The Conference Room--Answers to Questions on N.C. Law

If a Tree Falls and Nobody Hears it...Do You Have a Lawsuit?

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Hurricane season officially began on June 1.  Around here, we have had a little bit of experience in the Hurricane department, so when we see the Weather Channel hanging around, we know to get to the store, stock up on bottled water, propane and Spam and hunker down for a good named storm.  After it is over, everybody heads blinking into their yard checking out the damage and swapping tall tales of much bigger storms with their neighbors.  The situation happens fairly frequently that a tree on one property has fallen and damaged a house or fence on another property, or sometimes caused someone personal injury.  Who is responsible?  First, most people have homeowner's insurance and if your house or even your car gets hit with the neighbor's formerly prized pecan tree, your insurance will usually pick up the tab.  It may be a good idea as part of your hurricane season checklist to review your homeowner's policy and check for what exactly your coverage is for trees and other things, and what amount of a deductible you will pay. 

Second, forgetting about insurance, in North Carolina, your neighbor generally has no duty to pay your damage, even if it was his tree that hit your house.  After all, he didn't knock it down onto your property, it was an "Act of God," and He is beyond the subpoena power of the North Carolina Courts.  However, you may have a case against that neighbor in negligence if he knows that the tree is unhealthy or diseased or otherwise fails to maintain the tree. 

Where there is negligence, there is usually a defense of contributory negligence.  So if you asked your neighbor if you could remove the diseased tree and he agreed, but you failed to do so before the storm knocked it on your roof, the neighbor would have the defense of contributory negligence.  Other jurisdictions have considered it contributory negligence for failing to prune a diseased limb that hung over your property line. 

If there is a case against your neighbor, and you are covered by insurance, usually your insurance company will pay you and then may maintain an action against the neighbor to get their money back.  If that happens, talk to the attorney for your insurance company.  Sometimes you can ride his coattails and recover your deductible as well. 

--Bradley A. Coxe is a practicing attorney in Wilmington, NC who specializes in Personal Injury, Medical Malpractice, Contract and Real Estate disputes and all forms of Civil Litigation.  Please contact him at (910) 772-1678.  

Rights of a Landlord and Duties of a Tenant

In an earlier post, I discussed the Rights of a Tenant and Duties of a Landlord for residential rentals under North Carolina law. Today I thought I would discuss the flip side. If you are the landlord, what rights to you have and if you are a tenant, what are your duties? (These rules are for residential leases, commercial leases have different rules).

Again, as before, the controlling document is the lease agreement. In general however, the tenant has the following duties and responsibilities:

1. Pay the rent on time under the terms of the lease. Remember, this is a separate duty of the tenant and therefore the tenant can’t refuse to honor this duty even if the landlord neglects their duties.

2. Keep the property clean and safe. Do normal household maintenance. Take out the garbage, keep the plumbing clean, keep the yard maintained, etc.

3. Cause no damage to the property or allow a guest to cause damage.

4. Replace the batteries as needed in a battery-operated smoke detector and notify the landlord if it needs to be repaired or replaced.

5. If you decide to move out, give your landlord notice. Many leases will provide for the correct notice of termination. Keep in mind that the notice requirement is for the end of the lease term, not a way to terminate in the middle. For example, if you have a one year lease, from January to January, and you see a 30 day notice requirement in your lease, that doesn’t mean you can give 30 days notice in March and move out in April without breaking the lease. That type of notice requirement means that in December you have to give notice that you will move out in January. If not, you may automatically have the lease renewed for another month or even year. If the lease doesn’t specify notice, North Carolina law states that proper notice is: 2 days if you rent weekly; 7 days if you rent monthly, (“month to month”); 30 days if your lease is for a year (even if you have to pay rent monthly); and 30 days if you own a mobile home and rent the lot. There is no law specifying the type of notice required, but it is always better to put it in writing so that you have a written record if questions come up later.

A landlord has the following rights:

1. To rent the property for whatever amount you choose, although you cannot raise rent during the term of the lease and you must give proper notice if you change the rent at the end of the term.

2. You can rent to whomever you choose, and refuse to rent to whomever you choose, except you cannot refuse to rent on the basis of race, color, religion, ancestry, sex, country of birth, handicap or family status (for example in most circumstance you cannot refuse to rent to someone with children).

3. You can reserve the right to enter, inspect and make repairs on or show the rental property at reasonable times and in a reasonable manner.

4. You have the right to have the property returned at the end of the term undamaged except for ordinary wear and tear.

5. You can charge a late fee on any rental payment five days or more late, of $15 or 5% of the payment, whichever is more. You can only impose one late charge per pay period and you can’t deduct a subsequent rental payment so as to cause the subsequent rental payment to be in default.

6. You are entitled to keep any improvement affixed to the property such as carpet, light fixtures, shutters, trees, etc.

7. You can charge a security deposit equal to two weeks rent for a week to week lease; one and a half month’s rent for a month to month lease; and up to two months’ rent for a longer term. The landlord must deposit the security deposit in a bank or obtain a bond to secure repayment. If the tenant breaches the lease the security deposit can be used to repay rent owed, damage to the property, legal fees for eviction and liens created. If the tenant leaves without breaching the lease, the security deposit must be returned in 30 days in full or provide an itemized statement of any damage or injury together with the balance of the deposit. The landlord cannot withhold amounts from the security deposit for normal wear and tear. If the landlord withholds the security deposit without authority, he can be sued for the amount by the former tenant for the deposit amount and attorney fees.

8. A landlord can evict tenants for a breach of the lease by a special court proceeding called summary ejectment. A landlord cannot use self-help such as cutting off utilities or changing the locks. Summary ejectment takes place in Magistrate's Court. The Clerk of Court should have the special magistrate court forms you can use for an ejectment. An accelerated ejectment procedure is available if criminal activity (such as drug trafficking) has occurred at the residence.

--Bradley A. Coxe is a practicing attorney in Wilmington, NC who specializes in Personal Injury, Medical Malpractice, Contract and Real Estate disputes and all forms of Civil Litigation.    

The Real Estate Contract--An Overview

The growth of southeastern North Carolina has resulted in a local real estate boom never before seen in the area and continues despite the real estate slow down in the rest of the county.  An unfortunate side effect of the dramatic increase in both real estate transactions and property values has been a corresponding explosion in real estate disputes.  As the decision to buy or sell a home is one of the biggest financial decisions a person can make, it is important to consult an experienced real estate attorney if you have any questions or concerns about a potential real estate transaction.

The real estate contract is the basic document that sets forth the rights and obligations of the parties.  To be enforceable, a contract for the sale of land must be in writing and unambiguous, and must contain certain information about the transaction, such as the parties, the purchase price, and a specific description of the property being sold.  A standard offer to purchase form created by realtors and attorneys is most typically used. 

The real estate contract is just a contract or agreement to transfer real estate for a certain amount of cash or other consideration at a future date, the “closing.”  Even though most real estate contracts contain a deadline for this closing, a party generally cannot terminate the contract for failure to close by the deadline unless the contract has language stating that “time is of the essence.”  If the contract does not contain a “time is of the essence” clause, both parties have a reasonable time after the stated deadline within which to close.  Nevertheless, a delay in closing may subject the delaying party to a claim for damages for reasonably foreseeable damages caused by the delay.

If a buyer or seller breaches a contract for the sale of real property, the non-breaching party can sue for money they lost because of the breach.  Keep in mind this is not the full purchase price of the property, only the difference between the contract price and the price you could sell it to someone else for, plus incidental costs such as additional interest incurred, or advertising costs.  Alternatively, because each piece of property is unique, courts have the authority to order a breaching party to specifically perform under the contract – i.e., make a buyer buy or a seller sell.

Many real estate disputes deal with the non-disclosure of material facts regarding the property.  A fact is “material” if it is likely to influence the decision of a potential buyer, such as the square footage of a house, any hidden construction defects, or flooding problems.  For pre-existing homes, sellers generally are required by law to provide a disclosure statement providing information regarding known problems or conditions with the house.  Sellers of raw land and newly constructed homes are exempt from having to provide a disclosure statement.

A seller has a duty to disclose all material facts to a prospective purchaser. Nevertheless, as North Carolina is essentially a “buyer beware” state, a seller generally will not be liable for failure to disclose a material fact if the undisclosed information could have been discovered by the buyer through reasonable investigation, unless the seller engaged in some deception designed to make the buyer forego further investigation.  Buyers who purchase a new home directly from a builder have additional rights by virtue of being the first purchaser of the house.

In many instances, especially when moving from another area, a buyer may engage a buyer’s broker to locate a desirable home and conduct the “due diligence” required for a real estate transaction.  A buyer’s broker has a duty to disclose to his client all material facts actually known or discoverable by him or her through reasonable diligence.  Engaging a buyer’s broker generally relieves the buyer from the responsibility of making an independent investigation of the property, as the duty to investigate falls to the agent.