A lease or a rental agreement is a legally binding document. This agreement binds both the landlord and the tenant for a specific period of time. Within this time, both parties must abide by the terms of the agreement.
Breaking a lease means ending it before its termination date. While that may be unavoidable in some circumstances, breaking a lease can have multiple consequences for a tenant.
For one, as the landlord, you can sue them for all the rent due under the lease. You can also deduct part or all of their security deposit. That said, in North Carolina, not all reasons for breaking a lease are created equally. Some can attract penalties while others cannot.
The following is everything you need to know about a tenant breaking a lease in North Carolina.
Are there legally justified reasons to break a lease in North Carolina?
Broadly speaking, tenants are liable for all rent due under the lease regardless of whether they live there or not. There are some exceptions to this blanket rule, though. They are as follows:
1. The lease contains an early termination clause
Your tenant may be able to use an early termination clause in your lease to end their stay at your property. A good early termination clause provides as many details as possible.
When creating lease agreement in North Carolina , make sure to state the specific terms that a tenant must meet before using it. For example, the amount of penalty fee they must pay. Typically, this is equivalent to two months worth of rent.
Besides a penalty fee, you may also want tenants to provide you proper notice. A one-month notice period is standard.
2. The tenant is a victim of domestic violence
Under state law, domestic violence victims have special rental provisions. Generally speaking, they may be able to terminate their lease as long as they meet two basic requirements. They must show proof of their domestic violence status and two, they provide proper notice.
3. You harass the tenant
Landlord harassment may be enough justification for a tenant to break their lease.
The following actions may be deemed to be landlord harassment:
- Refusing rent payment from your tenant
- Illegally evicting your tenant
- Sexually harassing your tenant
- Imposing illegal rent increases
- Creating unnecessary disturbance that causes emotional distress on your tenant
- Failing to perform timely repairs and maintenance
- Withholding amenities the tenant is entitled to
4. You violate the tenant’s right to privacy
Some states require landlords to provide proper notice to their tenants before entry while others don’t. Notice of entry laws are absent from North Carolina’s rental law, and as such, landlords aren’t required to provide a notice of entry.
Nonetheless, most landlords do give their tenants a 24 hours notice before entry.
5. The unit does not meet habitability standards
Every state, include North Carolina, has specific health and safety codes that all landlords must abide by. If you fail to meet those standards, your tenant may have several options to pursue.
Those options include withholding rent payments, exercising their right to “repair and deduct”, and even moving out.
The following are things that may make a unit uninhabitable in North Carolina :
- Flooding problems caused by inadequate drainage or plumbing leaks
- Infestations due to defects in the structure
- Malfunctioning shower or bathtub
- Broken or faulty toilet
- Broken locks or windows
- Unsafe flues or chimneys
- Unsafe roofs or ceilings
6. The tenant is starting active military duty
If your tenant is an active service member, they may be able to break their lease early.
This is as per the Servicemembers Civil Relief Act (SCRA). Specifically, the tenant must be a member of the:
- Armed forces
- Activated National Guard
- Commissioned corps of the Public Health Service
- Commissioned corps of the National Oceanic and Atmospheric Administration
To break the lease in accordance with the act, the tenant must meet certain requirements. They must show proof that they signed the lease before entering active duty and that they intend to remain in service for at least the next ninety days. They must also provide you proper notice.
Once the tenant meets all these requirements, the lease will terminate 30 days after the next rent period begins.
What are the legally unjustified reasons to break a lease in North Carolina?
When a reason is legally unjustified, it means that the tenant has no legal protection against penalties resulting from them not honoring the lease.
The following are examples of insufficient justification for lease-breaking:
- Tenant is moving to the new home they recently bought
- The tenant is relocating for a new job or school
- The tenant is moving out to downgrade or upgrade
- Tenant is moving in with their partner or family
- The tenant is moving to be closer to loved ones
Do landlords have a duty to find a replacement tenant in North Carolina?
Per North Carolina law , landlords are required to make reasonable efforts to re-rent their units regardless of their tenant's reason for moving out. In legal terms, this is to help “mitigate damages.”
This means that you cannot wait until the lease ends, and then sue your tenant for all the rent due. You must make reasonable efforts to try to re-rent the property quickly to keep losses to a minimum.
There are legitimate and illegitimate reasons for breaking a lease in North Carolina. As a landlord, you must familiarize yourself with landlord-tenant laws and leasing and security deposit laws to protect yourself and your investments.
If you want help keeping track of all the rules and regulations or need help managing your properties considering hiring the services of a qualified property management company like Anchor Real Estate .
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws frequently change, and this post might not be updated at the time of your reading. Please contact us for any questions about this post or any other aspect property management.