AN ACT to clarify late fees charged to residential tenants.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 42‑46(a) reads as rewritten:
"(a)	In all residential rental agreements in which a definite time for the payment of the rent is fixed, the parties may agree to a late fee not inconsistent with the provisions of this subsection, to be chargeable only if any rental payment is five days or more late. If the rent:
(1)	Is due in monthly installments, a landlord may charge a late fee not to exceed fifteen dollars ($15.00) or five percent (5%) of the monthly rent, whichever is greater.
(2)	Is due in weekly installments, a landlord may charge a late fee not to exceed four dollars ($4.00) or five percent (5%) of the weekly rent, whichever is greater.
(3)	Is subsidized by the United States Department of Housing and Urban Development, by the United States Department of Agriculture, by a State agency, by a public housing authority, or by a local government, any late fee shall be calculated in accordance with subdivisions (1) and (2) of this subsection on the tenant's share of the contract rent only, and the rent subsidy shall not be included."
SECTION 2.  This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 16th day of July, 2003.

	s/	 Marc Basnight
	 President Pro Tempore of the Senate

	s/	 Richard T. Morgan
	 Speaker of the House of Representatives

	s/	 Michael F. Easley
	 Governor

Approved 10:56 a.m. this 1st day of August, 2003