Even if a tenant intends to rent for the long term, there could come a time when they need to break a lease early. In North Carolina, that can have major implications for both the landlord and tenant. For that reason, it’s imperative to understand the effects of breaking a lease in North Carolina.
In this article, we’ll go over North Carolina landlord-tenant law in depth, as well as touch on the circumstances required for, and the consequences of, an early lease termination. That way, you’ll better understand how to handle breaking a lease early if it comes up.
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Review Your Lease Before All Else
In North Carolina, you can’t simply leave your rental property during a lease – at least not without consequences. Both tenants and landlords should carefully re-read the lease before breaking a lease in North Carolina. As long as the lease agreement is sound, it should include an early termination clause that explains what will happen if a tenant needs to move out ahead of schedule.
Keep in mind that there are some differences between breaking a month-to-month lease vs. a fixed-term lease. For example, month-to-month leases require 30 days’ notice to terminate the lease agreement early, and week-to-week leases require just two days’ notice.
Fixed-term leases generally end on the last day of the lease and require 30-60 days’ notice of move-out if a tenant does not plan to renew the lease. Landlords may also include a line in the lease that specifies that the lease will renew automatically at the end of the lease term, thus converting to a month-to-month lease.
If a tenant is moving out of a manufactured home space, they must give 60 days’ notice, regardless of whether they’re in a month-to-month or fixed-term lease. (G.S. § 42‑14)
Legal Justifications for Breaking a Lease in North Carolina
The North Carolina General Assembly specifies that there are certain circumstances in which tenants can break leases without the fear of legal consequences. (G.S. § 42‑45)
Below is a full breakdown of how to break a lease in North Carolina without penalty:
Active Duty Military
The Servicemembers Civil Relief Act (SCRA) states that a tenant who is called on for active duty for no less than 90 days can break a rental contract ahead of schedule if they have to move at least 50 miles away. They will need to provide 30 days’ notice before moving. However, they will not be required to pay for the remaining lease term. (G.S. § 42‑45)
The Coast Guard, Army, Air Force, Marine Corps, National Guard, and commissioned officers working for the Public Health Service or the National Oceanic Atmospheric Administration are all covered under this act.
Domestic Violence, Sexual Assault, or Stalking
If a tenant has been the victim of one of the above, they may give the landlord 30 days’ notice to end the lease. The notice must include a protection order, a restraining order, or an Address Confidentiality Program card. A safety plan is also necessary, which should be created by a qualifying domestic violence or sexual assault program.
The tenant will not be required to pay rent past the last day of tenancy if they terminate early due to domestic violence and provide documentation of the items above. (G.S. § 42‑45.1)
Living in Foreclosed Property
If a tenant’s home is being foreclosed, and they are one of no more than 15 units, they have the ability to end the lease agreement early. To do so, they must give the landlord notice that the lease will terminate 10-90 days after the property is sold.
The tenant will not owe any rent after the last date of tenancy. (G.S. § 42‑45.2)
Breaking a Lease Without Legal Justification
There are a few circumstances in which landlords and tenants cannot break leases early, which could result in consequences. Tenants can’t legally break a lease if they’re moving away for school, due to job relocation, or for medical reasons for a family member.
Landlords can’t end a lease early just because they want to sell the home or perform renovations. There must be just cause to break a lease early in North Carolina.
Below are some tips to help you navigate this tricky situation:
- Lease Takeovers and Sublets: When tenants introduce the landlord to someone they trust who can take over the lease, and they end up signing a new agreement, the tenant’s rent payment obligations will end.
- Negotiations: Communication between the landlord and tenant could help you reach a good resolution for your situation.
- Cash-for-Keys Settlement: With this concept, landlords essentially pay tenants to move out. That can save you the hassle of going through the legal process or an eviction proceeding.
Please Note: If a tenant tries to move out early for a reason other than military, domestic violence, or living in a foreclosed property, there may not be justification to break a lease in North Carolina.
Consequences of Tenants Breaking a Lease in North Carolina
If a tenant must break a lease in North Carolina early without legal justification, there could be consequences. Such consequences may include:
- Paying Remaining Rent: The tenant will need to pay rent until the landlord has found someone else to take over the lease. There may also be early termination fees depending on the lease agreement.
- Giving Up the Security Deposit: Tenants shouldn’t count on getting the security deposit back if they break a lease early, as the security deposit could be used for unpaid rent, damages, and other purposes.
- Getting Sued: A landlord may choose to pursue legal action if the tenant is too far behind in rent or has damaged the property.
Landlord-Tenant Rights and Responsibilities
Both landlords and tenants have certain rights and responsibilities when it comes to lease-breaking, according to North Carolina landlord-tenant law. See below:
North Carolina Landlords Have the Right to:
- Charge tenants a late fee of no more than $15 or 5% of the amount owed in rent each month if a tenant doesn’t pay rent within five days. (If rent is owed each week rather than each month, the landlord can charge the amount that is larger – $4 or 5% of the total week’s rent in late fees.)
- Make deductions from the tenant’s security deposit.
- Evict tenants in the event of qualifying lease violations or nonpayment.
- Get reasonable access to the property.
North Carolina Landlords are Responsible for:
- Sending the security deposit balance remaining and an itemized list of damages to the tenant within 30 days of the last date of the tenant living there.
- Ensuring the property is safe and up to code.
- Addressing any maintenance or repair requests in a timely manner.
- Making a reasonable effort to re-rent a unit after an early termination.
North Carolina Tenants Have the Right to:
- Get their security deposit back within 30 days of tenancy, assuming there have been no deductions.
- Deduct maintenance from rent in qualifying circumstances and if specified in the lease.
- End a lease early. However, whether they will owe the remaining rent for the term will depend on the type of lease and whether there was legal justification.
North Carolina Tenants are Responsible for:
- Paying rent by the date specified in the rental contract.
- Letting landlords know about any extended absences.
- Informing the landlord of any repair issues.
- Giving the landlord a forwarding address for the security deposit.
Legal Help for Landlords and Tenants
Landlords and tenants facing a potential broken lease scenario might need to seek legal help. Here are some resources that you may find useful:
- Legal Aid of North Carolina: Get access to free legal services.
- North Carolina Department of Justice: Receive government resources and insightful data on landlord-tenant relationships.
- North Carolina Housing Finance Agency: Get tips and resources regarding topics such as avoiding foreclosure and rent assistance.
Avoid Lease Breaking with TurboTenant
Lease breaking can be a huge hassle, but it can often be prevented. With TurboTenant’s property management software, you can get all of your basic property management services in one place, saving you time, money, and stress. Our platform can help cut down on the chance of breaking a lease in North Carolina by:
- Creating detailed rental applications that are up to date with North Carolina landlord-tenant laws.
- Conducting thorough tenant screening to help you find the right renters for your property – preferably for a long term.
- Drafting lease agreements that have all North Carolina laws considered.
- Providing a place to easily request repairs and maintenance.
Sign up for a TurboTenant account today to get your property management experience back on track. It’s $0 to get started!
Disclaimer: TurboTenant does not provide legal advice. This material has been prepared for informational purposes only. All users are advised to check all applicable local, state, and federal laws and consult legal counsel should questions arise.
Breaking a Lease in North Carolina FAQs
What is the Rental Agreement Act in North Carolina?
North Carolina’s Residential Rental Agreement Act outlines the expectations of landlords and tenants in North Carolina once a lease agreement has been signed.
What is the 42-14 law in North Carolina?
The 42-14 law specifies that a tenant can end a fixed-term lease by providing at least 30 days’ notice. Month-to-month and week-to-week tenancies require seven days’ and two days’ notice, respectively (G.S. § 42-14).
How much notice does a landlord need to give when ending a month-to-month lease in North Carolina?
The landlord must give seven days’ notice for a month-to-month lease.
What is the penalty for breaking a lease in North Carolina?
The tenant could be responsible for paying for the remainder of the lease and advertising costs that the landlord may use to bring in new renters if they opt for breaking a lease in North Carolina. Note: The tenant will not owe these amounts if they break the lease due to a qualifying circumstance, as mentioned above.