Late Rent in NC

Rehabbing, Fix and Flip, Rental Properties
1

Location: Charlotte, NC

I have a couple SFH rented and 2 rooms in a townhouse rented by tenants. I set up my late rent policy based upon my understanding of NC law but feel it’s very lenient and that I need to remedy the situation when my leases come up for renewal. My current policy:

1st of month - rent due
5th of month - late notice
10th of month - late fee of $20 or 5%
20th of month - notice to vacate

So, my tenants generally pay the rent a week late (around the 7th - 9th) to avoid the late fee. How should I change my policy or is this appropriate in NC? Properties are 45 minutes away if door knocking is required.

Thanks.

2

NC laws are pretty well spelled out as to what you can do.
Here’s the link for late fees:
http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_42/GS_42-46.html
If you’re concerned about the timing of the rent payments, change your wording to say rent is due and payable on the 1st of the month. By state provision, you can’t charge a late fee until the rent is 5 or more days late. So your tenants still actually have four more days to get you the money. Also notice you can only charge a one time late fee and payments have to be applied so that the original late fee does not cause any additional future late fees.
Hope this helps.

3

We always offer the tenant a discounted rent. Rent is due on the first but if you pay early, take off 50.00.

That ususally works pretty good.

4

Hi,

Thanks!! :biggrin These suggestions help a lot. I’ll change the wording in my leases as they come due.

5

Some states view discount programs as late fees in reverse, which makes them illegal.

6

Here is how I view it, and most of my rentals are in Catawba County:

1st - Rent due, must pay by the 5th

6th - 10-day eviction notice posted (must be given to tenant)

16th - File eviction with county and set court date, which will usually a week
to a week and a half later. We will call it 7 days in this example.

7 days later - Go to small claims court and get judgment. Tenant is given ANOTHER 10 days to pay.

10 days later - file for Writ of Possession, and wait another 2-7 days for a deputy to remove tenants.

So, you can see that it pays to act fast and get the ball rolling. Where I am in NC it takes about 30 days AFTER you decide you are tired of waiting for rent. I think it is best to be diligent about posting the 10-day warning immediately on the 6th (or you could even do it on the 2nd) so that the clock is ticking. It doesn’t cost you anything to post the warning, but it does start costing as soon as you go to file the actual eviction.

7

I figured that there are issues with that in some states and have no idea about NC.

8

NC views discounted rents as illegal. Of course, everything is up to the judge, if it gets to that point.

Maximum late fee in NC is $25 or 5% of total rent, whichever is greater.

You’re waiting way too long to start the process.

Due on 1st. Late on 5th. Period. No excuses. Not only should that be spelled out clearly in your lease, the point that at 5pm on the 5th, if it isn’t in your hands, then they owe the late fee, no notice needed, should be as well.

If you hadn’t gotten your rent by the first, you should be sending out a notice (either mailed or posted) on the 2nd informing them that if not paid by 5th, it’s late, if not paid by 11th, it’s eviction. That’s your legal ten day.

Better still is to include the ten day in your lease agreement with tenant signatures. That way, you can simply go down to the clerk of court on the 11th and file away.

C_A_L,

That’s about right, but it can be quicker, if you time it right and go to the right courthouse. If you file by Thursday, then it will be the next Wednesday for court in Newton, but it will be Monday if you request Hickory (assuming the deputy gets it posted on Friday). Also, if you think that you’re going to have problems with a holdover, you need to file in Hickory, as it greatly shortens the timeframe involved.

Court on Wed., 10 days falls on Sat. which means that tenant gets not only Sat and Sun, but also Monday and Tues. (total of 14 days) as well. Same with the Writ. Simply filing in Hickory could spend up a full blown eviction by 8-10 days.

Raj

9

C_A_L and Roger J,

I’ve printed your posts and pasted them on my wall. I’ll have to live with the late fee being on the 10th until my leases get renewed but will implement everything else immediately. Thank you!

10

Could I get a copy of your rental lease that spells all this out plainly? Thanks

11

Roger J…How can you choose which courthouse you file it at? I thought it had to be the courthouse of the county your rental is located at.

C_A_L…must be better in catawaba…in wake it takes more like 45 days. I am doing an eviction right now. It is going to look like this:

Notice on the 6th
Filed on the 16th.
Court date on the 4th of this month.
10 more days.
Then up to sherriff, probably another week.

Total 39 days unless you include the 6 days before they were late. I do. So the process is about a month and a half.

I want a 5 day notice like the other states.

12

Same. Those are great ideas and I am in NC too.

13

BTW, if you have a default clause in your lease (in NC) than you don’t have to give any notice. You can start the summary ejectment on the 6th.

DEFAULT If Tenant(s) shall fail to make any payment of rent when due or shall fail to comply with any agreement herein contained, or shall become insolvent of bankrupt, landlord may terminate this lease with or without notice to the tenants(s) therefore without prejudice to other remedies available to the Landlord: and in such event, Tenant(s) hereby expressly waives notice to quit possession and such other formalities as may be required by law.

14

You guys are too lenient. If I were in your shoes, my tenants are in default on the 2nd, late fees apply after the 5th. Why wait until the grace period expires to send the pay or quit notice? Send it on the 2nd (certified mail).

15

ahh …state laws maybe??? You do that here and you gotta start from scratch again. Unless you have the default clause, then you don’t need the notice. Still can’t start the court process until the 6th.

16

John, sorry I haven’t been following this thread lately, but to answer:

Catawba county has 2 courthouses, so you can choose which one you want to go to and they have different days for eviction.

And I always file eviction on the 11th. My leases have a 10 day notice built-in. Due on the first, late on the 5th, if not received by the 10th, eviction will be filed on the 11th (or business day thereafter). Perfectly legal and valid in NC and 100% tried and true in the court of law.

Raj