The North Carolina Supreme Court announced its decision on August 19, 2016 in the Eastern Carolina Regional Housing Authority v. Lofton case. This case was appealed by the Housing Authority from the earlier (2014) Court of Appeals decision entered in favor of the public housing tenant, Ms. Sherbreda Lofton. View the case in this link. Eastern Carolina Regional Housing Authority v. Lofton decision NC Supreme Court 8.19.16 32PA15-1.
The highlight of this decision is that the Court of Appeals went too far in requiring or permitting an unconscionability standard or equitable defense in summary ejectment proceedings.
The Supreme Court said that “unconscionability is not a consideration in summary ejectment proceedings. To prevail in a summary ejectment proceeding under North Carolina law, a landlord must establish by a preponderance of the evidence that a tenant breached the lease.”
And, because this case involves more than a private landlord-tenant relationship, the Supreme Court said that “when the government is the landlord, certain duties arise under applicable law.” In this case, the Supreme Court affirmed the outcome of the Court of Appeals and the trial court decisions ruling against the Housing Authority, “namely that summary ejectment was inappropriate in this case” but “we do so for a different reason. We hold that plaintiff [the Housing Authority] failed to exercise its discretion as required by federal law before pursuing defendant’s eviction.”
Here are some practice tips that follow from our reading of these decisions: (1) Train your housing management team to provide updates on these new developments in the law; (2) Gather the facts and carefully document the case if the Housing Authority determines that an eviction is appropriate in the circumstances; (3) Provide the tenant with an opportunity to explain any mitigating circumstances that might cause the Housing Authority to determine not to evict; (4) Consult with the Housing Authority’s lawyer, and get a thorough legal review of the case; and (5) Exercise discretion in all such cases, and use common sense judgment about the right thing to do under the unique circumstances of each case.
Note further that North Carolina law expressly provides for immediate and expedited evictions where the court finds: (1) Criminal activity has occurred on or within the individual rental unit leased to the tenant; or (2) The individual rental unit leased to the tenant was used in any way in furtherance of or to promote criminal activity; or (3) The tenant, any member of the tenant’s household, or any guest has engaged in criminal activity on or in the immediate vicinity of any portion of the entire premises; or (4) The tenant has given permission to or invited a person to return or reenter any portion of the entire premises, knowing that the person has been removed and barred from the entire premises pursuant to this Article or the reasonable rules and regulations of a publicly assisted landlord; or (5) The tenant has failed to notify law enforcement or the landlord immediately upon learning that a person who has been removed and barred from the tenant’s individual rental unit pursuant to this Article has returned to or reentered the tenant’s individual rental unit.
In these cases (under North Carolina General Statutes sections 42-63 through 42-76), the tenant may present evidence in affirmative defense of the ejectment, and to seek to avoid eviction, that the tenant was not involved in the criminal activity and that: (1) The tenant did not know or have reason to know that criminal activity was occurring or would likely occur on or within the individual rental unit, that the individual rental unit was used in any way in furtherance of or to promote criminal activity, or that any member of the tenant’s household or any guest has engaged in criminal activity on or in the immediate vicinity of any portion of the entire premises; or (2) The tenant had done everything that could reasonably be expected under the circumstances to prevent the commission of the criminal activity, such as requesting the landlord to remove the offending household member’s name from the lease, reporting prior criminal activity to appropriate law enforcement authorities, seeking assistance from social service or counseling agencies, denying permission, if feasible, for the offending household member to reside in the unit, or seeking assistance from church or religious organizations.
Ellinger Carr is a business law and commercial real estate law firm based in Raleigh, North Carolina. Ellinger Carr lawyers are experienced and knowledgeable counselors, transaction leaders and business problem solvers, admitted to practice in North Carolina, South Carolina, Florida, Louisiana and New York. For assistance in affordable housing, HUD financing, commercial real estate and corporate and business development matters, call 919-785-9998 or email Susan Ellinger at sellinger@ellingercarr.com, Steven Carr at scarr@ellingercarr.com, Heather McDowell at hmcdowell@ellingercarr.com and Sarah Goodin at sgoodin@ellingercarr.com. 
The North Carolina Supreme Court announced its decision on August 19, 2016 in the Eastern Carolina Regional Housing Authority v. Lofton case. This case was appealed by the Housing Authority from the earlier (2014) Court of Appeals decision entered in favor of the public housing tenant, Ms. Sherbreda Lofton. View the case in this link. 
Ellinger Carr is a business law and commercial real estate law firm based in Raleigh, North Carolina. Ellinger Carr lawyers are experienced and knowledgeable counselors, transaction leaders and business problem solvers, admitted to practice in North Carolina, South Carolina, Florida, Louisiana and New York. For assistance in affordable housing, HUD financing, commercial real estate and corporate and business development matters, call 919-785-9998 or email Susan Ellinger at 