. You will want to take pictures of the unit as you found it, and keep all your receipts to demonstrate the cost of repairs to the court.

Criminal Prosecution of Tenant for Damages
There is a criminal offense under N.C.G.S. § 42-11 entitled "willful destruction by tenant misdemeanor," which makes it a Class 1 Misdemeanor to willfully damage a rental dwelling. You may wish to speak to the sheriff's department or local police about charging the tenant with this offense. You should be prepared for law enforcement not to want to get involved in what they may view as a civil dispute.
What should the landlord have done before he got himself in this position?

Two things come immediately to mind.

1) Regular visits to the rental unit. Make sure your lease provides you the opportunity to drop by the unit from time to time to inspect, and take advantage of this opportunity.

2) Qualify the tenant. Make sure the tenant has a decent credit rating, job and good references.

As a landlord you have to be vigilant. Absentee landlords often end up having their profits absent as well. Good luck and Happy Landlording!