Court of Appeals Finds that Technical Violations of Residential Rental Agreements Act Do Not Support Rent Abatement Award
On May 19, 2015, the North Carolina Court of Appeals reversed a trial court award of treble damages to a tenant for violations of the Residential Rental Agreements Act (RRRA) and the Unfair and Deceptive Trade Practices Act. The dispute centered on the existence or operability of a smoke/carbon monoxide detector in the rented premises. The landlord began eviction proceedings for non-payment of rent, and the tenant counter-sued for violations of the implied warranty of habitability included, by statute, in every lease. The trial court determined that the Landlord had failed to verify the operability of the detector in violation of the RRRA. The court then concluded that such a violation entitled the Tenant to rent abatement and also constituted an unfair trade practice, which meant that the rent abatement was tripled.
The Court of Appeals reversed this decision, and determined that in order to be entitled to rent abatement, a tenant must do more than merely prove a technical violation of the RRRA. Rather, the tenant must prove (and the court must conclude) that the violations of the RRRA actually render the premises unfit for human habitation and how that devalues the fair rental value of the property. While landlords (including both homeowners and property managers) should of course do everything they can to avoid even technical violations of landlord-tenant law, this Court of Appeals decision provides some comfort that minor violations do not automatically constitute grounds for rent abatement and claims for unfair and deceptive trade practices.