What Does the New Landlord/Tenant Attorney Fee Law Mean for North Carolinians?
A new law, known as Session Law 2018-50, Senate Bill 224, has just passed in North Carolina in June of 2018. This law adds provisions to N.C. General Statute § 42-46, which governs the legal fees landlords can collect from tenants. The bill was originally proposed by an NC Democrat for a completely different purpose – NC Republicans gutted the original bill and replaced it with this.
What do the changes mean for landlords?
The new law is good news for landlords. It allows landlords to collect court fees and attorney fees from tenants if the tenants breach their lease.
The filing fees charged by the Court in North Carolina are generally a $126.00 filing fee, and $30.00 for Sheriff’s service upon each defendant (tenant).
The attorney fees that can be collected are limited to 15% of the back rent due, or 15% of the monthly rent due if the tenant is being evicted for some reason other than unpaid rent. This means if a landlord hires an attorney for $1,000.00, and the tenant owes $850 in back rent, the landlord can collect $127.50 from the tenant. The new law also mentions a written lease, which may mean that landlords without a written lease will be unable to collect those fees.
The landlord must actually hire an attorney in order to capitalize on this new law. They can’t charge the tenant for fees that they did not actually pay. For landlords, this law allows them to recoup some of their losses in the case of an eviction.
What do the changes mean for tenants?
Although this law may represent a boon for landlords, it adds an extra burden on tenants. Now if a tenant faces eviction for nonpayment of a hypothetical $850.00 in overdue rent, they may also find themselves liable for around $283.00 in court costs and attorney fees. Plus, the court appearances penalties and late fees that landlords were already allowed by law to charge tenants. For tenants who are already close to homelessness, this extra money may bar them from keeping their homes or apartments.
The bill passed the NC house and senate with no objections from Republicans or Democrats. It does not seem like a highly partisan bill, although it did, unsurprisingly, have support from the housing sector and criticism from tenant advocacy groups. For more information, please read these two informative articles about the new law.
It is unclear yet how exactly this law will play out in real situations but it is safe to say that it will allow landlords to recoup a little extra money from tenants, and it will impose a harsher penalty on tenants who are facing eviction. It may empower more landlords to hire attorneys as well, because they may feel that they will be able to recover some attorney fees.
Please bear in mind that this blog post does not constitute legal advice. If you are a landlord or tenant with a legal dilemma, you should consult with a licensed North Carolina attorney about your case. Each case is different and the facts of your individual case are important in determining your rights. You can call the Crews Law Firm today to set up a consultation at (704) 559-9745.