Legislative Update - Landlord/Tenant Law
Payment of Rent during Appeal
On October 1, 1998, North Carolina enacted Session Law 1998-125, entitled "An Act To Require Tenants To Pay To The Clerk Of Court The Amount Of Rent In Arrears To Stay The Execution Of Judgment For Summary Ejectment Pending Appeal To District Court And To Post A Bond For Any Further Appeals". This law offers substantial new assistance to landlords that are attempting to remove clients who default under their leases. It does so by requiring tenants who attempt to "buy some time" by appealing after a judgment for summary ejectment is entered against them to do, literally, just that - buy the time it takes for the appeal to be heard.
Specifically, the statute requires that any tenant who exercises his/her right to appeal a judgment for summary ejectment and requests a trial de novo in district court (usually in hopes of gaining additional time to locate new space to rent) must now take a more significant step before the clerk will order a stay on the judgment to prevent the landlord from actually evicting the tenant. Under new N.C.G.S. ? 42-34, the tenant must now pay to the clerk, up front, the amount of any rent in arrears that is not in dispute, as well as paying all future rent in full as it becomes due. Under the previous version of this statute, the tenant was only required to sign an undertaking promising to pay rent as it became due thereafter. Since past due rent will now have to be paid in up front, plus all additional rent thereafter, that money will then automatically be payable to the landlord by the Court, assuming the judgment for summary ejectment is eventually upheld by the District Court. In effect, the tenant is required to guarantee the landlord's recovery for all undisputed past rent and all future rent if he/she wishes to stay on the premises pending a hearing before the District Court.
As you can imagine, we anticipate this will be a useful bargaining tool for the landlord. The tenant will now face a more difficult decision prior to the institution of a summary ejectment action. If the tenant is not prepared to move out of the premises immediately or to satisfy the landlord's claim for past-due rent, the tenant will be faced with the choice of being evicted following a summary ejectment hearing or paying all undisputed back rent into the clerk's office upon filing the appeal. While certainly not a cure-all, we expect this new provision will certainly be helpful to landlords in dealing with late paying clients. Furthermore, and perhaps even more importantly, the landlord will now have a simple and guaranteed source for collecting the money owed by the tenant for back rent - the Clerk of Court who is holding the tenant's money during the appeal.