AN ACT to improve the safe rental of certain properties by requiring COMPLIANCE with local ordinances and codes and establishing a maximum occupancy limitation.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 160D‑1207 reads as rewritten:

§ 160D‑1207.  Periodic inspections.

(a)        Except as provided in subsection (b) of this section, the inspection department may make periodic inspections only when there is reasonable cause to believe that unsafe, unsanitary, or otherwise hazardous or unlawful conditions may exist in a residential building or structure. However, when the inspection department determines that a safety hazard exists in one of the dwelling units within a multifamily building, which in the opinion of the inspector poses an immediate threat to the occupant, the inspection department may inspect, in the absence of a specific complaint and actual knowledge of the unsafe condition, additional dwelling units in the multifamily building to determine if that same safety hazard exists. For purposes of this section, the term reasonable cause means any of the following: (i) the landlord or owner has a history of more than two verified violations of the housing ordinances or codes within a 12‑month period, (ii) there has been a complaint that substandard conditions exist within the building or there has been a request that the building be inspected, (iii) the inspection department has actual knowledge of an unsafe condition within the building, or (iv) violations of the local ordinances or codes are visible from the outside of the property. In conducting inspections authorized under this section, the inspection department shall not discriminate between single‑family and multifamily buildings or between owner‑occupied and tenant‑occupied buildings. In exercising this power, members of the department shall have a right to enter on any premises within the jurisdiction of the department at all reasonable hours for the purposes of inspection or other enforcement action, upon presentation of proper credentials. Nothing in this section shall be construed to prohibit periodic inspections in accordance with State fire prevention code or as otherwise required by State law.

(b)        A local government may require periodic inspections as part of a targeted effort to respond to blighted or potentially blighted conditions within a geographic area that has been designated by the governing board. However, the total aggregate of targeted areas in the local government jurisdiction at any one time shall not be greater than 1 square mile or five percent (5%) of the area within the local government jurisdiction, whichever is greater. A targeted area designated by the local government shall reflect the local government's stated neighborhood revitalization strategy and shall consist of property that meets the definition of a blighted area or blighted parcel as those terms are defined in G.S. 160A‑503(2) and G.S. 160A‑503(2a), respectively, except that for purposes of this subsection, the planning board is not required to make a determination as to the property. The local government shall not discriminate in its selection of areas or housing types to be targeted and shall (i) provide notice to all owners and residents of properties in the affected area about the periodic inspections plan and information regarding a legislative hearing regarding the plan, (ii) hold a legislative hearing regarding the plan, and (iii) establish a plan to address the ability of low‑income residential property owners to comply with minimum housing code standards.

(c)        In no event may a local government do any of the following: (i) adopt or enforce any ordinance that would require any owner or manager of rental property to obtain any permit or permission under Article 11 or Article 12 of this Chapter from the local government to lease or rent residential real property or to register rental property with the local government, except for those individual properties that have more than four verified violations in a rolling 12‑month period or two or more verified violations in a rolling 30‑day period, or upon the property being identified within the top ten percent (10%) of properties with crime or disorder problems as set forth in a local ordinance, (ii) require that an owner or manager of residential rental property enroll or participate in any governmental program as a condition of obtaining a certificate of occupancy, (iii) levy a special fee or tax on residential rental property that is not also levied against other commercial and residential properties, unless expressly authorized by general law or applicable only to an individual rental unit or property described in clause (i) of this subsection and the fee does not exceed five hundred dollars ($500.00) in any 12‑month period in which the unit or property is found to have verified violations, (iv) provide that any violation of a rental registration ordinance is punishable as a criminal offense, or (v) require any owner or manager of rental property to submit to an inspection before receiving any utility service provided by the local government. Nothing in this subsection shall be deemed to prevent a local government from enforcing ordinances related to maximum occupancy, as that term is defined in G.S. 42A‑4, for a vacation rental property that is subject to the provisions of Chapter 42A of the General Statutes. For purposes of this section, the term verified violation means all of the following:

(1)        The aggregate of all violations of housing ordinances or codes found in an individual rental unit of residential real property during a 72‑hour period.

(2)        Any violations that have not been corrected by the owner or manager within 21 days of receipt of written notice from the local government of the violations. Should the same violation occur more than two times in a 12‑month period, the owner or manager may not have the option of correcting the violation. If the housing code provides that any form of prohibited tenant behavior constitutes a violation by the owner or manager of the rental property, it shall be deemed a correction of the tenant‑related violation if the owner or manager, within 30 days of receipt of written notice of the tenant‑related violation, brings a summary ejectment action to have the tenant evicted.

(d)       If a property is identified by the local government as being in the top ten percent (10%) of properties with crime or disorder problems, the local government shall notify the landlord of any crimes, disorders, or other violations that will be counted against the property to allow the landlord an opportunity to attempt to correct the problems. In addition, the local government and the county sheriff's office or city's police department shall assist the landlord in addressing any criminal activity, which may include testifying in court in a summary ejectment action or other matter to aid in evicting a tenant who has been charged with a crime. If the local government or the county sheriff's office or city's police department does not cooperate in evicting a tenant, the tenant's behavior or activity at issue shall not be counted as a crime or disorder problem as set forth in the local ordinance, and the property may not be included in the top ten percent (10%) of properties as a result of that tenant's behavior or activity.

(e)        If the local government takes action against an individual rental unit under this section, the owner of the individual rental unit may appeal the decision to the housing appeals board or the zoning board of adjustment, if operating, or the planning board if created under G.S. 160D‑301, or if neither is created, the governing board. The board shall fix a reasonable time for hearing appeals, shall give due notice to the owner of the individual rental unit, and shall render a decision within a reasonable time. The owner may appear in person or by agent or attorney. The board may reverse or affirm the action, wholly or partly, or may modify the action appealed from, and may make any decision and order that in the opinion of the board ought to be made in the matter.

SECTION 2.  G.S. 42A‑4 reads as rewritten:

§ 42A‑4.  Definitions.

The following definitions apply in this Chapter:

(1)        Advanced payments. – All payments made by a tenant in a vacation rental agreement to a landlord or the landlord's real estate broker prior to occupancy for the purpose of renting a vacation rental property for a future period of time as specified in the vacation rental agreement.

(1a)      Landlord. – An owner of residential property offered for lease as a vacation rental with or without the assistance of a real estate broker.

(1b)      Maximum occupancy. – The maximum number of persons allowed in a vacation rental. The maximum occupancy is measured as an amount not exceeding four persons per bedroom.

….

SECTION 3.  G.S. 42A‑31 reads as rewritten:

§ 42A‑31.  Landlord to provide fit premises.

A landlord of a residential property used for a vacation rental shall:

(1)        Comply with all current applicable local ordinances and codes, including building and housing codes codes, to the extent required by the operation of the ordinances and codes. However, no new requirement is imposed if a structure is exempt from a current building or housing code.

(1a)      Comply with all applicable elevator safety requirements in G.S. 143‑143.7.

(2)        Make all repairs and do whatever is reasonably necessary to put and keep the property in a fit and habitable condition.

(3)        Keep all common areas of the property in safe condition.

(3a)      Accurately represent the number of bedrooms and bathrooms on the property and prohibit the rental of the property to a tenant if the maximum occupancy will be exceeded. For the purposes of this subdivision, the number of bedrooms and bathrooms on the property shall be determined by the most recent tax records for the subject property.

(4)        Maintain in good and safe working order and reasonably and promptly repair all electrical, plumbing, sanitary, heating, ventilating, and other facilities and major appliances supplied by him or her upon written notification from the tenant that repairs are needed.

(5)        Provide operable smoke detectors. The landlord shall replace or repair the smoke detectors if the landlord is notified by the tenant in writing that replacement or repair is needed. The landlord shall annually place new batteries in a battery‑operated smoke detector, and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered negligence on the part of the tenant or landlord.

(6)        Provide a minimum of one operable carbon monoxide alarm per rental unit per level, either battery‑operated or electrical, that is listed by a nationally recognized testing laboratory that is OSHA‑approved to test and certify to American National Standards Institute/Underwriters Laboratories Standards ANSI/UL2034 or ANSI/UL2075, and install the carbon monoxide alarms in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance. A landlord that installs one carbon monoxide alarm per rental unit per level shall be deemed to be in compliance with standards under this subdivision covering the location and number of alarms. The landlord shall replace or repair the carbon monoxide alarms within three days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant. At least every six months, the landlord shall ensure that a carbon monoxide alarm is operable and in good repair. Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery‑operated carbon monoxide alarm annually and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered as negligence on the part of the tenant or the landlord. A carbon monoxide alarm may be combined with smoke alarms if the combined alarm does both of the following: (i) complies with ANSI/UL2034 or ANSI/UL2075 for carbon monoxide alarms and ANSI/UL217 for smoke alarms and (ii) emits an alarm in a manner that clearly differentiates between detecting the presence of carbon monoxide and the presence of smoke. This subdivision applies only to dwelling units having a fossil‑fuel burning heater, appliance, or fireplace and in any dwelling unit having an attached garage. Any operable carbon monoxide detector installed before January 1, 2015, shall be deemed to be in compliance with this subdivision.

These duties shall not be waived; however, the landlord and tenant may make additional covenants not inconsistent herewith in the vacation rental agreement.

SECTION 4.  G.S. 42A‑32 reads as rewritten:

§ 42A‑32.  Tenant to maintain dwelling unit.

The tenant of a residential property used for a vacation rental shall:

(1)        Keep that part of the property which he or she occupies and uses as clean and safe as the conditions of the property permit and cause no unsafe or unsanitary conditions in the common areas and remainder of the property that he or she uses.

(2)        Dispose of all ashes, rubbish, garbage, and other waste in a clean and safe manner.

(3)        Keep all plumbing fixtures in the property or used by the tenant as clean as their condition permits.

(4)        Not deliberately or negligently destroy, deface, damage, or remove any part of the property or render inoperable the smoke detector provided by the landlord or knowingly permit any person to do so.

(5)        Comply with all obligations imposed upon the tenant by current applicable local ordinances and codes, including building and housing codes.

(6)        Be responsible for all damage, defacement, or removal of any property inside the property that is in his or her exclusive control unless the damage, defacement, or removal was due to ordinary wear and tear, acts of the landlord or his or her agent, defective products supplied or repairs authorized by the landlord, acts of third parties not invitees of the tenant, or natural forces.

(7)        Notify the landlord of the need for replacement of or repairs to a smoke detector. The landlord shall annually place new batteries in a battery‑operated smoke detector, and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered negligence on the part of the tenant or the landlord.

These duties shall not be waived; however, the landlord and tenant may make additional covenants not inconsistent herewith in the vacation rental agreement.

SECTION 5.  G.S. 42A‑33 reads as rewritten:

§ 42A‑33.  Responsibilities and liability of real estate broker.

(a)        A real estate broker managing a vacation rental property on behalf of a landlord shall do all of the following:

(1)        Manage the property in accordance with the terms of the written agency agreement signed by the landlord and real estate broker.

(2)        Offer vacation rental property to the public for leasing in compliance with all applicable federal and State laws, regulations, local ordinances and codes, and ethical duties, including, but not limited to, those prohibiting discrimination on the basis of race, color, religion, sex, national origin, handicapping condition, or familial status.

(3)        Notify the landlord regarding any necessary repairs to keep the property in a fit and habitable or safe condition and follow the landlord's direction in arranging for any such necessary repairs, including repairs to all electrical, plumbing, sanitary, heating, ventilating, and other facilities and major appliances supplied by the landlord upon written notification from the tenant that repairs are needed.

(4)        Verify that the landlord has installed operable smoke detectors and carbon monoxide alarms.

(5)        Verify that the landlord has annually placed new batteries in a battery‑operated smoke detector or carbon monoxide alarm. Failure of the tenant to replace the batteries as needed shall not be considered negligence on the part of the real estate broker.

(6)        Verify that the number of bedrooms and bathrooms advertised for the vacation rental property accurately reflects the most recent tax records for the subject property.

(7)        Prohibit the rental of the property to a tenant if the maximum occupancy exceeds four persons per bedroom.

(b)        A real estate broker or firm managing a vacation rental property on behalf of a landlord client shall not become personally liable as a party in any civil action between the landlord and tenant solely because the real estate broker or firm fails to identify the landlord of the property in the vacation rental agreement.

SECTION 6.  This act is effective when it becomes law.