Bad form?

Listen to this article

This month, 61-year-old John Lee was out in the cold — or, rather, the August heat — when he was evicted from his south Charlotte rental home near the airport.

Although he was behind on rent for June, which is what started the eviction process, he says Carolina United Realty, the 4108 Park Road-based property management company, was in the wrong, too.

CUR, Lee says, had him sign an outdated lease in April for the home at 6626 Evanton Loch Road and then expected him to pay penalties on top of late charges.

The lease form says on the bottom of the first six pages that the North Carolina Association of Realtors revised it in October 2009. Lee said a magistrate, during a court hearing on the eviction proceedings, told him that a landlord can’t claim penalties on top of late charges. An October 2010 state law change sets specific amounts that could be charged by a landlord.

During the hearing, the magistrate blew up at CUR, saying the form was outdated, Lee said.

“It’s a case of a major property owner using an out-of-date form,” Lee said. “Their practices stink.”

Jim Acord, owner and broker-in-charge of the property management company in Charlotte, disputes Lee’s claims.

“Our lease was good enough to get him evicted in front of a judge,” Acord said. “If it was an outdated lease, I’m sure he wouldn’t have lost the case. He is wrong all the way around.”

In fact, Will Martin, legal counsel for the North Carolina Association of Realtors, said the most recent major revisions to the lease happened in October 2009, the same revision date that appears on Lee’s lease.

But even if tenants sign a lease that doesn’t reflect the latest changes in state rental law, they can still be evicted like Lee and his wife were Aug. 1, experts say.

Tom Miller, an attorney with the North Carolina Real Estate Commission, said new leases are created whenever there are changes to state and local laws — or simply shifts in industry practices.

“That doesn’t necessarily mean the old version is invalid,” Miller said, adding that there is no state statute that requires a landlord to use any particular lease form.

Charlotte-based property management company TR Lawing Realty uses RealFast software — the same software Acord said CUR uses — to keep its leases current, TR Vice President Joe Rempson said.

Rempson said he has seen property managers and landlords get into trouble with magistrates for using outdated leases and for charging more in court fees or late fees than what state law allows.

But, he added, outdated leases usually don’t keep a tenant from being evicted.

Still, using old forms can cause headaches or worse for a property management company or landlord, experts say.

“It behooves the property owners, the managers and the residents for the owners to use a fresh lease,” said Ken Szymanski, executive director of the Greater Charlotte Apartment Association. “If they use something that is 3 years old, it might be unenforceable or unlawful. It might call for certain things that have since changed, and if you didn’t incorporate them you might get in trouble.”

Szymanski warned against using generic leases from, say, office-supply stores. Such leases typically are not tailored to the laws of the state the store is operating in, he said.

Also, when a generic or outdated lease is used, a landlord and tenant could agree to things “they might not have the prerogative to agree to if it’s not the state law,” he said.

He said the Apartment Association of North Carolina, for which he is also executive director, gives updated leases to its members, adding that approximately 40 percent of GCAA’s members use the lease provided by the group.

Rempson also pointed out that generic leases might omit requirements, such as one passed in North Carolina in January 2010 that requires carbon monoxide detectors in each floor of a home.

And Miller said generic forms might leave out an important state mandate that landlords disclose to a tenant the name and address of the financial institution where the tenant’s security deposit is being held in a trust account.

“It (a generic lease) may still be effective to create landlord-tenant relationships, but it may put the landlord in a situation of violation because it skips over a required element,” Miller said.

As for Lee, who moved to Charlotte from Savannah, Ga., this year and began renting the Evanton Loch Road home for $1,625 a month, he and his wife, Zulema, have found another place to live since being evicted.

In a July interview, he told The Mecklenburg Times that his wife was looking for work and that he was making $40,000 a year working temporary jobs.

But it wasn’t enough to pay the rent for the Evanton Loch Road home, which he said was being rented at an above-market value, adding that a real estate agent “snookered” him into renting it.

In July, the home’s air conditioner broke, Lee said. He said he was told that the landlord would not repair it until the rent was paid.

Even though he’s moved on to a new home, Lee is still bitter about the lease form CUR used.

Acord is still bitter, too. He says Lee’s unpaid rent of $3,200, plus the $400 it costs to evict a tenant, left the property owners with a hefty bill to cover. The house is still not rented, costing the owners another $1,600 in rental income.

“These people are out over $5,000 because this guy didn’t pay,” Acord said. “That is a large number to a family that works hard with a little baby.”

At the court hearing, Lee said, a representative for CUR seemed surprised when the magistrate told him that the lease form had changed in 2010.

“That tells me the (state real estate) board has not done any efforts to tell him of the changes,” Lee said.

But Acord, who said he’s been a real estate agent since 1997 and a full-time property manager for five years, said the lease forms he uses at CUR are provided by the North Carolina Association of Realtors through an automated, computerized service from Frisco, Colo.-based RealFast. Currently, CUR has about 300 active leases.

Acord said that when changes must be made to leases — either through new state legislation or a decision from the North Carolina Real Estate Commission — real estate agents are made aware of the changes from the NCAOR.

According to the Charlotte Better Business Bureau, CUR has an “A” rating and was accredited Sept. 20, nearly a year ago. It has had one customer complaint closed in the past 12 months, according to the Charlotte BBB.

The complaint, filed Sept. 23, was for “problems with product/service,” according to the BBB’s website, which provided no further details.

CUR, the BBB says, made a good faith effort to resolve the complaint but the customer not satisfied with the response.

Ramsey can be reached at [email protected].