Article 5. 
Residential Rental Agreements. 
§ 42‑38.  Application.
This Article determines the rights, obligations, and remedies under a rental agreement for a dwelling unit within this State. (1977, c. 770, s. 1.)

§ 42‑39.  Exclusions.
(a)	Repealed by Session Laws 2023‑5, s. 1.5, effective March 19, 2023, and applicable to a person renting an accommodation in an inn, hotel, motel, recreational vehicle park, campground, or similar lodging facility on or after that date. See editor's note.
(a1)	The provisions of this Article shall not apply to vacation rentals entered into under Chapter 42A of the General Statutes.
(b)	Nothing in this Article shall apply to any dwelling furnished without charge or rent.  (1973, c. 476, s. 128; 1977, c. 770, ss. 1, 2; 1999‑420, s. 3; 2007‑182, s. 2; 2023‑5, s. 1.5.)

§ 42‑40.  Definitions.
For the purpose of this Article, the following definitions shall apply:
(1)	"Action" includes recoupment, counterclaim, defense, setoff, and any other proceeding including an action for possession.
(2)	"Premises" means a dwelling unit, including mobile homes or mobile home spaces, and the structure of which it is a part and facilities and appurtenances therein and grounds, areas, and facilities normally held out for the use of residential tenants.
(3)	"Landlord" means any owner and any rental management company, rental agency, or any other person having the actual or apparent authority of an agent to perform the duties imposed by this Article.
(4)	"Protected tenant" means a tenant or household member who is a victim of domestic violence under Chapter 50B of the General Statutes or sexual assault or stalking under Chapter 14 of the General Statutes. (1977, c. 770, s. 1; 1979, c. 880, ss. 1, 2; 1999‑420, s. 2; 2005‑423, s. 5.)

§ 42‑41.  Mutuality of obligations.
The tenant's obligation to pay rent under the rental agreement or assignment and to comply with G.S. 42‑43 and the landlord's obligation to comply with G.S. 42‑42(a) shall be mutually dependent. (1977, c. 770, s. 1.)

§ 42‑42.  Landlord to provide fit premises.
(a)	The landlord shall:
(1)	Comply with the current applicable building and housing codes, whether enacted before or after October 1, 1977, to the extent required by the operation of such codes; no new requirement is imposed by this subdivision (a)(1) if a structure is exempt from a current building code.
(1a)	Comply with all applicable elevator safety requirements in G.S. 143‑143.7.
(2)	Make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.
(3)	Keep all common areas of the premises in safe condition.
(4)	Maintain in good and safe working order and promptly repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied or required to be supplied by the landlord provided that notification of needed repairs is made to the landlord in writing by the tenant, except in emergency situations.
(5)	Provide operable smoke alarms, either battery‑operated or electrical, having an Underwriters' Laboratories, Inc., listing or other equivalent national testing laboratory approval, and install the smoke alarms 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. The landlord shall replace or repair the smoke alarms 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 alarm is operable and in good repair at the beginning of each tenancy. Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated smoke alarm at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy, except where the smoke alarm is a tamper‑resistant, 10‑year lithium battery smoke alarm as required by subdivision (5a) of this subsection. 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.
(5a)	After December 31, 2012, when installing a new smoke alarm or replacing an existing smoke alarm, install a tamper‑resistant, 10‑year lithium battery smoke alarm. However, the landlord shall not be required to install a tamper‑resistant, 10‑year lithium battery smoke alarm as required by this subdivision in either of the following circumstances:
a.	The dwelling unit is equipped with a hardwired smoke alarm with a battery backup.
b.	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.
(6)	If the landlord is charging for the cost of providing water or sewer service pursuant to G.S. 42‑42.1 and has actual knowledge from either the supplying water system or other reliable source that water being supplied to tenants within the landlord's property exceeds a maximum contaminant level established pursuant to Article 10 of Chapter 130A of the General Statutes, provide notice that water being supplied exceeds a maximum contaminant level.
(7)	Provide a minimum of one operable carbon monoxide alarm 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, and install the carbon monoxide alarms 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. A landlord that installs one carbon monoxide alarm per rental unit per level shall be deemed to be in compliance with standards under this subdivision covering the location and number of alarms. The landlord shall replace or repair the carbon monoxide alarms 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 carbon monoxide alarm is operable and in good repair at the beginning of each tenancy. 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 alarm 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. A carbon monoxide alarm may be combined with smoke alarms if the combined alarm does both of the following: (i) complies with ANSI/UL2034 or ANSI/UL2075 for carbon monoxide alarms and ANSI/UL217 for smoke alarms; and (ii) emits an alarm in a manner that clearly differentiates between detecting the presence of carbon monoxide and the presence of smoke. This subdivision applies only to dwelling units having a fossil‑fuel burning heater, appliance, or fireplace, and in any dwelling unit having an attached garage. Any operable carbon monoxide detector installed before January 1, 2010, shall be deemed to be in compliance with this subdivision.
(8)	Within a reasonable period of time based upon the severity of the condition, repair or remedy any imminently dangerous condition on the premises after acquiring actual knowledge or receiving notice of the condition. Notwithstanding the landlord's repair or remedy of any imminently dangerous condition, the landlord may recover from the tenant the actual and reasonable costs of repairs that are the fault of the tenant. For purposes of this subdivision, the term "imminently dangerous condition" means any of the following:
a.	Unsafe wiring.
b.	Unsafe flooring or steps.
c.	Unsafe ceilings or roofs.
d.	Unsafe chimneys or flues.
e.	Lack of potable water.
f.	Lack of operable locks on all doors leading to the outside.
g.	Broken windows or lack of operable locks on all windows on the ground level.
h.	Lack of operable heating facilities capable of heating living areas to 65 degrees Fahrenheit when it is 20 degrees Fahrenheit outside from November 1 through March 31.
i.	Lack of an operable toilet.
j.	Lack of an operable bathtub or shower.
k.	Rat infestation as a result of defects in the structure that make the premises not impervious to rodents.
l.	Excessive standing water, sewage, or flooding problems caused by plumbing leaks or inadequate drainage that contribute to mosquito infestation or mold.
(b)	The landlord is not released of his obligations under any part of this section by the tenant's explicit or implicit acceptance of the landlord's failure to provide premises complying with this section, whether done before the lease was made, when it was made, or after it was made, unless a governmental subdivision imposes an impediment to repair for a specific period of time not to exceed six months. Notwithstanding the provisions of this subsection, the landlord and tenant are not prohibited from making a subsequent written contract wherein the tenant agrees to perform specified work on the premises, provided that said contract is supported by adequate consideration other than the letting of the premises and is not made with the purpose or effect of evading the landlord's obligations under this Article.  (1977, c. 770, s. 1; 1995, c. 111, s. 2; 1998‑212, s. 17.16(i); 2004‑143, s. 3; 2008‑219, ss. 2, 6; 2009‑279, s. 3; 2010‑97, s. 6(a); 2012‑92, s. 1; 2022‑56, s. 2.)

§ 42‑42.1.  Water, electricity, and natural gas conservation.
(a)	For the purpose of encouraging water, electricity, and natural gas conservation, pursuant to a written rental agreement, a lessor may charge for the cost of providing water or sewer service to lessees pursuant to G.S. 62‑110(g), electric service pursuant to G.S. 62‑110(h), natural gas service pursuant to G.S. 62‑110(i), or for electricity or natural gas used by a central system pursuant to G.S. 62‑110(j).
(b)	The lessor may not disconnect or terminate the lessee's electric service, water or sewer services, or natural gas service, nor may the landlord terminate the lessee's receipt of the benefits of the use of a central system, due to the lessee's nonpayment of the amount due for electric service, water or sewer services, or natural gas service.  (2004‑143, s. 4; 2011‑252, s. 2; 2017‑10, s. 2.2(a); 2017‑172, s. 1; 2021‑23, s. 27(a).)

§ 42‑42.2.  Victim protection – nondiscrimination.
A landlord shall not terminate a tenancy, fail to renew a tenancy, refuse to enter into a rental agreement, or otherwise retaliate in the rental of a dwelling based substantially on: (i) the tenant, applicant, or a household member's status as a victim of domestic violence, sexual assault, or stalking; or (ii) the tenant or applicant having terminated a rental agreement under G.S. 42‑45.1. Evidence provided to the landlord of domestic violence, sexual assault, or stalking may include any of the following:
(1)	Law enforcement, court, or federal agency records or files.
(2)	Documentation from a domestic violence or sexual assault program.
(3)	Documentation from a religious, medical, or other professional. (2005‑423, s. 6.)

§ 42‑42.3.  Victim protection – change locks.
(a)	If the perpetrator of domestic violence, sexual assault, or stalking is not a tenant in the same dwelling unit as the protected tenant, a tenant of a dwelling may give oral or written notice to the landlord that a protected tenant is a victim of domestic violence, sexual assault, or stalking and may request that the locks to the dwelling unit be changed. A protected tenant is not required to provide documentation of the domestic violence, sexual assault, or stalking to initiate the changing of the locks, pursuant to this subsection. A landlord who receives a request under this subsection shall change the locks to the protected tenant's dwelling unit or give the protected tenant permission to change the locks within 48 hours.
(b)	If the perpetrator of the domestic violence, sexual assault, or stalking is a tenant in the same dwelling unit as the victim, any tenant or protected tenant of a dwelling unit may give oral or written notice to the landlord that a protected tenant is a victim of domestic violence, sexual assault, or stalking and may request that the locks to the dwelling unit be changed. In these circumstances, the following shall apply:
(1)	Before the landlord or tenant changes the locks under this subsection, the tenant must provide the landlord with a copy of an order issued by a court that orders the perpetrator to stay away from the dwelling unit.
(2)	Unless a court order allows the perpetrator to return to the dwelling to retrieve personal belongings, the landlord has no duty under the rental agreement or by law to allow the perpetrator access to the dwelling unit, to provide keys to the perpetrator, or to provide the perpetrator access to the perpetrator's personal property within the dwelling unit once the landlord has been provided with a court order requiring the perpetrator to stay away from the dwelling. If a landlord complies with this section, the landlord is not liable for civil damages, to a perpetrator excluded from the dwelling unit, for loss of use of the dwelling unit or loss of use or damage to the perpetrator's personal property.
(3)	The perpetrator who has been excluded from the dwelling unit under this subsection remains liable under the lease with any other tenant of the dwelling unit for rent or damages to the dwelling unit.
A landlord who receives a request under this subsection shall change the locks to the protected tenant's dwelling unit or give the protected tenant permission to change the locks within 72 hours.
(c)	The protected tenant shall bear the expense of changing the locks. If a landlord fails to act within the required time, the protected tenant may change the locks without the landlord's permission. If the protected tenant changes the locks, the protected tenant shall give a key to the new locks to the landlord within 48 hours of the locks being changed. (2005‑423, s. 6.)

§ 42‑43.  Tenant to maintain dwelling unit.
(a)	The tenant shall:
(1)	Keep that part of the premises that the tenant occupies and uses as clean and safe as the conditions of the premises permit and cause no unsafe or unsanitary conditions in the common areas and remainder of the premises that the tenant uses.
(2)	Dispose of all ashes, rubbish, garbage, and other waste in a clean and safe manner.
(3)	Keep all plumbing fixtures in the dwelling unit or used by the tenant as clean as their condition permits.
(4)	Not deliberately or negligently destroy, deface, damage, or remove any part of the premises, nor render inoperable the smoke alarm or carbon monoxide alarm provided by the landlord, or knowingly permit any person to do so.
(5)	Comply with any and all obligations imposed upon the tenant by current applicable building and housing codes.
(6)	Be responsible for all damage, defacement, or removal of any property inside a dwelling unit in the tenant's exclusive control unless the damage, defacement or removal was due to ordinary wear and tear, acts of the landlord or the landlord's agent, defective products supplied or repairs authorized by the landlord, acts of third parties not invitees of the tenant, or natural forces.
(7)	Notify the landlord, in writing, of the need for replacement of or repairs to a smoke alarm or carbon monoxide alarm. The landlord shall ensure that a smoke alarm and carbon monoxide alarm are operable and in good repair at the beginning of each tenancy. Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated smoke alarm and battery‑operated carbon monoxide alarm at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy, except where the smoke alarm is a tamper‑resistant, 10‑year lithium battery smoke alarm as required by G.S. 42‑42(a)(5a). 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.
(b)	The landlord shall notify the tenant in writing of any breaches of the tenant's obligations under this section except in emergency situations.  (1977, c. 770, s. 1; 1995, c. 111, s. 3; 1998‑212, s. 17.16(j); 2008‑219, s. 3; 2012‑92, s. 2.)

§ 42‑44.  General remedies, penalties, and limitations.
(a)	Any right or obligation declared by this Chapter is enforceable by civil action, in addition to other remedies of law and in equity.
(a1)	If a landlord fails to provide, install, replace, or repair a smoke alarm under the provisions of G.S. 42‑42(a)(5) or a carbon monoxide alarm under the provisions of G.S. 42‑42(a)(7) 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. After December 31, 2012, if the landlord installs a new smoke alarm or replaces an existing smoke alarm, the smoke alarm shall be a tamper‑resistant, 10‑year lithium battery smoke alarm, except as provided in G.S. 42‑42(a)(5a). The landlord may temporarily disconnect a smoke alarm or carbon monoxide alarm in a dwelling unit or common area for construction or rehabilitation activities when such activities are likely to activate the smoke alarm or carbon monoxide alarm or make it inactive.
(a2)	If a smoke alarm or carbon monoxide alarm 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 alarm or carbon monoxide alarm 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 alarm or carbon monoxide alarm in a dwelling unit to replace the batteries or when it has been inadvertently activated.
(b)	Repealed by Session Laws 1979, c. 820, s. 8.
(c)	The tenant may not unilaterally withhold rent prior to a judicial determination of a right to do so.
(c1)	A real estate broker or firm as defined in G.S. 93A‑2 managing a rental property on behalf of a landlord shall not be personally liable as a party in a civil action between the landlord and tenant solely because the real estate broker or firm fails to identify the landlord of the property in the rental agreement.
(d)	A violation of this Article shall not constitute negligence per se.  (1977, c. 770, s. 1; 1979, c. 820, s. 8; 1998‑212, s. 17.16(k); 2008‑219, s. 4; 2012‑92, s. 3; 2016‑98, s. 1.6.)

§ 42‑45.  Early termination of rental agreement by military personnel, surviving family members, or lawful representative.
(a)	Any military technician under section 10216 of Title 10 of the United States Code who (i) is required to move pursuant to permanent change of station orders to depart 50 miles or more from the location of the dwelling unit, or (ii) is prematurely or involuntarily discharged or released from active duty with the Armed Forces of the United States, may terminate the member's rental agreement for a dwelling unit by providing the landlord with a written notice of termination to be effective on a date stated in the notice that is at least 30 days after the landlord's receipt of the notice. The notice to the landlord must be accompanied by either a copy of the official military orders or a written verification signed by the member's commanding officer.
(a1)	Any military technician under section 10216 of Title 10 of the United States Code who is deployed with a military unit for a period of not less than 90 days may terminate the member's rental agreement for a dwelling unit by providing the landlord with a written notice of termination. The notice to the landlord must be accompanied by either a copy of the official military orders or a written verification signed by the member's commanding officer. Termination of a lease pursuant to this subsection is effective 30 days after the first date on which the next rental payment is due or 45 days after the landlord's receipt of the notice, whichever is shorter, and payable after the date on which the notice of termination is delivered.
(a2)	Upon termination of a rental agreement under this section, the tenant is liable for the rent due under the rental agreement prorated to the effective date of the termination payable at such time as would have otherwise been required by the terms of the rental agreement. The tenant is not liable for any other rent or damages due to the early termination of the tenancy except the liquidated damages provided in subsection (b) of this section. If a member terminates the rental agreement pursuant to this section 14 or more days prior to occupancy, no damages or penalties of any kind shall be due.
(a3)	If a military technician under section 10216 of Title 10 of the United States Code dies while on active duty, then an immediate family member, or a lawful representative of the member's estate, may terminate the member's rental agreement for a dwelling unit by providing the landlord with a written notice of termination to be effective on the date described in subsection (a1) of this section. A copy of the death certificate, official military personnel casualty report, or letter from the commanding officer verifying the member's death must accompany the notice for this subsection to be effective. Termination of the member's lease obligations under this subsection shall also terminate the lease obligations of any cotenants who are immediate family members. If the member was a cotenant with a person who is not an immediate family member, then the termination shall relate only to the obligation of the member under the rental agreement. The prorated charges in subsection (a2) of this section and the liquidated damages provisions of subsection (b) of this section shall apply to any claims against the member's estate.
(b)	In consideration of early termination of the rental agreement, the tenant is liable to the landlord for liquidated damages provided the tenant has completed less than nine months of the tenancy and the landlord has suffered actual damages due to loss of the tenancy. The liquidated damages shall be in an amount no greater than one month's rent if the tenant has completed less than six months of the tenancy as of the effective date of termination, or one‑half of one month's rent if the tenant has completed at least six but less than nine months of the tenancy as of the effective date of termination.
(c)	The provisions of this section may not be waived or modified by the agreement of the parties under any circumstances. Nothing in this section shall affect the rights established by G.S. 42‑3.  (1987, c. 478, s. 1; 2005‑445, s. 4.1; 2011‑183, s. 29(a), (b); 2012‑64, s. 1; 2017‑156, s. 2; 2019‑161, s. 1(d).)

§ 42‑45.1.  Early termination of rental agreement by victims of domestic violence, sexual assault, or stalking.
(a)	Any protected tenant may terminate his or her rental agreement for a dwelling unit by providing the landlord with a written notice of termination to be effective on a date stated in the notice that is at least 30 days after the landlord's receipt of the notice. The notice to the landlord shall be accompanied by either: (i) a copy of a valid order of protection issued by a court pursuant to Chapter 50B or 50C of the General Statutes, other than an ex parte order, (ii) a criminal order that restrains a person from contact with a protected tenant, or (iii) a valid Address Confidentiality Program card issued pursuant to G.S. 15C‑4 to the victim or a minor member of the tenant's household. A victim of domestic violence or sexual assault must submit a copy of a safety plan with the notice to terminate. The safety plan, dated during the term of the tenancy to be terminated, must be provided by a domestic violence or sexual assault program which substantially complies with the requirements set forth in G.S. 50B‑9 and must recommend relocation of the protected tenant.
(b)	Upon termination of a rental agreement under this section, the tenant who is released from the rental agreement pursuant to subsection (a) of this section is liable for the rent due under the rental agreement prorated to the effective date of the termination and payable at the time that would have been required by the terms of the rental agreement. The tenant is not liable for any other rent or fees due only to the early termination of the tenancy. If, pursuant to this section, a tenant terminates the rental agreement 14 days or more before occupancy, the tenant is not subject to any damages or penalties.
(c)	Notwithstanding the release of a protected tenant from a rental agreement under subsection (a) of this section, or the exclusion of a perpetrator of domestic violence, sexual assault, or stalking by court order, if there are any remaining tenants residing in the dwelling unit, the tenancy shall continue for those tenants. The perpetrator who has been excluded from the dwelling unit under court order remains liable under the lease with any other tenant of the dwelling unit for rent or damages to the dwelling unit.
(d)	The provisions of this section may not be waived or modified by agreement of the parties. (2005‑423, s. 7.)

§ 42‑45.2.  Early termination of rental agreement by tenants residing in certain foreclosed property.
Any tenant who resides in residential real property containing less than 15 rental units that is being sold in a foreclosure proceeding under Article 2A of Chapter 45 of the General Statutes may terminate the rental agreement for the dwelling unit after receiving notice pursuant to G.S. 45‑21.17(4) by providing the landlord with a written notice of termination to be effective on a date stated in the notice of termination that is at least 10 days, but no more than 90 days, after the sale date contained in the notice of sale, provided that the mortgagor has not cured the default at the time the tenant provides the notice of termination. Upon termination of a rental agreement under this section, the tenant is liable for the rent due under the rental agreement prorated to the effective date of the termination payable at the time that would have been required by the terms of the rental agreement. The tenant is not liable for any other rent or damages due only to the early termination of the tenancy.  (2007‑353, s. 3; 2015‑178, s. 1(b); 2017‑102, s. 35.1.)

§ 42‑46.  Authorized fees, costs, and expenses.
(a)	Late Fee. – 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 calendar days or more late, with the first day being the day after the rent was due. 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.
(3)	Repealed by Session Laws 2009‑279, s. 4, effective October 1, 2009, and applicable to leases entered into on or after that date.
(b)	A late fee under subsection (a) of this section may be imposed only one time for each late rental payment. A late fee for a specific late rental payment may not be deducted from a subsequent rental payment so as to cause the subsequent rental payment to be in default.
(c)	Repealed by Session Laws 2009‑279, s. 4, effective October 1, 2009, and applicable to leases entered into on or after that date.
(d)	A lessor shall not charge a late fee to a lessee pursuant to subsection (a) of this section because of the lessee's failure to pay for water or sewer services provided pursuant to G.S. 62‑110(g).
(e)	Complaint‑Filing Fee. – Pursuant to a written lease, a landlord may charge an administrative complaint‑filing fee not to exceed fifteen dollars ($15.00) or five percent (5%) of the monthly rent, whichever is greater, only if the tenant was in default of the lease, the landlord filed and served a complaint for summary ejectment and/or money owed, the tenant cured the default or claim, and the landlord dismissed the complaint prior to judgment. The landlord can include this fee in the amount required to cure the default.
(f)	Court‑Appearance Fee. – Pursuant to a written lease, a landlord may charge an administrative court‑appearance fee in an amount equal to ten percent (10%) of the monthly rent only if the tenant was in default of the lease and the landlord filed, served, and prosecuted successfully a complaint for summary ejectment and/or monies owed in the small claims court. If the tenant appeals the judgment of the magistrate, and the magistrate's judgment is vacated, any fee awarded by a magistrate to the landlord under this subsection shall be vacated.
(g)	Second Trial Fee. – Pursuant to a written lease, a landlord may charge a second administrative trial fee for a new trial following an appeal from the judgment of a magistrate. To qualify for the fee, the landlord must prove that the tenant was in default of the lease and the landlord prevailed. The landlord's fee may not exceed twelve percent (12%) of the monthly rent in the lease.
(h)	Limitations on Charging and Collection of Administrative Fees and Out‑of‑Pocket Expenses and Litigation Costs. –
(1)	A landlord who claims administrative fees under subsections (e) through (g) of this section is entitled to charge and retain only one of the above fees for the landlord's complaint for summary ejectment and/or money owed.
(2)	A landlord who earns an administrative fee under subsections (e) through (g) of this section may not deduct payment of that fee from a tenant's subsequent rent payment or declare a failure to pay the fee as a default of the lease for a subsequent summary ejectment action.
(3)	It is contrary to public policy for a landlord to put in a lease or claim any administrative fee for filing a complaint for summary ejectment and/or money owed other than the ones expressly authorized by subsections (e) through (g) of this section. This limitation does not apply to out‑of‑pocket expenses or litigation costs.
(3a)	It is contrary to public policy for a landlord to claim, or for a lease to provide for the payment of, any out‑of‑pocket expenses or litigation costs for filing a complaint for summary ejectment and/or money owed other than those expressly authorized under subsection (i) of this section.
(4)	Any provision of a residential rental agreement contrary to the provisions of this section is against the public policy of this State and therefore void and unenforceable.
(5)	If the rent is subsidized by the United States Department of Housing and Urban Development, by the United States Department of Agriculture, by a State agency, by a public housing authority, or by a local government, any fee charged pursuant to this section shall be calculated on the tenant's share of the contract rent only, and the rent subsidy shall not be included.
(i)	Out‑of‑Pocket Expenses and Litigation Costs. – In addition to the late fees referenced in subsections (a) and (b) of this section and the administrative fees of a landlord referenced in subsections (e) through (g) of this section, a landlord also is permitted to charge and recover from a tenant the following actual out‑of‑pocket expenses:
(1)	Filing fees charged by the court.
(2)	Costs for service of process pursuant to G.S. 1A‑1, Rule 4 of the North Carolina Rules of Civil Procedure and G.S. 42‑29.
(3)	If the landlord is the prevailing party, reasonable attorneys' fees actually paid or owed, pursuant to a written lease, not to exceed fifteen percent (15%) of the amount owed by the tenant, or fifteen percent (15%) of the monthly rent stated in the lease if the eviction is based on a default other than the nonpayment of rent. In cases where a tenant appeals a summary ejectment to district court, a landlord is entitled to an award of all actual reasonable attorneys' fees paid or owed if a court determines that the tenant knew, or should have known, the appeal was frivolous, unreasonable, without foundation, or in bad faith or solely for the purpose of delay
(j)	The out‑of‑pocket expenses and litigation costs listed in subsection (i) of this section are allowed to be included by the landlord in the amount required to cure a default.
(k)	As used in this section, the term "administrative fees" does not include out‑of‑pocket expenses, litigation costs, or other fees.  (1987, c. 530, s. 1; 2001‑502, s. 4; 2003‑370, s. 1; 2004‑143, s. 5; 2009‑279, s. 4; 2016‑98, s. 1.7; 2018‑50, s. 1.1; 2021‑71, s. 1.1; 2024‑47, s. 8.)

§§ 42‑47 through 42‑49:  Reserved for future codification purposes.