Imagine this rental property scenario:
You have a tenant who suddenly becomes late on rent payments, or worse stops paying altogether. You begin eviction proceedings but before the case goes to court the tenant settles up. They pay their late rent, along with other related fees outlined in their lease agreement. This includes legal fees and court filing costs associated with starting the eviction proceedings.
Is it legal for the landlord to collect the eviction related fees including attorney fees, even if the case never ended up going to court?
The North Carolina General Assembly passed legislation in June that says it is.
The question came about after several North Carolina renters individually challenged the fees in separate lawsuits earlier this year. Even though a 2009 law allows a landlord to charge a complaint filing fee of 5 percent of the rent and a late fee of 5 percent, a superior court judge sided with one of the tenants in his March ruling.
Apartment owners and realtors quickly asked lawmakers to pass legislation clarifying the fees outlined in the 2009 law and they complied. Senate Bill 224, passed in June, affirms a landlord’s right to charge up to 15 percent of the rent owed for legal fees that were actually incurred to start eviction proceedings.
So, what does SB 224 actually mean for landlords?
The new law really just confirms that landlords can require tenants to reimburse them for many of the common fees involved in filing an eviction, and specifically attorney fees. It’s a protective measure that many realtors and property managers applauded.
Would you, as a landlord, be happy to suddenly find yourself on the hook for hundreds of dollars in excess legal fees? Would you want the hassle of having to evict a tenant and the delayed or lost rental income? Probably not.
What should a landlord do when a tenant becomes late on their payments?
Suppose a tenant has a good payment record but experiences a sudden loss of income. If they approach you to try to work out a payment option, should you do it?
It’s really a judgment call on the landlord’s part. It might be worthwhile, or even just in good faith, to agree to a payment arrangement the first time. Doing so could avoid the hassle of an eviction filing altogether.
On the other hand, if you own multiple properties and rely on the rental income from them, constantly navigating requests for payment arrangements from your tenants can quickly become unwieldy and unprofitable. Their partial or late payment represents a burden to your own cash flow.
That’s why having a property management company like Oak City Properties as your agent is a huge benefit. Having someone knowable and skilled in working with delinquent tenants that will protect your investment is a burden off your shoulders and a huge benefit.
Our team of property management professionals at Oak City Properties is experienced in many of the thorny aspects of tenant-related issues in the Raleigh area, including dealing with late payments and eviction filings. We’re well-versed in changes to state law so you won’t run afoul of tenant rights. And we know how to properly handle legal issues in the most efficient, cost-effective manner for the best possible outcome. It’s why we are the Wise Investors first choice for property management in Raleigh.