September 27, 2021

Volume XI, Number 270

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September 27, 2021

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NC Landlords Could Face Wave Of Class Actions Over Eviction Fees

Apartment companies and other landlords could face a wave of class action lawsuits in North Carolina thanks to a recent appeals court decision. In June, a three-judge panel of the Fourth Circuit Court of Appeals issued an unpublished opinion finding that, prior to June 25, 2018, North Carolina landlords were prohibited from charging tenants filing fees and service fees in connection with residential landlords (Suarez v. Camden, case 19-1367). Last July, the Fourth Circuit denied requests to publish the decision and denied a request by the defendant, Camden Property Trust, and the Apartment Association of North Carolina to rehear the case en banc (before the entire court). Therefore, the unpublished opinion is likely the final word for now (unless or until a new panel of the Fourth Circuit considers the issue).

Background of Evictions Fees

At least 17 class actions challenging eviction fee charges in North Carolina were filed since 2016. These cases argue that North Carolina’s Residential Rental Agreements Act (N.C.G.S. Section 42-46) prohibited landlords from charging filing fees, service of process fees, and attorneys’ fees (collectively “Eviction Fees”) when it listed certain allowable fees and prohibited the charging of “other fees.” The General Assembly amended the law in 2018 to expressly allow landlords to charge these fees, but landlords still face potential exposure for charges imposed before the amendment became effective in June 2018.  At least five class actions have settled, and settlement is possible in several others.  

Reported Settlements to Date1 

Landlord

Payment per Collection Letter

Payment for those who paid Eviction Fees

Total Settlement Amount

Mid-America

$25. Max $75

$800

$1,100,000

NRP Group

$50. Max $150

$1,225

$425,000

Southwind Realty

$50. Max $150

$175 per charge

$3,750,000

Grubb Management

$50. Max $150

Up to $600

$475,000

Bridge Property Mgmt

$50. Max $150.

$605

$510,000

Next Wave

In light of the 4th Circuit opinion in Suarez, plaintiffs’ counsel have indicated they plan to file a new wave of class actions against North Carolina landlords, most of which routinely passed on filing and service fees to tenants being evicted. The new class actions come at a time when many landlords are already facing significant financial pressure as a result of the pandemic and eviction moratoriums.


These are cases which have received preliminary or final approval from the Court.  Only key monetary provisions are summarized here.  The full details of each settlement are available online.

Copyright © 2021 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 241
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About this Author

Mark P. Henriques, Womble Carlyle Law Firm, Jury Trial Attorney, Non-Compete Agreements Lawyer
Partner

Mark has successfully litigated cases involving fraud, unfair trade practices, class actions, non-compete and non-disclosure agreements, and breach of contract. He has experience in state and federal court in both North and South Carolina. Mark has prevailed in numerous trials, arbitrations and mediations. Mark has served as first chair in more than eight jury trials, five of which lasted a week or more. He has successfully argued cases before the Fourth Circuit Court of Appeals and the North Carolina Supreme Court.

704-331-4912
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