Two rent due dates have passed since North Carolina’s stay-at-home order went into effect. The state has put a hold on evictions until at least June 1. But millions of workers remain without jobs as the state slowly reopens. And not everyone has received their relief check from the federal government. This is putting a growing strain on renters and landlords and raising questions about what can be done legally to keep people in their homes.
As part of our Finding Home series, WFAE’s Marshall Terry spoke with Isaac Sturgill, an attorney with Legal Aid of North Carolina, and also Kim Graham, the executive director of the Greater Charlotte Apartment Association.
Marshall Terry: Welcome, Isaac.
Isaac Sturgill: Thank you.
Terry: Let's start with state Chief Justice Cheri Beasley's suspension of most of the court's business until June 1. How does that affect renters?
Sturgill: Well, so as long as Chief Justice Beasley's order is in effect, what that means is that no new eviction hearings will be held until at least June the 1. What that means is that if you're a renter and you're behind on the rent, you still owe that rent. But what it means is that your landlord cannot take you to court and obtain an eviction judgment against you until the courts reopen in June.
Terry: As you said, that doesn't mean tenants don't have to pay their rent, though. What options do renters have in working out a deal with their landlords for any unpaid rent?
Sturgill: Well, so here's the thing: what we're really worried about is that a lot of people are falling behind on rent and that when the courts do reopen up in June, that there's going to be a huge surge of court filings that's going to put a lot of strain on the court system and the community as a whole. So to the extent that tenants can pay rent, we're encouraging them to do that.
Terry: Are landlords limited in how much they can charge tenants late fees?
Sturgill: That's actually an interesting question, because the answer is legally that some landlords are not allowed to charge late fees right now. And the reason why is there is a federal law passed called the CARES Act, which I think everyone's pretty familiar with. But there is a portion of that law that deals with evictions. And part of that law says that if you're a landlord who rents to a tenant where there's a federal subsidy involved, like Section 8 or some type of other federal subsidy program, or a tax credit property, or if you're a landlord who's renting your property on which you have a federally backed mortgage like a Fannie or Freddie Mae mortgage or a V.A. loan or something like that, you're actually not allowed to charge late fees right now.
Terry: What if you are a landlord that does not have a federally subsidized property? So you're not one of the landlords, you're not one of the renters that you just described. Are there limits on how much those landlords can charge late fees?
Sturgill: There are normal limits under state law, which has always been true. And that is 5% of the monthly rental amount, is the maximum amount you can charge for a late fee. You can't charge above that at any time.
Terry: Are renters allowed to apply their security deposit toward rent in North Carolina?
Sturgill: Well, so in North Carolina, the security deposit doesn't really come into play usually until after the renter has left the property. So under North Carolina law, the landlord is not allowed to deduct anything from the deposit until after the tenant leaves from the property. And then after the tenant leaves, the landlord has 30 days to make any deductions and then give the tenant an accounting.
So I guess theoretically, if the landlord and the tenant both agreed that the landlord can take something out of deposit to put towards rent, they could do that. But some landlords may be hesitant to do that because, you know, they know under the law they're not supposed to touch it until after the tenant moves out.
Terry: Are landlords in North Carolina allowed to do what are called self-help evictions -- that's where they changed the locks on tenants and lock them out?
Sturgill: Absolutely not. And that's a really big violation of the law. And that's something where if a landlord evicts a tenant by any other means than through the court system -- and that could mean changing the locks, that can mean turning off the power, turning off the water -- all of those acts are illegal. And if a landlord does that, the tenant would have a claim against the landlord not only to be let back into the property, but the landlord could be liable for any expenses that the tenant occurred while they're locked out.
Terry: Isaac, thank you.
Sturgill: Thank you so much, Marshall.
Terry: Isaac Sturgill is an attorney with Legal Aid of North Carolina.
Also feeling the pinch are landlords. We just heard about the rights of renters, but what about landlord rights? Joining us now is Kim Graham, executive director of the Greater Charlotte Apartment Association. Welcome.
Kim Graham: Thank you for having me, Marshall.
Terry: With evictions on hold right now, what options do landlords have if they have tenants who are not paying?
Graham: So first, many owners have reached out proactively to their residents, asking them if they need either alternative payment plans, if they can pay some of the rent. In some cases, we saw in April where one of our local owners ownership groups Grubb Properties, gave a discount, a 10% discount for renters who pay rent as of April 1. So if they paid on April 1, they got that discount. And I think that cost them about $400,000. So there's a lot of flexibility that's being provided.
And then I would say obviously in the most extreme cases where a resident hasn't paid in March and they weren't unable to pay in April, that I think we can assume that an eviction filing would be proceeding in May, assuming that they didn't come with some funds to make up all of those back payments.
Terry: Do you anticipate a lot of your members moving forward with evictions come June 1?
Graham: Most owners don't want to have to file evictions. Evictions are costly. They're costly just in broken relationships between the owner and the renter. And contrary to probably popular belief, property teams feel very much responsible for the people who live in their properties. So they don't want to see people evicted.
I would say that in as many cases as possible, owners will try not to have to evict partially because we know that the court system is going to be extremely backlogged. Right now, I believe there almost 800 cases that will have to be calendared for court proceedings once court opens back up.
Terry: What do you advise your members to do in a situation like a lot of them are experiencing right now?
Graham: The first thing that we advise them to do was to reach out to their mortgage servicers, especially for those who have mortgages -- and many do. I think all of us, all companies, small businesses and large are trying to find ways to reduce their overhead and reduce costs. And hopefully that doesn't include laying off workers or furloughing workers.
So that said, I would say working with people as best they can. The Greater Charlotte Apartment Association is partnering right now with Crisis Assistance Ministries, trying to pilot a program where Crisis can bring their services to apartment communities and try to identify renters who need assistance with closing the gap on what they can pay and what they owe. In the way that Crisis typically would do, but now that Crisis is closed, renters can't go to Crisis and stand in line and wait for this assistance. So we're trying to work with them on that.
Terry: We heard from a Legal Aid attorney that some landlords are engaging in so-called self-help evictions. That's when landlords change the locks on tenants. What's your reaction to this happening to Charlotte renters?
Graham: I would believe that none of our members are doing that because we have enough education and awareness that our members know that self-help evictions are illegal.
Terry: Kim, thank you for joining us.
Graham: Thank you for having me, Marshall.
Terry: Kim Graham is the executive director of the Greater Charlotte Apartment Association. Before that, we spoke with attorney Isaac Sturgill of Legal Aid of North Carolina. These conversations were produced as part of our series Finding Home, WFAE's weekly look at housing challenges and community changes throughout the Charlotte area.
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