AANC strives to update members on issues that matter to them and to address the pressing problems and concerns of rental housing owners and professionals via a number of vehicles including this website, newsletters, reports, and bulletins. From construction to maintenance to evictions to utility rules to civil rights to land use, the AANC both advocates for, and reports on, issues that matter to the multi-family rental housing industry.
AANC's Three Petitions all approved at June 10, 2014 NC Building Code Council Meeting
The Apartment Association of North Carolina's 3 Petitions for Building Code amendments all were approved by a vote of the North Carolina Building Code Council at their quarterly meeting at NCSU's McKimmon Center yesterday.
The first request was to amend and provide an exception to the off-site monitoring requirements for NFPA 13R sprinkler systems in new apartment construction. The Code Council, upon recommendation by their Fire Committee, voted to not only reinstate the exception that was present in the 2009 Code and absent in the 2012 Code, but to make it apply to buildings up to 4 stories in height - a building type which is increasingly becoming common in North Carolina apartment construction. Motion to approve the amendment was made by Council veteran Alan Perdue of Greensboro; it was seconded and passed unanimously. The effective date of the Code change is January 1, 2015 - which will take place following approval by the N.C. Rules Review Commission (which is expected). Many local jurisdictions will honor either the current Code and the new Code in the months ahead. This action means that the fire community will rely on the building alarm and 911 calls to evacuate residents and alert fire departments, in lieu of off-site, central-station monitoring of sprinkler system alarms at new apartment construction going forward. Note that this action of the Code Council is not retroactive to existing apartment communities that will continue to have the duty for off-site monitoring per the applicable code at construction time.
The second and third requests were to amend the previously onerous fixture calculations in both the Building and Plumbing Codes for pool deck areas. As a result of the favorable vote by the Code Council, a percentage reduction in the total required fixtures may be taken equal to the percentage of total residential units whose entries fall within 500 feet walking distance of the pool deck. This is a proportional approach that recognizes the propensity for apartment residents to use their own apartment facilities more so than ones in the pool area. The reduction works as follows: if 60% of the entries fall within 500', then the developer gets credit for 60% of the code requirement and only has to deliver 40% of the fixtures that the code language and the site-specific deck area calculations call for. The effective date of this Code change is also January 1, 2015.
The North Carolina Building Code Council is comprised of 17 persons, mostly professionals in technical fields, who are appointed by the Governor.
The AANC thanks its industry design and construction professionals for their leadership on these Code changes, particularly Jim Homan of Charter Properties and Chad Askew of The Housing Studio.
NC Utilities Commission Provides Advice Letter to Apartment Owners
The letter available via the link below is an advisory opinion from the Public Staff - North Carolina Utilities Commission. The Public Staff is the state agency charged with representing consumers in matters involving regulated utility activity.
This advice has been updated as of July 2013 and is subject to future changes in utility law or the rules of the North Carolina Utilities Commission.
The purpose of this advice is simply to provide guidance for residential apartment owners on how to avoid violation of utility law in North Carolina. Utility regulation may allow master metering or resale of utility service to tenants in other states. However, in North Carolina residential apartments, landlords are prohibited from using master meters for electric or natural gas service, or reselling utility service based on tenant usage, with limited exceptions.
The easiest and legally safest practice for residential apartment owners and managers is to allow the utility companies to meter and bill tenants directly. This keeps the apartment owner completely out of the utility process and avoids risk of regulatory violations.
Download the complete letter here or use this URL:
Important Considerations for Property Managers stemming from New Resident Personal Property Disposition Law
Will K. Brownlee
Attorney at Law
Licensed in NC and SC
BROWNLEE LAW FIRM, PLLC
There are two aspects to the new eviction laws that most folks may not understand (i.e., the new requirement to "offer to release" personal property after lockout) or for NAA Lease users, they may not realize at all (the effect of old NAA Lease language that will essentially prevent them from enjoying the new 7 day post-lockout period until the existing lease ends and they have renewed on a new NAA lease).
Under the old eviction laws (for evictions filed prior to September 1, 2013), a landlord needed to wait ten (10) days after the sheriff executed the Writ of Possession and changed locks before gaining the right to sell, throw away, or dispose of a resident's personal property. Effective for evictions filed after September 1, 2013, this time period has been reduced to seven days after the sheriff executes the Writ.
However, there is a catch - and one that is critically important to learn, or else you could expose yourself and your company to significant liability. The pertinent text of the new law states that the seven day rule applies only when "the landlord has offered to release the tenant's property and the tenant fails to retrieve such property during the landlord's regular business hours within seven days after execution of the writ" (emphasis added). The key is the offer to release, which is a new affirmative duty on the landlord's part, whereas prior law was triggered by the tenant's request only. This means that you have to offer to release the property to the tenant in order to enjoy the seven day timeframe. If you do not make such an offer, then in theory, you are never able to sell, throw away, or dispose of the personal property.
You may ask: how is such an offer made? It can be easily done, even orally, though it is best to use a format that you can document and prove later in the event of a dispute. One way could be to write a very simple memo or letter to the resident and give it to them at the time of the sheriff's lockout, and the letter could say: "We hereby offer to release your personal property to you during our normal business hours for the next seven days. Please contact our office to make these arrangements. Thank you." If the resident was not at home at the time of lockout, you could post a copy of the letter on their door and perhaps mail another copy. The key is to show an offer to release was made - and if so, you get to enjoy the shorter seven day time period. Fail to make such an offer, and you may find yourself in some trouble if you ever throw items away without making the offer.
Important note to all National Apartment Association (NAA) Lease Users with leases signed prior to September 1, 2013: By virtue of the NAA Lease's Paragraph 12(A) essentially re-stating the ten-day timeframe from the old statute (this has been feature of NC version of the NAA lease since its inception), you and the resident have, in effect, entered into a contractual relationship where you, via the NAA Lease, have promised the tenant the ten-day period, notwithstanding recent changes in the law.
Though the end of Paragraph 12(A) mentions that "We shall have all rights granted pursuant to N.C.G.S. § 42-25.9 and § 42-25.6" - which might arguably incorporate new changes in the law - this provision unfortunately conflicts with the clear, existing ten-day language of the fourth subparagraph of Paragraph 12(A). North Carolina case law precedent is fairly clear that conflicting or ambiguous terms are resolved in favor of the non-drafter of the lease - i.e., the resident. Thus, you must remember that residents on current NAA Leases will likely continue to enjoy the full ten days they have now - at least until renewal leases are signed. To its credit, NAA is making a timely change to the lease effective September 1, 2013 that incorporates the new statutory changes and reduces the timeframe to seven days - but again, this change will not affect residents on existing NAA Leases signed before September 1, 2013.
Thinking outside the box, an arguable solution to NAA Lease quandary is the use of Paragraph 17 of the Lease, which permits a change in the rules with notice, so long as it does not change dollar amounts on Page 1 of the Lease. In theory, NAA Lease-user landlords could issue a notice to existing residents regarding the new law and how, effective whatever date they wish after September 1, the ten-day post-lockout rules in Paragraph 12(A) are effectively changed, as a matter of law, to reflect the new law's requirements of only permitting seven days after lockout. Fair warning, however: this is far from a perfect solution. Tenant attorneys may well challenge this, saying that Paragraph 17 was only designed to change community rules, not material terms or legal rights promised in the lease document itself, and they will have a very good point. Thus, this will be a matter of significant risk - where if an attempted change via Paragraph 17 is proven legally unenforceable and wrong, and if you throw items away after seven days instead of ten, you may find yourself on the losing end of a lawsuit. The ideal solution is to only act on the seven day time period when your Lease does not appear to contradict it. Either way, NAA Lease users: be smart. Don't throw away personal property until you have first checked Paragraph 12(A) of your Lease and confirmed the time periods listed there."
We are pleased to announce that Governor Pat McCrory signed House Bill 802
Many North Carolina housing providers have struggled for many years with the length of the process for evicting a non-paying tenant. Each day that the tenant remains in the rental unit is another day of unpaid rent and another day that the unit cannot be prepared and marketed for a new tenant. In some urban areas of the state it takes 45 days or more to complete the eviction (12% of the income producing capability for that property). This legislation addresses some of the areas in the system that can assist in speeding up the eviction process as follows:
- would require magistrates to make their decisions the same day of the conclusion of the evidence, except magistrates may take 5 days for more complex summary ejectment cases which are spelled out in the bill
- would only allow a magistrate to continue a case for not more than five days or until the next session of court, whichever is longer, unless the parties have both consented
- would reduce the time frame from 20 days to 10 days to pay the costs of court to appeal a case
- would require the tenant in an appeal to state a defense orally or in writing and make any necessary bond payments or the landlord can file a motion to dismiss the appeal
- would reduce from 10 days to 7 days the time required to hold a tenant's property once a summary ejectment is won and a writ to obtain the rental property is executed
For more information about House Bill 802, please click here
Please Note: Effective Date - September 1st, 2013
HB522 and SB545 - "Utility Inclusive" Leases
AANC is very pleased to announce that this bill was signed into law by Governor McCrory on June 19th. Thanks to everyone who worked on this and helped with contacts to legislators and meetings with the various stakeholders to provide this win for our members.
This new law means that North Carolina rental housing consumers who prefer to pay a single, agreed-upon monthly fee to their housing providers for both rent and utilities can now clearly do so, and housing providers can provide "Utility-Inclusive Leases" with confidence.
The new law stipulates that previous law calling for service and meters for each individual dwelling unit be in the name of the tenant or other occupant of the apartment or other dwelling unit shall not apply in either of the following circumstances; when:
The Utilities Commission has approved an application under G.S. 62-110(h).G.S. 62-110(h), OR
The tenant and landlord have agreed in the lease that the cost of the electric service or natural gas service or both shall be included in the rental payments and the service shall be in the name of the landlord.
Settlement Agreement to Increase Housing Opportunities/Options for the N.C. Mentally-Disabled Population
A "Blue Ribbon Committee" made up of key members of the North Carolina Legislature and housing professionals convened during the last part of 2012, seeking to form public policy for renting to persons with mental disabilities. The State and its Department of Health and Human Services is addressing these concerns as efforts are made to move persons from adult care home settings to more independent living. The efforts to increase the numbers of mentally disabled persons living independently is being made pursuant to a settlement agreement between the State and the US Department of Justice. Some 3,000 persons with mental disabilities are targeted to be placed into market-rate housing with Tenant-Based Rental Assistance and supportive services over the next several years. See the AANC's remarks on this sensitive subject, below.
NC Public Health Lead-Based Paint Renovation, Repair and Painting Update 2012
In June 2008, the U. S. Environmental Protection Agency "EPA" published a lead-based paint regulation to protect children when painted surfaces are disturbed. The regulation requires those who perform or offer to perform certain renovation, repair and painting activities in housing built before 1978, or child-occupied facilities built before 1978, to be certified and follow certain lead-safe work practices.
Since January 2010, the NC DHHS, Division of Public Health, Health Hazards Control Unit (HHCU) became responsible for administering and enforcing the North Carolina Lead-Based Paint Hazard Management Program for Renovation, Repair and Painting (NC LHMP-RRP) regulations. The NC state rules and regulations adopt the federal regulation mentioned above.
The attached update is being provided to give you current information about the NC LHMP-RRP and to assist you with complying with the regulations.
The update is for informational purposes only. To determine actual applicability, refer to the regulations.
For copies of the NC LHMP-RRP rules and more, go to our website at: http://epi.publichealth.nc.gov/lead.htm
If you require additional information or assistance, contact the Health Hazards Control Unit at (919) 707-5950.
U.S. HOUSE OF REPRESENTATIVES FROM NORTH CAROLINA: WINNERS OF 2012 ELECTION. In large measure attributable to the redistricting process, the North Carolina election results mean that the Tar Heel State now has 9 Republican Congressmen out of 13 total, up from the prior total of 6. Learn more here
Evictions Fees Increased August 1, 2011
Filing fees for small claims actions in the State of NC did increase by TWENTY FIVE DOLLARS! The new costs will be $96 instead of $71 and Sheriff's fees of $30 for service. That makes the new Court Costs for an eviction suit $126 for a single tenant and $156 for two tenants.
N.C. Legislature Ratifies Residential Building Inspections Bill; Goes to Governor for Signature
In a major victory for North Carolina rental housing providers, the Apartment Association of North Carolina-initiated Bill - Residential Building Inspections - was ratified by the N.C. Legislature on June 18th. Once signed by Governor Perdue, the bill became law immediately, and reins in advocacy-minded local units of government who have exceeded - or might want to exceed - their statutory limitations on housing inspections. The Bill:
- Requires units of government to have reasonable cause to believe that unsafe housing conditions exist in order to inspect private housing, via landlord history, reports, or actual knowledge by a unit of government. This provision allows resources to be used to focus on unsafe conditions, problem properties and irresponsible owners and landlords.
- Requires government housing inspection programs to be administered in a non-discriminatory way regarding housing type or ownership.
- Provides local governments the authority to make an exception to the reasonable cause test in order to conduct periodic inspections as part of a targeted effort to arrest blight within designated Community Development or similar zones.
- Prohibits local governments from requiring permits as a condition of operating rental housing - unless a property has more than 3 violations in a twelve month period, or falls within the top 10% of local crime or disorder problems.
- Prohibits local governments from levying rental registration fees unless a dwelling unit has more than 2 violations in a twelve month period, or falls within the top 10% of local crime or disorder problems.
Context: North Carolina cities have historically been concerned about housing conditions in their jurisdictions, especially in older, poorer neighborhoods, and have appropriately adopted ordinances calling for minimum housing quality codes. The administration of these codes are an important tool in helping North Carolina municipalities fight neighborhood decline while ensuring to housing consumers that minimal health, safety, and sanitation conditions are maintained in residential structures.
Unfortunately, some N.C. municipalities have substantially broadened these programs aimed at stemming blighted conditions and now apply them to all housing, or at least all rental housing, as part of mandatory inspection approaches. Sometimes these programs are tied into required permits and fees as a condition of operating rental property. Programs designed to systematically inspect all rental housing for the purpose of improving housing quality are bad public policy and waste needed resources that could be used to combat problematic housing.
Inspection programs in these environments amount to a "housing tax" with no public benefit. The core of current NC law gives units of government the authority to respond to housing conditions that are unsafe, dangerous, and unfit for human habitation. The new law ensures that units of government don't exceed their authority.
Landlord/Tenant Bedbug Liability Bill passes N.C. House; eligible for Senate consideration in 2012.
The AANC-initiated bill (H721) passed the N.C. House on June 9th. The Bill would amend North Carolina Landlord-Tenant Law by providing clear housing provider (Landlord) and housing consumer (Tenant) duties regarding bedbugs in dwelling units. Current language:
- The Landlord would have to: not knowingly offer a dwelling that has bedbugs; consider a pre-leasing inspection and, if no bedbug evidence is found, be granted as complying with the statute; if no pre-leasing inspection is performed, grant the new Tenant 60 days to report bedbug evidence, with Landlord having subsequent duty to have the bedbugs exterminated; also if a notice of bedbugs is received from a Tenant in this 60-day window, the Landlord must inspect and treat neighboring units as appropriate.
- The Tenant would have to: not knowingly or recklessly introduce bedbugs; notify the Landlord within 5 days of suspecting bedbugs; be responsible for bedbug extermination if the Landlord obtained a pre-leasing inspection OR if at least 60 days have passed since taking possession; if so, contract and have the dwelling unit treated within 7 days. Tenant's failure could mean: Landlord contracts for treatment and sends a bill to the Tenant; Tenant's tenancy is terminated; and/or Tenant is sued for damages.
Landlord/Tenant Law Changes sails through N.C. House; eligible for 2012 Legislature Short Session
Another AANC initiated bill (H493) would amend the N.C. General Statutes for Landlord Tenant (Chapter 42) by addressing 7 field challenges that have materialized in recent years, from loopholes in eviction appeals to abandoned tenant personal property to partial rent payments to uses of the Tenant Security Deposit. Current language:
House Bill 493 Landlord/Tenant Law Changes
Landlord-Tenant relationships in North Carolina are governed by Chapter 42 of the N.C. General Statutes. At the core of Chapter 42 are defined, reasonable relationships and duties for both housing providers and housing consumers, as set forth by the N.C. General Assembly down through the years. The laws that govern these relationships are necessarily the General Assembly's best effort at balancing the interests of housing providers and housing consumers. A number of Landlord-Tenant Law challenges have materialized in the field in recent years and changes are needed to the law. Below we illustrate the problems and the changes that will help to refine current North Carolina law:
Section 1 Problem:Loophole during appeals process allows tenant not to pay their agreed-upon rent.
SOLUTION: Modifies the Eviction Appeal Statute so that the appealing party has a duty to make timely rental payments during the appeal.
Section 2 Problem: Eviction process can take 30-40 days and the longer the process, the longer it takes for the landlord to re-rent the unit. The costs of these delays are rarely recovered from the tenant and contribute to the high cost of rental housing. Tenants have 10 days after the Sheriff serves the writ of eviction to collect their belongings. Normally they are gone after the hearing but leave trash or unwanted items. Under the current law, the landlord must not remove (or store if removed) those items for 10 days unless they are worth less than $100.
SOLUTION: Increases the value of the property that may be donated to a non-profit to $750 and property considered abandoned up to $500 to allow landlords access to the rental unit when property has been abandoned by the tenant.
Section 3 Problem: When landlords accept partial payments for rent or subsidies, they are not able to proceed with the eviction, even when the tenant has not paid the contractual amount in full.
SOLUTION: Makes it clear that partial (less than full) payment of rent may still be the basis for proceeding with an Eviction.
Section 4 Problem: Permitted uses of a tenant security deposit are limited by law and are not clear.
SOLUTION: Allows the N.C. Security Deposit Law to be modified to allow unpaid Late Fees, damage to smoke and carbon monoxide alarms, and costs of re-renting the premises to be taken out of the security deposit.
Sections 5-6 Problem: Currently landlords cannot charge separate cleaning fees for vacation rentals and the amount gets wrapped up in the rent.
SOLUTION: Allow vacation rental landlords to separate their cleaning costs and provide clearly to the consumer what they are being charged.
Section 7 Problem: When a resident/tenant dies, there is a long delay to retain possession of the leased property and very little direction in allowing family members to receive the personal property.
SOLUTION: Requires the General Statutes Commission to study and recommend legislation to provide for the orderly and expeditious removal by a landlord of the personal property of the deceased tenant.
NC UTILITIES COMMISSION NEWS
David Drooz, an attorney with the North Carolina Utilities Commission - Public Staff, has issued an important and timely Advice Letter for N.C. Apartment Owners. It was written to provide guidance for apartment owners on how to avoid violation of utility law in North Carolina and is attached. We encourage you to disseminate this Advice Letter widely to your members throughout the state for the purpose of member education. Click here to view this letter.