§ 42A-16. Advance payments uses. - North Carolina Statutes

§42A‑16.  Advance payments uses.

(a)        A landlord or realestate broker shall not disburse prior to the occupancy of the property by thetenant an amount greater than fifty percent (50%) of the total rent except aspermitted pursuant to this subsection. A landlord or real estate broker maydisburse prior to the occupancy of the property by the tenant any fees owed tothird parties to pay for goods, services, or benefits procured by the landlordor real estate broker for the benefit of the tenant, including administrativefees permitted by G.S. 42A‑17(c), if the disbursement is expresslyauthorized in the vacation rental agreement. The funds remaining after anydisbursement permitted under this subsection shall remain in the trust accountand may not be disbursed until the occurrence of one of the following:

(1)        The commencement ofthe tenancy, at which time the remaining funds may be disbursed in accordancewith the terms of the agreement.

(2)        The tenant commits amaterial breach, at which time the landlord may retain an amount sufficient todefray the actual damages suffered by the landlord as a result of the breach.

(3)        The landlord or realestate broker refunds the money to the tenant.

(4)        The funds in thetrust account are transferred in accordance with G.S. 42A‑19(b) upon thetermination of the landlord's interest in the property.

(b)        Funds collected forsales or occupancy taxes and tenant security deposits shall not be disbursedfrom the trust account prior to termination of the tenancy or material breach ofthe agreement by the tenant, except as a refund to the tenant.

(c)        The tenant'sexecution of a vacation rental agreement in which he or she agrees to theadvance disbursement of payments shall not constitute a waiver or loss of anyof the tenant's rights to reimbursement of such payments if the tenant islawfully entitled to reimbursement. (1999‑420, s. 1.)