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[NC] Can a landlord charge a lease buyout fee if the lease has no fixed term or expiration date?
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My previous landlord in North Carolina is trying to charge for a lease buyout, but our tenancy was month to month. We signed a lease that had no lease end date, and we gave more than 30 days' notice to vacate. Wouldn't that be considered a periodic tenancy, so they can't charge a lease buyout fee?
I understand how frustrating it can be to deal with disputes over lease agreements. Can you confirm if you have any written communication regarding the month-to-month arrangement with your landlord?
We discussed it with the previous manager, who left right before our move-out date. The new manager says she doesn't have knowledge of it.
Have you already vacated the property, and if so, when did you officially move out?
We signed the month-to-month lease with the previous manager.
Is there anything else the Landlord-Tenant Lawyer should know before I connect you? Rest assured, they'll be able to help with your lease buyout issue.
No.
Hey there! I'm Benjamin, an attorney with many years of experience. I understand you're dealing with a situation involving a lease buyout charge from your previous landlord in North Carolina, despite having a month-to-month tenancy and providing more than 30 days' notice to vacate. Were there any terms within the written lease that outlined a termination or buyout fee? Was there specific language about necessary notice requirements? Could you share more about any specific concerns or questions you have regarding this situation?
Lessee's Option to Buyout Lease: At any time during the term of the lease agreement, the lessee may buy out the lessee's obligations and cancel this lease agreement if the lessee complies with the following. The lessee must: 1. Complete and sign a "Transfer/Subleasing/Buyout Form" from the lessor, and; 2. Pay a buyout fee equal to the sum of three (3) months' rent (the security deposit shall be forfeited by the lessee to the lessor and will not be used toward the three months' rent due or any other balance due), and; 3. Pay all move-out charges, late fees, NSF fees, animal fees, and any other obligations arising under the lease agreement. If any obligation is unpaid, the lessee shall be in default and bound to this lease agreement, remaining responsible for all rent and fees accrued through the lease expiration date, and; 4. Incentives are based upon a 12-month lease, and the lessor depends upon the entire completion of the lease agreement to allow for incentives to be offered to the lessee. Thus, all incentives received which are noted in the lease agreement and/or any addenda must be paid back at the time of buyout, including but not limited to free rent, money back, deductions in rental rate, etc.
1.4 Term: Lessor does not provide short-term leases, unless approved in writing by director. The lease agreement is based on the terms and conditions in this document. Lease Start Date: 05/02/2026. Lease Expiration Date: [blank]. 1.5 Rent: Rent is $1,591.00 per month, due on or before the 1st of each month by 5:00 PM using the Tenant Online Portal or an approved electronic cash payment facility. We reserve the right to refuse cash payments. At our discretion, we may convert any and all checks via the Automated Clearing House (ACH) system for the purpose of collecting payments. In certain circumstances, such as for technical or processing reasons, we may process your payment as a check transaction. A convenience fee may be applied to credit card payments. All payments accepted will be considered payments with reservation. Late fee amount: 5% of rent charged on the 5th of the month at 5:01 PM, no exceptions. In no event shall any charge or fee for late payment of rent exceed five percent (5%) of the amount of rent that is past due. All fees, fines, pro rata utility payments, and rent not paid by the lessee when due or upon demand of the lessor shall be deemed additional rent. Concessions are lost if you pay late: if rent is ever paid after the 5th of the month, any concession such as free rent or reduced rent shall be removed from this agreement, and any free rent shall become due from the lessee. No proration of rent: rent will not be prorated for any reason other than new move-ins. Advanced payments: the lessor will not prorate or refund any rent paid in advance, including renewals. Late or partial payment: the lessor is not obligated to accept any late or partial payment, but may do so in its sole discretion. The lessor's acceptance of any late or partial payment shall not change the due date or amount of any required payment in the future, nor shall it relieve the lessee from any obligation to pay the balance of the rent and any applicable late fees or charges. Non-renewal or expired lease: rent goes up by $100.00 per month upon lease expiration without exception (1st month $100, 2nd month $200, 3rd month $300, and so on). The lessor may provide notice of non-renewal to the lessee requiring the lessee to vacate the premises. If the tenant retains occupancy past lease expiration (i.e., month-to-month status), the tenant forfeits the security deposit.
The buyout clause is written for cancellation during an unexpired fixed lease term. It repeatedly refers to the "term" of the lease, rent through the "lease expiration date," incentives based on a "12-month lease," and completion of the entire lease agreement. But your lease shows a start date of May 2, 2026, a blank expiration date, and no stated 12-month term. The lease also expressly recognizes that occupancy after expiration can become "month to month status." Since there is no expiration date in your signed agreement, the landlord will have difficulty identifying what fixed term you supposedly ended early or calculating the date through which you remained obligated.
Under North Carolina law (N.C. Gen. Stat. § 42-14), a month-to-month tenancy may generally be terminated with seven days' notice, although a lease may require a longer contractual notice period. You provided more than 30 days' notice.
The landlord may argue that the missing expiration date was a clerical omission, that the lease was intended to last 12 months because the form refers to 12-month leases, or that the buyout clause applies "at any time" after the start date. But that argument is not strong. The lease does not actually state that your term was 12 months. General form language about incentives being "based upon a 12-month lease" is not the same as inserting a definite expiration date into the term section.
A court ordinarily reads the agreement as a whole. When lease language remains ambiguous, North Carolina authority recognizes that ambiguity may be construed in favor of the tenant, especially where the landlord drafted the lease. From what you have provided, it does not appear that you would be responsible for a buyout.
Our month-to-month tenancy was with the previous rental manager, but he left shortly before our move-out date. The new manager is saying that the month-to-month status was not noted on the account.
She is also trying to charge us for carpet cleaning, but we lived in the unit for 5 years. Isn't there some issue with the useful life of carpet?
I understand your frustration with the new manager's stance. Regarding the month-to-month tenancy, it's unfortunate that the previous manager didn't document it properly. However, your consistent payment pattern and the absence of a fixed term in the lease could support your case. As for the carpet cleaning, you're right to question it. After five years, normal wear and tear is expected, and landlords typically can't charge for that. Carpet has a useful life, and after about 7 years of life, it will be considered depreciated with no value.
Thank you. Also, we moved out May 29th, but we were unable to return the keys until June 1st. They were sent back via certified mail, which the landlord received on June 1st at 3:10 PM. She is trying to charge for the whole month of June. I told her that the most that can be charged is the daily rent for June 1st. Is this true?
You're correct in your understanding. Typically, if you vacated the property and returned the keys on June 1st, you should only be responsible for the rent up to that date, not the entire month of June. Since you returned the keys on June 1st, the landlord should only charge you for that day, not the entire month.
For move-out charges, are landlords required to provide an itemized list of fees with actual receipts from reputable vendors for the costs listed? The manager stated that North Carolina law does not require landlords to provide third-party vendor receipts for each deduction. She said the North Carolina Tenant Security Deposit Act requires an itemized accounting of deductions.
In North Carolina, the Tenant Security Deposit Act does require landlords to provide an itemized list of deductions from the security deposit. However, it doesn't specifically mandate that landlords provide third-party vendor receipts for each deduction. The itemized list should clearly outline the charges and the reasons for them, but the law doesn't require landlords to include receipts from vendors. If you believe the charges are unreasonable or not properly documented, you may want to discuss this further with the landlord or consider sending a letter contesting the charges.
Okay, thank you. You answered all of my questions.
Have a great day!
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