Thank you to Lynch & Eatman, LLP for updating the below content with North Carolina information.
5.1 – Overview
In the summaries and Q&A discussion below, we have tried to anticipate some of the practical questions that homeowners, tenants and business owners might ask concerning real and personal property issues.
Note regarding the scope of this section: we do not address the mechanics of making insurance claims or the legal issues related to insurance claims.
North Carolina General Statutes § 75-38 prohibits the sale or rental of certain goods or services at excessive pricing during a state of emergency or disaster. The prohibition applies specifically to goods or services which are consumed as a direct result of an emergency or that are used to preserve, protect, or sustain life, health, safety, or economic well-being of persons or their property. The prohibition applies only in the area where the state of emergency or disaster has been declared and expires forty-five (45) days after the declaration of a state of emergency, unless specifically extended by the Governor. A violation of the price gouging statute requires knowledge and intent to charge a price which is unreasonably excessive under the circumstances. Click here for more information on disaster-related price gouging and how to report it.
Federal Tax Relief
Taxpayers who live or own a business in a Beaufort, Bladen, Brunswick, Carteret, Columbus, Craven, Cumberland, Duplin, Harnett, Lenoir, Jones, New Hanover, Onslow, Pamlico, Pender, Robeson, Sampson, or Wayne County, now have until January 31, 2019 to file certain individual and business tax returns and make certain tax payments that were due on or after September 7, 2018 through January 31, 2019. Click here for more information.
State Tax Relief
Under NCGS 105-349.2(b), penalties for failure to pay tax when due may be waived for certain taxpayers affected by Hurricane Florence. Taxpayers who cannot meet filing or payment requirements as a result of Hurricane Florence must file Form NC-5500, Request to Waive Penalties, to the North Carolina Department of Revenue. Click here for more information on eligible taxpayers and documentation necessary to obtain a North Carolina Penalty Waiver.
5.2 – Assistance Numbers and Helpful Regulatory Agency Information
Greensboro Field Office – Jurisdiction for all of North Carolina
1500 Pinecroft Road, Suite 401
Greensboro, NC 27407-3838
Phone: (336) 547-4000
Email: Customer Service
Fax: (336) 547-4138
TTY: (336) 547-4054
NC Relay: 711 (Voice/TTY)
5.3 – Frequently Asked Questions
Q 5.1 – My house was damaged and I can’t live in it. Do I have to make my mortgage payments? What if I can’t pay my mortgage because of job or salary interruptions following the disaster?
Most home loan documents require the homeowner to make mortgage payments after a disaster—even if the house is damaged and the owner can’t live in it. However, many lenders will allow the owner to delay mortgage payments for several months after a disaster (although interest may continue to be added). Many lenders will make loan modifications to allow the missed payments to be added to the loan, thereby lengthening the term of the mortgage. The borrower needs to communicate with their lender and tell the lender about the specifics of his or her circumstances. The lenders will nearly always work with their customers. If the FHA guarantees the mortgage, there are special provisions after a disaster, such as those above. See the website here.
Q 5.2 – What if I can’t make the payments? Can my lender foreclose on me?
The short answer is yes. The typical residential property mortgage in North Carolina doesn’t include forbearance due to storm damage and allows the lender to foreclose following default. However, see the above discussion concerning forbearance and other payment options.
The NC Realtors Housing Foundation has grants available for mortgage relief up to $1500 that does not need to be repaid.
Q 5.3 – What should I do if I receive a notice that my lender is going to foreclose on my home for non-payment of the mortgage?
If your mortgage is insured by the Federal Housing Administration (FHA) or financed by the Rural Development Agency of the U.S. Department of Agriculture, you may be entitled to reduced or suspended payments (see LINK 1 and LINK 2).
Your lender must notify you and give you an opportunity to seek help before beginning foreclosure proceedings. However, you must meet the deadlines the lender will give you.
Q 5.4 – Who is responsible to replace my personal property that was located on someone else’s property (on leased property, rented out to a customer, etc.)?
Absent a lease provision to the contrary, which would be unusual, the landlord would not be liable to the tenant (or the tenant’s customers in a commercial context) for storm damage to the tenant’s (or customers’) personal property.
Put simply, this means the owner of the personal property bears the loss. Insurance contracts, however, will often produce a different result. For instance, the liability insurance carried by a car dealership might well cover storm damage to third party vehicles that were in the shop waiting for repair when the storm hit. In some situations, multiple insurance coverages might be available (in the example just given, the car dealership and the car owner may each have insurance that would apply). The resolution of the question of whose insurance would pay when neither party is at fault is beyond the scope of this outline.
The only scenario in which a landlord may be liable for damage to tenant’s personal property is a situation wherein the landlord failed to make needed repairs to the rented-premises prior to the natural disaster, and as a result your personal property inside the premises was damaged.
Q 5.5 – Who is responsible for the value of my personal property that was stolen (looted)?
Generally, theft would be covered under most insurance policies. For homeowners, the specific property that might be covered, and the exclusions, would all be set forth in the homeowner’s policy. For tenants (for instance a tenant that operates a shop that was looted), the landlord’s insurance is not likely to respond and, as noted above, the landlord is not going to be legally responsible absent either a lease provision or some widely recognized common law theory (landlord’s failure to provide adequate security) that places the loss on the landlord. It seems highly unlikely that the common law theories would fit the circumstances of this disaster.
Q 5.6 – Is there any program available for me to recover the value of my lost personal property?
FEMA may cover some of the value of lost personal property. You may be able to receive money from FEMA for “Other than Housing Needs” that are the result of a disaster to replace necessary items of personal property, such as clothing, household items (room furnishings, appliances), tools (specialized or protective clothing and equipment) required for your job, and necessary educational materials (computers, school books, supplies). Applications for assistance can be made at either 1-800-621-FEMA or at www.fema.gov. Absent insurance, FEMA rules are going to apply, and are beyond the scope of this outline.
Q 5.7 – Can my property be condemned?
Short answer, yes. Agencies with appropriate jurisdiction (local, state, and federal) will make the decision whether a given structure is habitable.
Q 5.8 – If the property is condemned, will I be paid for it?
This form of condemnation (determining that a structure is no longer habitable) is not a “taking” for public use. The government would not be liable to the property owner for its value. Insurance, FEMA disaster assistance, or similar relief will generally be the only sources of recovery.
Q 5.9 – How will I know if my property is safe to move back to?
Government agencies and FEMA will make this decision. How they will make it, and when, are issues beyond the scope of this outline.
Q 5.10 – My property has been damaged in a disaster (flood, tornado, explosion, hurricane). Do I still have to pay the same amount in taxes that I paid last year?
Yes. Damage to your property will not affect the amount of your property tax bill for the current year. Future tax bills may reflect the change in value of your property caused by damage from the disaster. If you are interested in requesting a reappraisal of your property based on the damage from the disaster, contact the local tax office in the county in which your property is located.