An Introduction to North Carolina Housing Law

1. An Introduction to North Carolina Housing Law Madlyn Morreale, Staff Attorney Medical Legal Partnership Legal Aid of North Carolina Durham, NC

2. Objective(s) Legal Aid of North Carolina, Durham • Help participants develop a basic understanding of landlord/tenant laws in North Carolina • Help participants develop advocacy skills to help families exercise their right to healthy housing conditions • Direct advocacy • Determine whether to refer to Legal Aid of North Carolina (LANC) or other sources of assistance • Help LANC better understand the nature and extent of housing problems observed by your staff, in order to help LANC better serve Durham residents

3. Examples of Links Between Poor Housing and Health • Asthma, allergies, bug bites • Asthma, allergies • Lead poisoning • Injuries, fires • “Heat or eat” choices, malnutrition, poor growth, arthritis pain, etc. • Behavioral symptoms, infectious diseases, stress • Rodent, cockroach, bedbug infestation • Water leaks and resultant mold • Peeling and lead paint • Improper wiring, exposed wires, lack of smoke detectors, use of space heaters, uncovered radiators • Unaffordable housing and utilities, including insufficient heat, water, or refrigeration • Overcrowding Legal Aid of North Carolina, Durham

4. Examples Legal Disputes Related to Housing Legal Aid of North Carolina, Durham • Loss of housing assistance • Evictions • Habitability • Claims of discrimination • Utility service terminations • Security deposits • Illegal padlocking • Late fees • Lease terminations 4

5. Take-Home Messages Legal Aid of North Carolina, Durham • Unhealthy housing conditions may violate state law, local ordinance, other rules. • Timing and documentation are critical elements to protecting a tenant’s rights and legal remedies. • Advise tenants to: • Review their lease • Notify the landlord in writingabout necessary repairs • Keep receipts and notes about contact(s) with landlords • If appropriate, request inspections • Durham Dept. of Neighborhood Improvement Services (NIS) • Durham Housing Authority (DHA) • Consult with attorney if conditions are not promptly remedied • Federal and state laws provide special rights/protections for some people -- including people with disabilities, victims of domestic violence • Usually, tenants can’t be evicted without notice, court process.

6. Housing Law – Sources of Law Contracts What rights and responsibilities can be “waived” by agreement? Statutes – Federal and State Regulations – Federal and State Case Law Local Ordinances E.g., housing codes Program Rules E.g., Section 8, Public housing, etc. Legal Aid of North Carolina, Durham

7. HYPOTHETICAL – APPLICABLE LAW Mary is a mother of two who rents a private residence. The Landlord accuses her of damaging the premises. LL says he will file a court action to evict Mary’s family if she does not pay LL $500 as demanded.

8. HYPOTHETICAL: HABITABILITY AND EVICTION Legal Aid of North Carolina, Durham Sam is a father of four whose landlord has refused to repair toilets, lights, and stove. Sam did not pay last month’s rent, and now the landlord has filed court eviction action.

9. Basic Habitability - Landlord Duties • Comply with applicable housing codes • Keep premises in “fit and habitable” condition • Keep common areas safe • Maintain electrical, plumbing, sanitary, heating, ventilation, air conditioning, and other appliances in good and safe working order • Provide working smoke detectors, carbon monoxide detectors Legal Aid of North Carolina, Durham

10. Minimum Housing Codes • Municipal only • Exist in larger municipalities • Complaint-driven process of enforcement • Inspector views premises, issues report • Enforcement sanctions may include closure of rental premises, fines • Good source of evidence for litigation Legal Aid of North Carolina, Durham

11. Tenant’s Rights and Responsibilities Regarding Repairs Legal Aid of North Carolina, Durham Do no damage and keep premises as clean and safe as possible Notify the Landlord of needed repairs Do not stop paying rent Comply with lease terms

12. Notice to Landlord of Defects • Lack of written notice commonly asserted as a “defense” by landlords • Constructive notice exists if defects pre-dated tenancy • Written notice required for certain statutory claims, butnot if it an emergency or if defect rendered premises not fit and habitable • Written notice not required for common law claim of breach of warranty of habitability Legal Aid of North Carolina, Durham

13. What if Repairs Are Not Done? Legal Aid of North Carolina, Durham • Tenant may sue landlord and recover: • Landlord ordered to make repairs • Money damages, such as • Rent abatement • Consequential damages like repair costs, higher utility bills, etc • Future rent reduction until repairs made • Potential claim for Unfair and Deceptive Trade Practices • Treble damages • Attorneys’ fees

14. Damages - Rent Abatement • Defined as difference between fair market rental value “as warranted” and actual FMV in defective condition • Limited by amount of rent actually paid by Tenant • “Warranted” value= value if fully fit and habitable (voids “low-ball rent” defense) • Setoff against rent owed Landlord Legal Aid of North Carolina, Durham

15. FEDERAL AND STATE FAIR HOUSING LAWS Prohibit discrimination based on: Race Color Religion Sex National origin Handicap Familial status Broad coverage: Refusal to rent Physical accommodations Management policies Evictions Purchase of homes Mortgage loans Legal Aid of North Carolina, Durham 15

16. Fair Housing – Claims Based on Disability: No discrimination against persons with disabilities in the terms, conditions, or privileges or rental of dwelling Reasonable Accommodations Administrative changes that remove barriers to equal access Reasonable Modifications Physical changes that remove barriers to equal access Legal Aid of North Carolina, Durham 16

17. Who Is/Is not Protected? (Civil Rights Definition) Protected Persons who: Have a physical or mental impairment substantiallylimitingone or more major life activities; Have a history of such a physical or mental impairment; or Are regarded as having such an impairment Not Protected Persons: Who are currently engaged in illegal drug use. Whose tenancy would constitute a “direct threat” to the health and safety of other individuals. Whose tenancy would cause substantial physical damage to the property of others. Legal Aid of North Carolina, Durham 17

18. Reasonable Accommodation – The Duty A housing provider must make reasonable accommodations in rules, policies, practices or services, when such accommodation may be necessary to afford such person equal opportunity to use and enjoy a dwelling In order to get a change in a rule, policy, practice or service, the tenant must request it! Legal Aid of North Carolina, Durham 18

19. Making the Request for a Reasonable Accommodation Recommended that the request be made in writing If the disability is not apparent, the landlord may ask for verification There must be a nexus between the disability and the requested accommodation The request must be reasonable Legal Aid of North Carolina, Durham 19

20. When Accommodations Must be Provided A landlord must provide a requested accommodation unless the landlord can show that doing so will: Impose an “undue burden” or Result in a “fundamental alteration” in the service provided by the landlord. The need for an accommodation may arise at anytime When applying During the tenancy To avoid an eviction Legal Aid of North Carolina, Durham 20

21. Reasonable Modifications – The Duty A housing provider must permit, at the expense of the person with a disability, reasonable modifications of existing premises occupied by such person, if the modifications are necessary to allow the person full enjoyment of the premises If the housing is federally funded, it is the owner’s responsibility to pay for reasonable modifications (Section 504 of the Rehabilitation Act of 1973). Legal Aid of North Carolina, Durham 21

22. Modifications: Landlord Has the Right to ... Condition permission for the modification based on assurance that the work will be done properly Ask the tenant to obtain any necessary building permits Require the tenant to return the dwelling to its original condition, BUT only if the modifications will interfere with the next tenant’s use and enjoyment of the premises Ask the tenant to set aside a reasonable amount of money over a reasonable time in an interest bearing escrow account to pay for restoration Legal Aid of North Carolina, Durham 22

23. Consequences of Violations Actual damages, including pain and suffering; Injunctive relief; Civil penalties of $10,000 for the first offense; and Punitive damages. Low-Income Housing Tax Credit projects can have their tax credits recaptured by the IRS Legal Aid of North Carolina, Durham 23

24. Enforcement of Fair Housing Laws Legal Aid of North Carolina, Durham • File an administrative complaint with HUD or NC Human Relations Commission • File a civil action in state or federal court • Raising the issue as a defense or counterclaim (e.g. summary ejectment) 24

25. PROTECTION FOR VICTIMS OF DOMESTIC VIOLENCE– STATE LAW Legal Aid of North Carolina, Durham • LL must change locks or allow T to do so, promptly, at T’s expenses • T may terminate lease upon 30 days written notice to LL, without liability; must submit written proof of DV protected status and safety plan to LL • LL may not terminate lease, refuse to rent, or otherwise retaliate against T who is DV victim • DV perpetrator who was co-tenant remains liable for rent and damages even if barred from entry 25

26. EVICTIONS - Pop Quiz What is the formal (legal) name for North Carolina’s eviction process? What is another term for evicting without going through the legal process?

27. Self-Help Evictions Are Prohibited Legal Aid of North Carolina, Durham • Types of self-help: • Disconnection of water, gas, electricity; • Changing locks; • Padlocking; • Removing doors; • Using threats; or • Any other way besides the Summary Ejectment process through the courts • Landlord must follow court process & obtain court order • Landlord & tenant cannot agree to not use court process 27

28. Tenant Causes of Action for Self-Help Eviction Breach of covenant of quiet enjoyment Wrongful eviction - actual damages Conversion Trespass to dwelling or personal property Unfair and deceptive trade practice—treble damages Unfair debt collection—up to $2,000 civil penalty Legal Aid of North Carolina, Durham 28

29. Pop Quiz What are the four legal grounds for evicting a tenant?

30. Only Four Grounds for Eviction Legal Aid of North Carolina, Durham Nonpayment of rent and proper notice given Staying after the lease has ended and proper notice given Breach of lease term that specifically allows for repossession Certain criminal activities 30

31. How Does the Summary Ejection Process Work? Legal Aid of North Carolina, Durham • Landlord files a “Summary Ejectment Complaint” with the Court • States the grounds for the eviction • The complaint, along with a “summons,” is “served” on the tenant • Summons states when and where the court hearing will be, usually within ten days • Most eviction cases heard in Small Claims Court which has jurisdiction when damages < $5,000 • Nothing in writing needs to filed by the tenant/defendant

32. Landlord’s Possible Claims Against Tenant in a Summary Ejectment Proceeding To retake “possession” of rental property To obtain a “money” judgment against tenant For rent owed For damages per the lease agreement Legal Aid of North Carolina, Durham 32

33. What Happens if the Magistrate Grants Judgment in Favor of LL? Legal Aid of North Carolina, Durham • If T wants to appeal: • Must file written appeal for a new trial in District Court within 10 calendar days of magistrate’s decision • Appeal costs can be waived if can show unable to afford costs • Case will be set for trial in District Court for a new trial. • District Court trial is “de novo” • Case is “calendared”

34. Can Tenant Stay While Case is Appealed? Legal Aid of North Carolina, Durham • YES – Tenant must get a “Stay of Execution” • 10 days to file rent bond • Clerk must approve to retain possession • Tenant files a form with the Clerk of Court that says she will pay rent to the Clerk as it comes due • Tenant may also have to pay back rent unless Magistrate found the amount to be in dispute

35. What Happens With Tenant’s Personal Property? Legal Aid of North Carolina, Durham • Tenant has 10 days* after sheriff’s execution to arrange a time with LL to remove possessions • * 21 days in case of manufactured home on rental lot • Landlord must allow tenant to remove property • Cannot require any payment • Landlord may dispose of tenant’s property if not removed within 10 days after execution by Sheriff • Mobile home not disposable by LL until 21 days have elapsed from Tenant vacating, if LL has lawful damages claim • Sale authorized per statutory procedures after 21 days from Tenant vacating, if LL has lawful damages claim

36. HYPOTHETICAL: EVICTIONS Legal Aid of North Carolina, Durham Maria has been renting an apartment for 15 months. She pays $800 per month. The landlord thinks her kids are too loud and that she complains too often. He wants to rent to another tenant. The landlord tells her that she will be evicted next week if she doesn’t agree to pay $1200 for rent. 36

37. HYPOTHETICAL: UTILITY SERVICE TERMINATIONS Legal Aid of North Carolina, Durham Richard and Juanita have a Sec. 8 voucher. Their electricity has been off for five days. Their child’s medical condition requires electricity to run medical equipment.

38. Utility Service Terminations – What To Do? Legal Aid of North Carolina, Durham • Seek resources – public and private organizations for emergency assistance • Low Income Home Energy Assistance Program (LIHEAP) • Administered through Department of Social Services • Program application dates • Financial eligibility criteria in NC • Heating and cooling: 110%FPL • Crisis: 150% FPL • Charitable organizations • Programs administered by utility companies

39. Utility Services – Legal Issues Legal Aid of North Carolina, Durham • Why were services terminated? • Landlord failure to pay? (Self-help eviction?) • Tenant failure to pay? • Is the utility company regulated by the NC Utilities Commission? • If yes, see NC General Statutes and NC Utilities Commission rules, including: • Late fees capped • Written notice requirements – at least 10 days before disconnect • Contact again at least 24 hours before disconnected • Towns and membership cooperatives usually not regulated by NC Utilities Commission

40. Prohibitions Against Disconnection by Regulated Public Utilities Legal Aid of North Carolina, Durham • Can’t disconnect service between Nov. 1 through March 31st for certain households • Include someone disabled or age 65 or older; • Unable to pay under an installment plan; AND • Certified by local social services agency as eligible to receive assistance • For all households, can’t disconnect service on: • Fridays • Weekends • State or federal holidays • The day before state or federal holidays

41. Other Protections for Customers of Regulated Public Utilities Legal Aid of North Carolina, Durham • Electric and gas companies required to maintain a list of households whose residents have special medical needs • Those customers must notify the company of their special needs! • Customers can designate another person to receive separate copy of service termination notes • Especially helpful for elderly and disabled customers

42. QUESTIONS? Madlyn Morreale, Staff Attorney Medical Legal Partnership Legal Aid of North Carolina Durham, NC (919) 688-6396, ext. 412