After the Storm: Summary Ejectment and Assistance Programs in North Carolina

Hurricane Helene caused historic flooding in Western North Carolina, destroying or damaging approximately 126,000 residential properties. Many of those properties were occupied by tenants who now find themselves in unfit or uninhabitable properties. The owners of affected rental properties face the difficulty and expense of either rebuilding or making major repairs to return the properties to a fit and habitable condition. In addition to housing issues, many tenants have been left unemployed either temporarily or permanently due to damage or destruction of businesses. Loss of employment leads to difficulty paying rent which in turn affects the landlord’s ability to pay the mortgage. This cycle sometimes results in actions for “summary ejectment,” the legal term for “eviction” in North Carolina. This post will explore key issues in summary ejectment in the aftermath of a natural disaster and potential sources of assistance.

Summary Ejectment Basics

Summary ejectment is the two-step judicial process by which a landlord retakes possession of rental property from a tenant who fails to vacate the property or violates the lease. The first step involves the landlord obtaining a judgment for possession of the rental property in an action for summary ejectment. The second step involves the landlord applying to the clerk of court for a writ of possession authorizing the sheriff to remove the tenant and other occupants from the subject property. There are four grounds for summary ejectment in North Carolina: (1) holding over after the expiration of the term, or when a tenant stays in the rental property after the lease ends, (G.S. 42-26(a)(1)); (2) breaching a condition of the lease for which the landlord has reserved the right to reenter (G.S. 42-26(a)(2)); (3) failing to pay rent (G.S. 42-3); and (4) criminal activity (G.S. 42-63). A residential tenant can only be evicted by the judicial process described above and cannot be removed from residential rental property by means of constructive or actual self-help eviction, as described in further detail below. G.S. 42-25.6.

Most summary ejectment actions are filed in small claims court because they move quickly in comparison to the time it takes an action to move through district or superior court. From the issuance of the summons by the clerk (the official act which begins the lawsuit once a complaint is filed), the time for hearing is not to exceed seven (7) days, excluding legal holidays and weekends. G.S. 42-28. If the sheriff is serving the lawsuit, the sheriff must mail the summons and complaint no later than the next business day (or as soon as practicable), and the sheriff has five (5) days to attempt service. G.S. 42-29. If the sheriff is unable to serve the defendant personally, the sheriff is authorized to post the summons and complaint on some conspicuous part of the rental property. Id. Service needs be achieved only two (2) days prior to the date set for hearing, excluding legal holidays. Id. Given this expedited timeline, tenants may request more time, or judicial officials may be concerned about notice to tenants, both of which will be discussed in more detail below.

The rules of procedure in small claims also limit the amount of time a magistrate may delay the proceeding. A magistrate may continue an action for summary ejectment upon a showing of good cause but not for more than five (5) days (or until the next session of court, whichever is longer) unless the parties consent to a longer continuance. G.S. 7A-223. The rules also require the magistrate to render judgment on the same day as the conclusion of the evidence unless the parties concur, or the case is complex. G.S. 7A-222(b). The statute defines complex summary ejectment cases as those involving criminal activity, breaches other than the nonpayment of rent, public or federally subsidized housing, and cases with counterclaims. Id.

The abbreviated timeline in small claims court can mean that an action for summary ejectment is on a calendar for hearing long before either party is able to apply for and receive any possible disaster assistance. Such assistance is in part meant to deter further displacement and loss of housing following a natural disaster. 42 U.S.C. 5121. To effectuate this goal, the magistrate may want to continue cases where the receipt of assistance will resolve the claim without the need for an eviction judgment, keeping in mind that the authority to do so is limited by G.S. 7A-223.

Post-Helene, there is not a moratorium on summary ejectment proceedings, although activists and at least two legislators have called upon the legislature, the chief justice, and the governor for such action. It is possible that the legislature will consider the issue when they reconvene later this month. There is, however, a 90-day federal moratorium on foreclosures of certain mortgage loans as detailed in a post by my colleague, Meredith Smith.

Navigating the Aftermath: Landlord Rights and Responsibilities Post-Disaster

Residential Rental Agreements Act: Landlord Obligations. The Residential Rental Agreements Act (RRAA) ensures that residential rental property is maintained in a fit and habitable condition and creates a non-waivable warranty of habitability. The RRAA provides an expansive definition of “landlord” to include owners, rental management companies, rental agencies, and anyone with actual or apparent authority of an agent to perform the duties imposed by the Act. G.S. 42-40(2). The most relevant obligations of landlords after the damage caused by Hurricane Helene (or any other natural disasters) are the responsibilities to make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition (G.S. 42-42(2)); to maintain and repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied by the landlord (G.S. 42-42(4)); and repair or remedy any “imminently dangerous condition” within a reasonable time based upon the severity of the condition (G.S. 42-42(8)). Imminently dangerous conditions include unsafe structural deficiencies, lack of potable water, lack of operable heating facilities, lack of operable plumbing facilities, rat infestation, and excessive standing water caused by plumbing leaks or inadequate drainage. Id.

The landlord cannot be released from the obligations under the RRAA, either implicitly or explicitly by the tenant accepting the landlord’s failure to provide a fit and habitable rental property. G.S. 42-42(b). Tenants are liable for damages to the rental property, unless the damages are due to ordinary wear and tear, acts of the landlord (or their agent), defective products or repairs supplied or authorized by the landlord, acts of third parties not invitees of the tenant, or natural forces. G.S. 42-43(a)(6). Under the statute, tenants are not responsible for damage caused by Helene. Landlords and tenants can enter into subsequent agreements for the tenant to make repairs to the property, but such agreements must be in writing, supported by adequate consideration other than the rental of the property to the tenant, and not made with the purpose or effect of evading the landlord’s obligations under the RRAA. G.S. 42-42(b).

In times of a major disaster like Helene, what constitutes a reasonable period of time for the landlord to repair or remedy dangerous conditions is going to vary greatly depending on the severity of the impact to the particular area where the rental property is located and the availability of contractors, repair technicians, and maintenance workers. Another factor may be the amount of time it takes for the landlord to receive assistance funds to complete the repairs. Landlords may mitigate the tenant’s concerns by being responsive to the tenant’s requests for repairs and providing updates. If, however, the landlord has had a reasonable time to make the necessary repairs but has failed to do so, a tenant may bring a claim or counterclaim for breach of the warranty of habitability due to violations of the RRAA or raise such violations as a defense to a claim for summary ejectment. More information about these claims and defenses is located here.

Security Deposit Act. Typically, the security deposit is not addressed in actions for summary ejectment because the landlord (or their agent) has usually not had a chance to inspect the rental property for damages and deliver an accounting to the tenant prior to the summary ejectment hearing. Since the Security Deposit Act is related to other landlord-tenant issues explored here, it is appropriate to address some issues that may arise after Helene. Statutes regulate where security deposits are held, how they are used by the landlord, and how much the landlord can collect. G.S. 42-50, -51. The Security Deposit Act, like the RRAA, applies to more than just property owners and includes individuals and businesses “engaged in the business of renting or managing” residential rental property, excluding single rooms. G.S. 42-56. Tenants may sue for violations of the Security Deposit Act, G.S. 42-55, and such violations may also constitute an unfair or deceptive practice. See Borders v. Newton, 68 N.C. App. 768 (1984).

The statute permits the landlord to use the security deposit for unpaid rent and utilities, damage to property (exceeding normal wear and tear), costs due to early termination (unless authorized by law or caused by uninhabitable conditions or constructive eviction), unpaid bills resulting in a lien on the property, costs of re-renting the property after breach by the tenant, costs of removal and storage of tenant’s property after a summary ejectment proceeding, court costs, and late and administrative fees, out-of-pocket expenses, and litigation costs permitted by G.S. 42-46. G.S. 42-51. Given the provision of the RRAA that excludes tenants for responsbility for damage resulting from a natural disaster, a deduction for such from the security deposit appears inappropriate, absent some fault attributable to the tenant.

The landlord has an obligation to provide the tenant an accounting of how the security deposit was used, itemizing any damage to the rental property and returning any balance to the tenant. G.S. 42-52. The landlord must deliver to the tenant an accounting of how the security deposit was used 30 days from the termination of the tenancy and the delivery of possession of the property to the landlord. Id. The statute does allow the landlord an additional 30 days to provide the accounting if the extent of the landlord’s claim cannot be determined in the first 30 days after termination of the tenancy. Id. After Helene, sorting out which damage is attributable to the tenant, and which is attributable to the natural disaster may complicate the accounting process. Homelessness and displacement may impede the delivery of the accounting to the tenant and the return of the balance. Landlords are required to hold the balance of the deposit for collection by the tenant for at least six (6) months. Id.

Unfair or Deceptive Practice Act. Landlords demanding or collecting rent for uninhabitable properties should be aware of potential civil liability under the Unfair or Deceptive Practice Act (UDPA). To prove that a landlord violated the UDPA, the tenant must establish that: (a) that the landlord committed an unfair or deceptive act or practice; (b) that the action in question affects commerce; and (c) that said act proximately caused actual injury to the tenant. Creekside Apartments v. Poteat, 116 N.C. App. 26, 36 (1994). A practice is unfair when it violates public policy or is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. Id. The rental of residential housing is an act that affects commerce. Id. at 37. In Creekside Apartments, the court held that the landlord’s collection of rent on a property that was unfit and uninhabitable constitutes an unfair and deceptive trade practice, and that the tenants’ UDPA claim should not have been dismissed by the trial court. Id. A tenant who successfully brings a UDPA claim is entitled to treble the amount of damages assessed, which in this context is usually the amount of overpayment of rent during the period the property was defective. G.S. 75-16.

Casualty Clause in Lease. Some landlords may choose to include in their leases a provision giving them the option to terminate the lease due to unforeseen damage or destruction of property that results in a total or substantial loss. For example, the Standard Form 410-T “Residential Rental Contract” drafted by the North Carolina Association of REALTORS®, Inc. includes such a provision. If the subject property or a substantial part thereof is damaged by flood, storm, fire or other casualty, the landlord has the option to terminate the lease with 30-days’ written notice to the tenant. A tenant who fails to vacate by the end of the 30 days may face summary ejectment for holding over after the lease term expires. Judicial officials should review leases carefully for such casualty provisions.

Potential Out-of-Court Resolutions. Landlords whose properties sustained substantial damage due to Helene may want to reach out to tenants to discuss ways to resolve the situation without resorting to legal action. Even if the landlord has not violated the RRAA, the landlord could still violate the UDPA by demanding the tenant continue to pay rent on an unfit or uninhabitable property. To avoid such litigation, the landlord may consider waiving or reducing the rent until repairs are completed that return the property to a fit and habitable state. This is particularly true for landlords whose mortgages are subject to the federal 90-day moratorium on foreclosures. When the property is in a condition that complies with the RRAA, but the tenant is having difficulty paying rent due to delays in receiving assistance or job loss, the landlord may consider delaying legal action until such time as the relevant governmental agency determines whether the tenant is entitled to rental or other assistance or the tenant returns to work. In that scenario, the parties might sign an addendum to the lease agreement which includes a payment plan for tenants to repay any missed rental payments incurred while waiting for assistance or a return to employment. 

Navigating the Aftermath: Tenant Rights and Responsibilities Post-Disaster

Statutory Surrender of Destroyed or Damaged Property. Unless the lease expresses a contrary intention, a tenant may surrender their remaining leasehold estate in a property that is destroyed or that is damaged to the point of unfitness during the term of the tenancy by delivering a written notice to the landlord within 10 days from the damage or destruction. G.S. 42-12. The tenant is responsible for paying or tendering, at the same time, all rent owed at the time of the damage or destruction, including any prorated amount from the last payment period to the occurrence of the damage or destruction. Id. The effect of the surrender is to terminate the tenant’s obligation to pay rent beyond the date of the damage or destruction. Id.

At the time of this post, the 10-day deadline to surrender the rental property has likely lapsed unless latent damages surface rendering the property unfit. Yet, a judicial official may encounter this situation in an action for summary ejectment. A tenant who has delivered a written notice to a landlord may raise it as a defense in the event the landlord sues for summary ejectment or money owed based on nonpayment of rent after the damage or destruction. There is no case law interpreting G.S. 42-12 to guide judicial officials on its enforcement.

Residential Rental Agreements Act: Tenant Rights and Obligations. The RRAA was enacted in response to concerns that tenants were forced to accept residential rental properties in unfit and uninhabitable conditions because landlords had no duty to repair them. The obligations imposed on landlords, as set out above, ensure that tenants have housing that meets acceptable sanitary and safety standards, and these protections cannot be waived either explicitly or implicitly by the tenant. After Hurricane Helene, many tenants may find themselves in rental properties that no longer comply with the Act. While tenants may think that uninhabitable conditions, i.e., potential violations of the RRAA entitle them to withhold their rent, G.S. 42-44(c) prohibits tenants from unilaterally withholding rent prior to a judicial determination of a right to do so. The tenant does have the option to file a claim for rent abatement asking the court to reduce the rent to the fair market value of the rental property in its defective state.

Prior to withholding rent or filing a claim for rent abatement, tenants should consider that the landlord is entitled to a reasonable period of time to repair or remedy any imminently dangerous conditions. G.S. 42-42(8). The landlord’s obligations to comply with the RRAA and the tenant’s obligations to pay rent and comply with the RRAA are mutually dependent. G.S. 42-41. The landlord may argue that the tenant’s obligations to maintain the rental property includes the tenant’s cooperation with the landlord to accommodate repair appointments and allow technicians access to the property so that the it can be restored to a safe and sanitary condition. The judicial official may consider whether the tenant impeded the landlord’s ability to repair conditions.

The North Carolina Supreme Court recently held that the RRAA does not create a duty for landlords to inspect residential rental property, and that landlords do not violate the Act by failing to repair problems about which they did not receive notice or have actual knowledge. Terry v. Public Service Co. of NC, Inc., 385 N.C. 797, 806 (2024). Tenants whose landlords do not have firsthand knowledge of the damage to their property need to ensure they are providing landlords notice of any problems. While written notice is not always required under the RRAA, it is the best practice to provide written notice to the landlord, except in cases of an emergency.

While tenants await property repairs, they may want to reach out to their landlords to discuss any pending assistance payments, timelines for repairs, and an agreement on the fair market rental value of the property in its defective condition. It may be possible to avoid an eviction filing by being proactive. If the landlord fails to bring the property into compliance with the RRAA within a reasonable time and continues to demand the full rate of rent, the tenant may wish to seek legal counsel to advise them of potential claims or counterclaims for rent abatement and unfair practices, as discussed above.

Self-Help Eviction. The public policy of the state of North Carolina limits the removal of tenants from residential rental property to the judicial process of summary ejectment set out in G.S. Ch. 42. G.S. 42-25.6. Landlords or agents who use actual or constructive self-help eviction to remove tenants from residential rental property without judicial process may face liability for their interference with the tenant’s right to possess the property. See G.S. 42-25.9. Actual self-help eviction occurs when the landlord (or their agent) removes the tenant’s personal property from the residence and bars the tenant’s access to the property. Constructive self-help eviction occurs when the landlord (or their agent) changes conditions at the property, rendering the property uninhabitable, such as cutting off the utilities or refusing to repair the heating system, essentially forcing the tenant to vacate. If the tenant successfully raises self-help eviction as a defense to a claim for summary ejectment, the claim should be dismissed. Both types of self-help eviction can expose the landlord to criminal and civil liability. See, e.g., Myers v. Broome-Edwards, __ N.C. App. __ (2024) (holding that a landlord’s trespass upon leased premises to perform a self-help eviction violated the Ejectment of Residential Tenants Act, G.S. Ch. 42, Art. 2A, as well as public policy and constituted an unfair trade practice for which both the landlord and the agent who carried out the self-help eviction were liable.)

Retaliatory Eviction. The public policy of the state of North Carolina also protects tenants from being removed from residential rental property in retaliation for exercising their rights to decent, safe, and sanitary housing. G.S. 42-37.1. In an action for summary ejectment, the tenant may raise an affirmative defense by showing that the landlord’s action to remove the tenant is substantially related to the exercise of an activity protected by the statute, such as making a complaint to code enforcement, and that the protected activity took place within 12 months of the filing. Id.

However, the landlord may rebut the affirmative defense by showing one of six circumstances. Id. Relevant here, if the tenant is holding over after the lease term has ended and if the landlord seeks possession to comply with building or housing code requirements for demolition or major alterations or remodeling of the dwelling. Id. Given the extent of the damage to some of the rental properties in Western North Carolina, it is feasible that a landlord may avoid dismissal for retaliatory eviction by showing that possession of the property is necessary to comply with building codes.

Role of Judicial Officials

Rent Abatement Claims or Defenses. In the coming weeks and months, judicial officials are likely to see more complex summary ejectment cases as a result of the damage properties sustained from Hurricane Helene. In the case of rent abatement for violations of the warranty of habitability as set out in the RRAA the judicial official should consider whether the landlord has had a reasonable time to make repairs, whether the tenant has cooperated in allowing repairpersons access to the property, and what, if any, reduction in rent the tenant is entitled to for the months the property was defective while occupied by the tenant. For example, where the city water utility has failed, the lack of potable water at a rental property cannot be repaired by the landlord and would not be a successful claim or defense under the RRAA. If, however, the lack of potable water is due to a repair within the landlord’s control, and the landlord has had ample time and has received assistance to make the repair, a claim or defense under the RRAA may be successful if the tenant has not otherwise impeded the landlord repairing the condition.

Rent abatement is measured by the difference between the fair rental value of the property as warranted (i.e., in full compliance with the RRAA) and the fair rental value of the property with the defects plus any special and consequential damages the tenant proves. Miller v. C.W. Myers Trading Post, Inc., 85 N.C. App. 362 (1987). To determine fair rental value, the judicial official may consider evidence of what the property would rent for in the open market, the contractual amount of rent in the lease, the official’s own experience with living conditions, and evidence of dilapidation. Cotton v. Stanley, 86 N.C. App. 534 (1987).

Notice Issues. The fundamental principles of procedural due process are notice of the claims and an opportunity to be heard before a neutral decisionmaker. U.S. Const. Amends. 5, 14; N.C. Const. art. 1, § 19. As noted above, in actions for summary ejectment, service of the summons and complaint has to be completed only two (2) days, excluding legal holidays, before the date set for hearing. G.S. 42-29. Given the particular hardships litigants may face in getting to court or finding legal representation upon such abbreviated notice, the judicial official may determine that upholding the due process rights of the defendant require the case to be continued, bearing in mind that continuances in summary ejectment actions are limited to five (5) days, unless the parties agree to a longer continuance.

Another concern regarding notice may arise because of an unusual way by which service of the summons and complaint in a summary ejectment action can be served. The sheriff mails a copy to the defendant and must attempt personal service within five (5) days of the issuance of the summons by the clerk. G.S. 42-29. However, if the sheriff is unable to serve the defendant personally at the residence, the sheriff is authorized to post copies of the summons and complaint on some conspicuous part of the premises claimed. Id. Damage to some properties may be so extensive that residents are displaced, the property is entirely inaccessible, or there may not be a sufficiently conspicuous place to post the summons and complaint. If the judicial official is concerned a defendant has not received actual notice of the action, the judicial official may consider whether a continuance is appropriate.

Continuances. Continuances in summary ejectment cases are governed by the standard in G.S. 1A-1, Rule 40(b). Under that statute, a continuance may be granted only for good cause shown and upon such terms and conditions as justice may require. Id. Some obstacles that litigants face in the wake of a disaster like Helene include homelessness, displacement, unemployment, bereavement, and illness or injury. Such obstacles will likely qualify as good cause for granting a continuance, and justice may require such terms and conditions necessary to ensure that all parties have a full opportunity to present their sides of the case.

Notice of Appeal. Notice of appeal may either be given orally in open court with the magistrate noting it on the judgment form, or the party wishing to appeal may file a notice of appeal in the clerk’s office within 10 days after a judgment is rendered. G.S. 7A-228(b). Following Helene, Chief Justice Newby issued emergency orders extending time and periods of limitation for filing and for acts due to be done in certain enumerated counties. In some of the affected counties, the order extends the time to October 14, and in other affected counties, the order extends the time to October 28. If a party challenges whether the notice of appeal was timely filed, the judicial official will need to refer to the relevant emergency order to determine if the filing deadline was met.

Sources of Assistance for Landlords and Tenants

President Biden approved a major disaster declaration for North Carolina on September 28, 2024. The approval of such designation opens up federal help for survivors of Helene. Affected individuals can apply for assistance through FEMA’s Individuals and Households Program through November 27, 2024. Private property owners may also qualify for Private Party Debris Removal funding through FEMA.

The Disaster Recovery Act of 2024-Part II, SL 2024-53, was enacted to address issues related to Helene. Section 4B.7. “Rental Assistance” appropriated $1,000,000.00 to the Department of Health and Human Services to be allocated to county departments of social services to provide rental assistance to individuals who reside temporarily or permanently in the affected counties and who meet certain income requirements. Individuals who qualify for rental assistance through this fund will receive a one-time payment based on the U.S. Department of Housing and Urban Development’s local area Fair Market Rents.

Legal Aid of North Carolina has also created a website, “Tropical Storm Helene Disaster Assistance,” which compiles resources for both homeowners and renters.

A Word of Encouragement

Prior to joining the faculty here at the School of Government, I had the honor of serving as a magistrate in Cumberland County, where I presided over small claims court. In my experience, many matters that ended up in my courtroom, especially during the COVID-19 pandemic, could have been avoided had the parties communicated with one another about potential, mutually beneficial solutions. Hurricane Helene, like the pandemic, is a high-pressure situation where lives, livelihoods, businesses, properties, and entire infrastructures have been lost. Rebuilding will take the cooperation of both landlords and tenants. The people of Western North Carolina have already demonstrated amazing fortitude and community in the face of great adversity. Please know that the School of Government is here to support you, and a list of resources is available here.

Melanie Crenshaw is a School of Government faculty member focusing on magistrates (civil law), landlord/tenant issues, and small claims. This post also appeared on the School of Government blog On the Civil Side.