Breaking a Lease in North Carolina – Know the Laws

A lease binds a landlord and their tenant for a specific period of time, usually one year. During this time, both the landlord and tenant must abide by all terms list in it. When a tenant breaks their lease, it means that they have ended their contractual agreement with you, the landlord.

This often comes with consequences, especially if the reasons for breaking the lease aren’t legally justified. For example, moving out due to a separation/divorce or to upside/downsize are not legally justifiable reasons to break your lease. 

There are situations, however, where a tenant can break their lease without incurring any penalties. For instance, if the tenant is breaking their lease to start active military duty. 

In this article, we’ll cover everything you need to know when it comes to a tenant breaking a lease in North Carolina. 

When can a tenant break their lease in North Carolina without penalty? 

There are situations where a tenant can break their lease without penalty. In such situations, the tenant is required to provide you with proper notice. You may also require the tenant to accompany the notice with appropriate proof. 

The following are the instances where a tenant can break their lease without incurring any penalties: 

The tenant makes use of an early termination clause 

This is usually the easiest way for a tenant to break their lease agreement. All the tenant needs to do is meet the specific requirements listed in the clause. 

Usually, lease termination clauses require tenants to meet pay a fee, typically the equivalent of the rent of two months. This helps landlords meet the costs of re-renting the unit. Tenants must also provide the landlord with proper notice, which is typically 30 days. 

Be sure to clearly state any additional requirements in the lease agreement if you’re including an early termination clause.  

The tenant is a domestic violence victim 

Domestic violence victims have special rental provisions under the North Carolina landlord-tenant laws. Specifically, they may be able to break their lease early as long as they meet all the requirements. Such requirements include proper notice and proof of the restraining order or police report.

The tenant has alleged landlord harassment 

Your North Carolina tenant could move out if their landlord harassment claim is successful. Landlord harassment can take a variety of forms. 

The following are the most common forms of landlord harassment: 

• Trying to evict your tenant through “self-help” eviction tactics. This is where a landlord creates unliveable conditions to force the tenant to move out of their rental property. 
• Failing to perform repairs within a reasonable period of time. Landlords have a responsibility to maintain their properties to certain standards. If you don’t, the tenant can report you to the relevant government authorities for action. And when they do so, it’d be illegal for you to harass them. 

The tenant has alleged privacy violations 

As a landlord, you have a right to enter your tenant’s property. That said, your right is balanced against your tenant’s right to live in privacy. The law restricts when and how often a landlord can enter their tenant’s rented premises. 

You may need to enter your tenant’s premises for reasons such as:

• Under orders of the court
• In cases of emergencies
• To make needed or requested repairs 
• To show the unit to prospective tenants, buyers, or lenders. 
• When the landlord has reasons to believe you have abandoned the premises. 

North Carolina, specifically, doesn’t require landlords to serve their tenants any notice before entering. However, that doesn’t mean you can barge in on your tenants as you please. If you do, your tenant could report you for potential landlord harassment. 

Therefore, always make sure you serve your tenant reasonable notice before entering. 

The unit is no longer habitable

North Carolina tenants have a right to live in a habitable rental unit. It’s your responsibility as a landlord to ensure that that is met. 

A habitable rental unit includes:

• Availability of clean, drinkable water
• Availability of hot water and heater during the cold seasons 
• Functioning electrical, plumbing, and ventilating systems 
• Clean living conditions and free from infestation 
• Conformity to safety, health, and building codes

If you fail to provide a property that meets such conditions, your tenant may have several options to pursue under the law, including, stopping further rent payments, moving out, and doing the repairs themselves, and then deducting those costs from the rent payments. 

The tenant is beginning active military service 

This is also another legally justifiable reason a tenant can use to break their lease. Servicemembers who are starting active military duty are protected by the Servicemembers Civil Relief Act.

The tenant must belong to the:

• Armed forces
• Activated National Guard
• Commissioned corps of the Public Health Service 
• The National Oceanic and Atmospheric Administration

The tenant must serve you a written notice to end their lease. The lease will then terminate exactly 30 days after the next rent period starts. 

Do landlords have a duty to mitigate damages in North Carolina?

In North Carolina, you are required to make reasonable efforts to re-rent your unit after a tenant breaks their lease. This means that you cannot just wait for the lease to end and then hold the tenant liable for all rent due under the lease. 

Summary

As a landlord, it’s important to understand leasing laws in the state. You also have to stay informed on other rental laws that can dictate the eviction process, regulations surrounding security deposits, and more. 

These laws are often subject to change so it’s important the stay up-to-date to protect yourself, your investments, and your tenants from any legal repercussions. 

If you would like help keeping track of all the rentals laws in the state or would like assistance in other aspects of property management reach out to the experts at Ballo Realty Property Management today!

Disclaimer: This blog is in no way a substitute for professional advice from a qualified attorney. Laws change and this post might become obsolete. If you still have questions or need further help, please get in touch with a qualified attorney or an experienced property management company.