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.
Monday, January 17, 2011
Sunday, January 9, 2011
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!
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!
Tuesday, December 28, 2010
Two Important New Year's Resolution
It is an introspective time of year when many of us review how we have done over the past year and evaluate what we can do to improve in the New Year. Many of us will make resolutions that are quickly abandoned, which is okay if you are one of those people that makes my gym extra crowed during the first few weeks of January. However, some resolutions are worth sticking to.
In no particular order I have two resolutions that I request that all landlords and property management professionals to consider. They are fairly interrelated, so if it makes you feel better you can consider them one resolution.
Resolution No. 1: I will take an active role in forming the laws that regulate the rental industry.
This is not nearly as hard as it sounds, and, like many things, pretty easy once you get started. It is important to be involved at the local(municipal) level, state and federal level. At each level laws and regulations are promulgated that will effect the ease with which you conduct your business and the costs and fees involved. In North Carolina we also have the ability to influence who our judges are too, which may influence how the laws and rules are applied.
Their are two ways to influence legislation. One is time and the other is money. Money is the simplest part. It is worthwhile to contribute to organizations, people and parties that align with your interest and what you are trying to do. Time is a little more difficult to define and can include: working on campaigns; contact your legislator by telephone or in writing about a particular issue or piece of legislation; taking part in public comment periods on legislation or rulemaking; and educating like minded people around you.
But, how do you find out about what is happening? Well, you can start by paying attention. Not just listening to the 6:00 o'clock news, but actually doing your own research. You can set up some RSS feeds on areas you are interested in, if you are technically inclined. You can also take advantage of the various real estate investment and landlording organizations and the many educational opportunities that they offer. This brings me to:
Resolution No. 2: I will increase my knowledge of the laws and rules affecting the landlord-tenant industry.
There are many ways to do this. Unfortunately, I don't think you will be able to go to Barnes and Noble and get a book or magazine that will educate you all that well. So you will have to take a more proactive approach. There are a few vendors such as Lorman and the National Business Institute(NBI) that will from time to time offer relevant seminars.
However, there are several local organizations that offer monthly opportunities for you to increase this knowledge, both through formal presentations and informal discussions with other people who have experience in landlording and real estate investment. I would highly recommend joining the Triangle Real Estate Investors Association (TREIA), the Wake County Apartment Association (I don't think you actually have to own your properties in Wake County), and the Triangle Apartment Association (TAA). Both TREIA and TAA are local affiliates of national organizations and have chapter throughout the state and throughout the country. Both the TAA and TREIA have committees that attempt to engage the legislators and influence the laws that affect your bottoms line. Also, these groups often have sub-groups that will further focus on your areas of interest. I hear you can often even get free legal advice at the meetings. Additionally, the level of sophistication of the members of all of these groups varies from newbies to the more experienced,and you should never feel intimidated about attending.
Happy New Year and Happy Landlording!
Norm Praet, Esq.
In no particular order I have two resolutions that I request that all landlords and property management professionals to consider. They are fairly interrelated, so if it makes you feel better you can consider them one resolution.
Resolution No. 1: I will take an active role in forming the laws that regulate the rental industry.
This is not nearly as hard as it sounds, and, like many things, pretty easy once you get started. It is important to be involved at the local(municipal) level, state and federal level. At each level laws and regulations are promulgated that will effect the ease with which you conduct your business and the costs and fees involved. In North Carolina we also have the ability to influence who our judges are too, which may influence how the laws and rules are applied.
Their are two ways to influence legislation. One is time and the other is money. Money is the simplest part. It is worthwhile to contribute to organizations, people and parties that align with your interest and what you are trying to do. Time is a little more difficult to define and can include: working on campaigns; contact your legislator by telephone or in writing about a particular issue or piece of legislation; taking part in public comment periods on legislation or rulemaking; and educating like minded people around you.
But, how do you find out about what is happening? Well, you can start by paying attention. Not just listening to the 6:00 o'clock news, but actually doing your own research. You can set up some RSS feeds on areas you are interested in, if you are technically inclined. You can also take advantage of the various real estate investment and landlording organizations and the many educational opportunities that they offer. This brings me to:
Resolution No. 2: I will increase my knowledge of the laws and rules affecting the landlord-tenant industry.
There are many ways to do this. Unfortunately, I don't think you will be able to go to Barnes and Noble and get a book or magazine that will educate you all that well. So you will have to take a more proactive approach. There are a few vendors such as Lorman and the National Business Institute(NBI) that will from time to time offer relevant seminars.
However, there are several local organizations that offer monthly opportunities for you to increase this knowledge, both through formal presentations and informal discussions with other people who have experience in landlording and real estate investment. I would highly recommend joining the Triangle Real Estate Investors Association (TREIA), the Wake County Apartment Association (I don't think you actually have to own your properties in Wake County), and the Triangle Apartment Association (TAA). Both TREIA and TAA are local affiliates of national organizations and have chapter throughout the state and throughout the country. Both the TAA and TREIA have committees that attempt to engage the legislators and influence the laws that affect your bottoms line. Also, these groups often have sub-groups that will further focus on your areas of interest. I hear you can often even get free legal advice at the meetings. Additionally, the level of sophistication of the members of all of these groups varies from newbies to the more experienced,and you should never feel intimidated about attending.
Happy New Year and Happy Landlording!
Norm Praet, Esq.
Saturday, December 4, 2010
Who Provides North Carolina Smoke and Carbon Monoxide Detectors
The short answer is usually you, the landlord do.
SMOKE DETECTORS
The statute on landlord responsibilities NCGS 42-42
spells out pretty clearly that:
1) It is the landlord's duty to provide operable smoke detectors, either battery‑operated or electrical, having an Underwriters' Laboratories, Inc., listing or other equivalent national testing laboratory approval.
2)The landlord must install the smoke detectors in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance.
3)The landlord shall replace or repair the smoke detectors within 15 days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant. The landlord shall ensure that a smoke detector is operable and in good repair at the beginning of each tenancy.
4)However, unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated smoke detector at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy.
Carbon Monoxide Detectors:
Carbon Monoxide detector regulations only apply to a dwelling unit having a fossil‑fuel burning heater or appliance, fireplace, or an attached garage. If any of these is present then:
(1) At the beginning of each tenancy the landlord must provide a minimum of one operable carbon monoxide detector per rental unit per level, either battery‑operated or electrical, that is listed by a nationally recognized testing laboratory that is OSHA‑approved to test and certify to American National Standards Institute/Underwriters Laboratories Standards ANSI/UL2034 or ANSI/UL2075.
(2) The landlord shall install the carbon monoxide detectors in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance.
(3) The landlord shall replace or repair the carbon monoxide detectors within 15 days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant.
(4) Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated carbon monoxide detector at the beginning of a tenancy, and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered as negligence on the part of the tenant or the landlord.
(5) A carbon monoxide detector may be combined with smoke detectors if the combined detector does both of the following: (i) complies with ANSI/UL2034 or ANSI/UL2075 for carbon monoxide alarms and ANSI/UL217 for smoke detectors; and (ii) emits an alarm in a manner that clearly differentiates between detecting the presence of carbon monoxide and the presence of smoke.
Remedies
NCGS 42-44 provides the remedies for violations by the tenant or the landlord and states:
(a) Any right or obligation declared by this Chapter is enforceable by civil action, in addition to other remedies of law and in equity.
(b) If a landlord fails to provide, install, replace, or repair a smoke detector or a carbon monoxide detector within 30 days of having received written notice from the tenant or any agent of State or local government of the landlord's failure to do so, the landlord shall be responsible for an infraction and shall be subject to a fine of not more than two hundred fifty dollars ($250.00) for each violation. A landlord may temporarily disconnect a smoke detector or carbon monoxide detector in a dwelling unit or common area for construction or rehabilitation activities when such activities are likely to activate the smoke detector or carbon monoxide detector or make it inactive.
(c) If a smoke detector or carbon monoxide detector is disabled or damaged, other than through actions of the landlord, the landlord's agents, or acts of God, the tenant shall reimburse the landlord the reasonable and actual cost for repairing or replacing the smoke detector or carbon monoxide detector within 30 days of having received written notice from the landlord or any agent of State or local government of the need for the tenant to make such reimbursement. If the tenant fails to make reimbursement within 30 days, the tenant shall be responsible for an infraction and subject to a fine of not more than one hundred dollars ($100.00) for each violation. The tenant may temporarily disconnect a smoke detector or carbon monoxide detector in a dwelling unit to replace the batteries or when it has been inadvertently activated.
Words of wisdom:
Okay, first off, you should comply with the statute. It is not too expensive, it is the law, it is best for your property, and it is the right thing to do. Should the relationship break down between you and your tenants it is a good idea to have the tenant acknowledge in writing, either on the lease or the move in checklist, that the required smoke and carbon monoxide detectors are present.
Unfortunately this installment was not all that sexy but necessary all the same.
Happy landlording!
SMOKE DETECTORS
The statute on landlord responsibilities NCGS 42-42
spells out pretty clearly that:
1) It is the landlord's duty to provide operable smoke detectors, either battery‑operated or electrical, having an Underwriters' Laboratories, Inc., listing or other equivalent national testing laboratory approval.
2)The landlord must install the smoke detectors in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance.
3)The landlord shall replace or repair the smoke detectors within 15 days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant. The landlord shall ensure that a smoke detector is operable and in good repair at the beginning of each tenancy.
4)However, unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated smoke detector at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy.
Carbon Monoxide Detectors:
Carbon Monoxide detector regulations only apply to a dwelling unit having a fossil‑fuel burning heater or appliance, fireplace, or an attached garage. If any of these is present then:
(1) At the beginning of each tenancy the landlord must provide a minimum of one operable carbon monoxide detector per rental unit per level, either battery‑operated or electrical, that is listed by a nationally recognized testing laboratory that is OSHA‑approved to test and certify to American National Standards Institute/Underwriters Laboratories Standards ANSI/UL2034 or ANSI/UL2075.
(2) The landlord shall install the carbon monoxide detectors in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance.
(3) The landlord shall replace or repair the carbon monoxide detectors within 15 days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant.
(4) Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated carbon monoxide detector at the beginning of a tenancy, and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered as negligence on the part of the tenant or the landlord.
(5) A carbon monoxide detector may be combined with smoke detectors if the combined detector does both of the following: (i) complies with ANSI/UL2034 or ANSI/UL2075 for carbon monoxide alarms and ANSI/UL217 for smoke detectors; and (ii) emits an alarm in a manner that clearly differentiates between detecting the presence of carbon monoxide and the presence of smoke.
Remedies
NCGS 42-44 provides the remedies for violations by the tenant or the landlord and states:
(a) Any right or obligation declared by this Chapter is enforceable by civil action, in addition to other remedies of law and in equity.
(b) If a landlord fails to provide, install, replace, or repair a smoke detector or a carbon monoxide detector within 30 days of having received written notice from the tenant or any agent of State or local government of the landlord's failure to do so, the landlord shall be responsible for an infraction and shall be subject to a fine of not more than two hundred fifty dollars ($250.00) for each violation. A landlord may temporarily disconnect a smoke detector or carbon monoxide detector in a dwelling unit or common area for construction or rehabilitation activities when such activities are likely to activate the smoke detector or carbon monoxide detector or make it inactive.
(c) If a smoke detector or carbon monoxide detector is disabled or damaged, other than through actions of the landlord, the landlord's agents, or acts of God, the tenant shall reimburse the landlord the reasonable and actual cost for repairing or replacing the smoke detector or carbon monoxide detector within 30 days of having received written notice from the landlord or any agent of State or local government of the need for the tenant to make such reimbursement. If the tenant fails to make reimbursement within 30 days, the tenant shall be responsible for an infraction and subject to a fine of not more than one hundred dollars ($100.00) for each violation. The tenant may temporarily disconnect a smoke detector or carbon monoxide detector in a dwelling unit to replace the batteries or when it has been inadvertently activated.
Words of wisdom:
Okay, first off, you should comply with the statute. It is not too expensive, it is the law, it is best for your property, and it is the right thing to do. Should the relationship break down between you and your tenants it is a good idea to have the tenant acknowledge in writing, either on the lease or the move in checklist, that the required smoke and carbon monoxide detectors are present.
Unfortunately this installment was not all that sexy but necessary all the same.
Happy landlording!
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