USA – NORTH CAROLINA Law and Practice Contributed by: John Livingston and Brittani Miller, Kilpatrick Townsend & Stockton LLP
To ensure that a tenant leaves on the date original - ly agreed, the landlord should provide clear notice before the lease term ends, reminding the tenant of the expiration date and their obligation to vacate. 6.18 Right to Assign a Leasehold Interest A tenant’s ability to assign their leasehold interest or sublease all or a portion of the leased premises depends on the terms of the lease agreement. Gen - erally, commercial leases require the landlord’s prior written consent for an assignment or sublease, and the landlord may impose certain conditions on such assignment or sublease including the requirement that the assignee or sublessee meets the landlord’s finan - cial and operational qualifications and agrees to com - ply with all terms of the original lease. Additionally, the tenant may be required to remain liable under the lease, even after the assignment or sublease. Land - lords may also impose administrative fees or require indemnification from tenant for any damages or costs resulting from the assignment or sublease. 6.19 Right to Terminate a Lease Events that may give a landlord the right to terminate a lease include the tenant’s failure to pay rent or other amounts due and owing under the lease or violations of lease terms. The lease may also include provi - sions allowing termination for property damage or if the tenant abandons the premises. For tenants, the right to terminate may arise if the landlord breaches material lease obligations, such as failing to provide access or services necessary for the tenant’s use of the property. Additionally, both parties may have the right to terminate under casualty or condemnation clauses, which address unforeseen events such as natural disasters or governmental actions that render performance impossible. Termination rights may also be tied to bankruptcy of either party or mutual agree - ment to end the lease early. The lease agreement typi - cally outlines the procedures for termination, including notice requirements, cure periods and any penalties or damages. 6.20 Registration Requirements Leases are not required to comply with registration requirements; however, they must be executed by both the landlord and tenant to be valid. If both par - ties agree, a memorandum of lease can be recorded
in the county where the property is located in order to protect the tenant’s leasehold interest against future purchasers of the property. Recording is subject to applicable fees, which are typically paid by the party requesting the recording, along with any associated notary fees. 6.21 Forced Eviction A tenant can be forced to leave the leased premises prior to the originally agreed-upon expiration date in the event of default, such as failure to pay rent, viola - tion of lease terms or illegal activity. To evict a ten - ant, the landlord must provide the tenant with proper notice of default and an opportunity to cure the issue if required by the lease agreement. If the tenant does not remedy the default, the landlord can file an evic - tion complaint in the jurisdiction where the property is located. If the court rules in the landlord’s favour, the tenant may be ordered to vacate the property. The entire process usually takes several weeks, depending on court schedules, but delays can occur if the tenant appeals the decision or contests the eviction. 6.22 Termination by a Third Party The government or a municipal authority, under cer - tain circumstances, typically through the exercise of eminent domain and condemnation, may have the ability to terminate a lease, depending upon the amount of property taken and the terms and condi - tions of the lease agreement. In the event of an exer - cise of eminent domain, the landlord typically receives any compensation paid by the government or munici - pal authority, and the terms of the lease dictate how much, if any, of such compensation the landlord would be required to pay to the tenant. 6.23 Remedies/Damages for Breach In the event of a tenant breach and lease termina - tion, in addition to charging the tenant for the remain - ing rent due for the term of the lease, landlords can seek damages for physical damage to the property and other losses directly caused by the breach, such as lost rental income, expenses incurred to re-lease the property (eg, advertising, broker fees or tenant improvements) and attorneys’ fees, if these remedies are provided for in the lease agreement. However, landlords are obligated to mitigate damages by mak - ing reasonable efforts to re-rent the property. Security
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