Hey Hey Hey, Goodbye: Summary Ejectment and Why It's Tough to be a Landlord

This article is a departure from my usual Personal Injury musings.  It applies to residential leases and tenancies in real property.  If you're having issues with a commercial lease, give us a call and we'll point you in the right direction.  If you're incensed that this article isn't about Personal Injury, then please accept my sincerest of apologies.  I assure you that we'll be back in the normal swing of things next week.

If you're like millions of Americans, you're living in a leased space; or you have in the past.  Times are tough right now between the housing market and the job market, and home ownership is quite a bit more scarce than it normally is.  If you do own real property, there's a good chance that you rent residential space to another person or their family.  If that's the case, then you're in what we call a "landlord/tenant relationship."  

These relationships can be tricky.  The landlord has certain duties under North Carolina law, such as keeping the premises safe and habitable and providing operable smoke alarms.  The tenant is tasked with doing things like keeping the place clean and paying rent on time.  You might know firsthand that landlord/tenant relationships can get tense to the point of breaking down entirely.  If you're a landlord, how bad does the relationship have to get before you can terminate the lease and remove the tenant from your property?

Landlord/tenant law in North Carolina is both complicated and decidedly pro-tenant.  It used to be that an aggrieved landlord could basically go into the leased property and remove the tenant's stuff, change the locks, turn off the utilities, or otherwise resort to what we call "self-help measures."  Now, North Carolina law requires aggrieved landlords to go through a process known as "summary ejectment."  This is a type of quasi-lawsuit in which the landlord, as plaintiff, complains to the court that the tenant, as defendant, has wronged him by committing an act or omission for which eviction is a prescribed remedy.  The court then looks at the allegations and the evidence and decides whether or not eviction is appropriate.

There are only four scenarios in which eviction is permitted in North Carolina.  First, the tenant violated a duty under the lease where the lease provides that eviction is allowed for such a violation.  Second, the tenant failed to pay rent, even if the lease does not provide for eviction.  Third, the tenant has become a "holdover" tenant by failing or refusing to leave after the lease has expired.  Fourth (and this one is relatively new), the tenant has engaged in "criminal activity" inside of the leased property.  Let's tease these out a little bit, shall we?

The first ground for bringing a summary ejectment action is that the tenant violated a lease requirement for which the lease allows eviction.  This can include a provision for paying rent, even though there's a separate eviction ground for that, but it can also include things like having pets, paying for utilities, or complying with with HOA requirements or restrictive covenants.  There are four elements that the landlord has to prove, and he or she may prove a fifth:  (i) a landlord/tenant relationship exists between the parties, (ii) that the lease provision in question did in fact exist, (iii) that said provision provided for eviction if the tenant failed to comply therewith, (iv) that the provision was in fact breached, and (v) where applicable, that the landlord has suffered damages in connection with the breach.  If the lease agreement is oral, the landlord can testify that the oral agreement included the provision and the landlord's right to reenter and evict upon a violation thereof.  As you can see, the operative requirement here is that the lease agreement must specify that the landlord can evict upon a violation of the provision.  For example, let's say that your lease says, "Tenant shall not keep pets on the premises."  If the tenant then gets a dog, then the landlord can't automatically go and evict the tenant in summary ejectment unless the lease expressly authorizes the landlord to do so.  Moral of the story; put your lease agreements in writing, and give yourself the authority to evict for violations.

The second ground for bringing a summary ejectment action is that the tenant failed to pay rent.  This applies regardless of whether the lease provides for eviction, giving the landlord two separate avenues for pursuing eviction for a failure to pay rent.  The landlord has to prove four elements, and may prove a fifth:  (i) a landlord/tenant relationship existed between the parties, (ii) lease provisions existed that set forth the amount of rent due, as well as the date(s) upon which rent was to become due, (iii) the tenant violated this provision, (iv) the landlord made a demand for the rent due at least 10 days prior to filing a summary ejectment action, and (v) where applicable, the landlord suffered damages.  The "clincher" here is the fourth requirement; that the landlord made a demand for the rent at least 10 days prior to filing suit.  This demand doesn't have to be in writing (unless this is required by the lease agreement), but it does have to be a clear, concise, and unequivocal demand for all past due amounts.  If the demand is mailed, the landlord has to be able to prove that it was mailed, but not necessarily that it was received by the tenant.  One very important wrinkle here; if the tenant pays or tenders the past due rent at any point during the pendency of the summary ejectment action, the judge must dismiss the action.  "Tender" for these purposes means an offer and ability to pay in cash the full past due amount.  So if the tenant comes to you and offers to pay the rent, but doesn't have money in hand or an ability to get the past due rent, then the tender doesn't count and the lawsuit can proceed.

The third ground for bringing a summary ejectment action is that the tenant has become a "holdover" by refusing to leave after the expiration of the lease.  The landlord is required to prove three elements, and may prove a fourth:  (i) that a landlord/tenant relationship exists between the parties, (ii) that the lease was for a term, or specified length of time, (iii) that the lease term has expired and the tenant has breached by failing to vacate, and (iv) where applicable, any damages the landlord has suffered as a result of the breach.  Similar to the paragraph above, the landlord is also required to provide the tenant with notice that the lease period is ending or has ended.  If the lease is written, then the landlord has to give the tenant whatever notice is required by the lease agreement.  If the lease is "periodic," meaning that it automatically renews after each successive period, then the landlord's notice requirement is determined by the length of each period in the lease.  If the period is a year, the landlord must give the tenant at least a month's notice.  If the period is a month, then the notice requirement is one week.  If the tenancy is week-to-week, the notice requirement is two days.  If the lease is for mobile home space, the landlord must give at least 30 days' notice.  

The fourth and final ground for summary ejectment is relatively new, having become effective in 1995.  This remedy can arise either under the terms of the lease, or less often under state statute.  The terms of the lease will ultimately control, which is another great reason to make sure that your lease agreement properly protects your interests.  It doesn't really matter if the lease says that the tenant "shall not engage in criminal activity" if the lease doesn't also say that a violation entitles the landlord to assert the right of reentry and eviction.  

The statute can be found at North Carolina General Statute §§ 42-59 through -76.  This statute applies only to residential leases and is normally almost exclusively implicated in evictions from public housing.   Under the statute, the court may order an immediate and "complete" eviction (meaning the tenant and all others living on the property) if the landlord proves that one of the following five events has occurred:  (i) criminal activity has occurred on or within the individual rental unit leased to the tenant; (ii) the property was used in any way to further or promote criminal activity; (iii) the tenant, a member of the household, or any guest has engaged in criminal activity on or in the immediate vicinity of any portion of the premises; (iv) the tenant has allowed or invited a person to return or reenter the premises, knowing that that person has been removed and barred from the entire premises for engaging in criminal activity in the past; or (v) the tenant has failed to notify law enforcement or the landlord immediately upon learning that a previously-removed person has returned to or reentered the tenant's individual rental unit.   For purposes of the statute, criminal activity is (i) any activity that would constitute a violation of North Carolina's drug statutes (except for simple possession of a controlled substance), (ii) any activity that would constitute conspiracy to violate a drug provision, or (iii) any other criminal activity that threatens the health, safety, or right of peaceful enjoyment of the premises by other residents or employees of the landlord.  If the landlord proves any of the above five grounds for eviction, the tenant will be evicted, but he or she can avoid complete eviction by proving that she was not involved in the criminal activity, and either (i) didn't know or have reason to know of the activity or (ii) did everything that reasonably could have been expected under the circumstances to prevent the commission of criminal activity.  It isn't required that the landlord wait until actual criminal charges be brought before moving for eviction, but the court can stay a justified eviction if doing so would constitute a serious injustice under the circumstances.

Keep in mind that all of the above only applies to landlord/tenant relationships.  You can't use it to eject a trespasser, and it also can't be used against a mortgagor.  The plot will thicken if your "tenant" is a boyfriend/girlfriend or an adult child; the court will generally look to whether the parties initially agreed that the relationship would operate as landlord/tenant in making this determination.  If your lease agreement includes an option to purchase, then the relationship will be considered landlord/tenant only until the point at which the tenant exercises his or her purchase option.

So those are the (very limited) scenarios in which you, as a landlord, can move to evict a tenant in summary ejectment.  Remember that you are not permitted to resort to self-help measures such as changing the locks or cutting off the power.  If you have any questions, give us a call.  We do dearly love to talk.  Good luck!