North Carolina Eviction Process

Process Overview

Our historical eviction rate pre COVID-19 is much lower than industry average of less than 0.5%. Even though evictions are rare, they can be somewhat complicated and concerning for you as the owner. The process map below outlines the process of the eviction. In addition, you may want to checkout the podcast we did on enforcing the lease and terms of the lease here: Good Cop, Bad Cop: Rent Collection & Lease Enforcement

At any point during the eviction process, if the tenant cures the default, we may drop the eviction.

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What to Expect After the Eviction

The tenant's security deposit can be dispositioned after the lease terminates or after the lockout is complete. Any funds held will be applied to charges as the appear on the ledger in chronological order. We will continue to report any delinquent balance to the credit bureaus and any future amount paid will be applied to delinquent charges and distributed to you accordingly. While we are hopeful that tenants will pay, if they have gotten to the point that they are willing to have an eviction on their record and a delinquent balance reported to the credit bureaus, the odds of them paying the full amount are low.

But Don't You Screen?

Yes. And historically, that screening has worked very well. Even in the beginning of the pandemic when some management companies saw 25%+ of tenants go delinquent, we only had 3-5% delinquency. That number is still very high for us but far lower than most of our peers. We take great care to have some of the most stringent standards in the area around credit, delinquent accounts, prior evictions, rental history and income. In fact, only about 25% of tenants who apply actually make it through our screening process. That's why we're so confident in our process that we offer the eviction protection.

However, sometimes life happens. People may lose a job, go through an unexpected separation, have a really large medical expense. Those are things that could happen to anyone and are very difficult to screen for. It's also very difficult to screen for people who will take advantage of the moral hazard created by the pandemic when they have great, verifiable rental history, credit, criminal and income history.

Renting your property is a business. And while we do our best to mitigate the risk associated with doing so, inherently, every business does have some level of risk.

Impact of COVID-19 on Delinquency and Evictions

Macro Economic & Landlord Impact

According to data from nmhc.org, rent delinquencies have as much as doubled since the pandemic began. The third party we use for reporting rental payments normally sees a huge decline in delinquencies for management companies such as ours that utilize their service, but they have also reported huge spikes in delinquencies since the pandemic. Since the begin of the pandemic, we've worked very hard to reach out to those who are having trouble paying and most tenants are either not impacted or are making an honest effort. However, the various interventions from the CDC and other governmental agencies have mostly created a moral hazard by sending the message to tenants that it's OK to not pay rent.

As opposed as we are to national and local legislation, there is not much we can do to control it.

Local Impact on Process & Timelines

What Can be Filed

Prior to the Supreme Court's ruling on August 26, 2021, filing for non-payment of rent was an exercise in futility. It was easy for tenants to claim they had been impacted by COVID-19 with little-to-no evidence and judges would automatically defer or dismiss cases without considering the tenant's past efforts to pay. Currently, federal prosecutors have threatened apartment communities and property managers that filing for a tenant holding over after the termination of the lease could be considered a retaliatory eviction and a federal crime. These incredible and unprecedented restrictions have left only other obvious, uncorrected, easily proven lease violations as causes for eviction.

Courts

We have seen courts close for weeks at a time with very little notice. Some court dates have been getting scheduled for approximately two months out when it used to be typical to be scheduled one to two weeks out. We've heard of magistrates in some jurisdictions in NC completely ignoring the CDC form and guidelines and making up their own rules.

Attorneys

Attorneys have had a very challenging time with the constantly changing rules, surge in cases, abrupt court shut-downs and rescheduling. All of the new complexity and volume has overwhelmed attorneys and caused delays on their end as well. The attorneys we work with are real professionals but even though they can process several hundred evictions per day, even they have been overwhelmed.

Notice Periods

If your property is a "covered property" per the CARES act passed at the beginning of the pandemic, the notice period for non-payment of rent increased from zero days to 30 days by federal mandate.