NC Residential Building Code Expands to Cover 1–4 Unit Dwellings

As of July 1, 2025, North Carolina will have a significant change to its residential building code—expanding the scope of the North Carolina Residential Code to include one- to four-unit dwellings (traditionally referred to as single-family homes, duplexes, triplexes, and quadplexes).

Previously, the North Carolina Residential Code primarily focused on one- and two-family dwellings and 3/4-unit dwellings were covered by the North Carolina Commercial Building Code. This shift stems from House Bill 488, which reorganizes how residential codes are created, reviewed, and enforced statewide. Below is an overview of these changes and the implications for real estate agents and general contractors. These changes were slated to take effect on 1/1/25, but North Carolina General Assembly Session Law 2024-57 (S382) has since delayed implementation until 7/1/25.

Why the Code Change?

A. Reorganization of Code Councils

House Bill 488 creates a new Residential Code Council, separate from the longstanding Building Code Council. The Residential Code Council will focus exclusively on the North Carolina Residential Building Code and matters specifically related to residential construction. This means:

• One- to four-unit dwellings will now be fully governed by a dedicated body with expertise in residential structures.

• Appeals or interpretations affecting residential construction will be directed to this new council.

B. Expansion to 1–4 Units

The most noteworthy update is that the North Carolina Residential Code will formally apply to triplexes and quadplexes in addition to single-family homes and duplexes. This was codified when legislators directed the Residential Code Council to:

• Modify existing rules to accommodate design and construction for three- and four-family units.

• Establish fire- and structural-separation standards that are less burdensome than those for larger commercial or multifamily buildings.

Key Takeaways for Real Estate Agents

Marketing and Property Classifications

Real estate agents who work with investor-clients or sellers of small multifamily properties will find that these dwellings now sit under a unified residential code. This consolidation may:

• Simplify how these properties are marketed, since triplexes and quadplexes will share many of the same code requirements as single-family and duplex homes.

• Provide consistency in listings, disclosures, and due diligence because the code references for up to four units are no longer scattered among multiple volumes or commercial provisions.

Valuation and Financing Considerations

• Appraisals: Under a uniform code, appraisers may find it easier to evaluate three- and four-family dwellings in line with smaller residential properties—potentially smoothing the appraisal process.

• Lending: Lenders may offer more financing options for small multifamily properties when they see that regulatory oversight has been standardized. Mortgage products that previously applied only to “1–2 unit dwellings” may be more readily adapted to “1–4 unit” dwellings as code requirements become more straightforward.

Client Education

Agents should be prepared to educate clients on the new code requirements and how this affects the resale value, insurance, or any additional steps needed for inspections—particularly for triplexes and quadplexes. Understanding the new rules builds trust with buyers and sellers alike.

Key Takeaways for General Contractors

Streamlined Construction Standards

Historically, contractors building triplexes and quadplexes may have had to wade through commercial code sections (or more stringent multifamily requirements) for certain design elements. Now:

• One Code Source: Construction requirements for 1–4 unit dwellings will be consolidated in the Residential Code, reducing confusion and potential conflicts between codes.

• Fire Resistance and Sprinklers: Under HB 488, the Residential Code Council cannot require more than a two-hour fire resistance rating for wall, floor, and ceiling separation assemblies in triplexes and quadplexes, nor can it mandate an automatic fire sprinkler system in these residential properties.

Permitting and Inspection Changes

• Permit Threshold: HB 488 raises the cost threshold for required building permits from $20,000 to $40,000 for certain types of work, which may impact smaller renovation or addition projects.

• Less Red Tape: Local governments are prohibited from requiring routine exterior sheathing inspections for residential dwellings, streamlining the inspection schedule for projects.

Planning and Collaboration

For general contractors, early collaboration with local code enforcement and design professionals is still critical. However, a more residential-friendly code for 1–4 unit dwellings should create cost and time efficiencies across many phases of construction and remodeling.

Potential Market Impacts

Promoting “Missing Middle” Housing

The update stands to boost the availability of small multifamily housing, often referred to as “missing middle” housing—properties that add density without the size or complexity of large apartment complexes. This may help:

• Increase housing supply in walkable neighborhoods, near transit, or within historically single-family zones.

• Encourage investment in older duplexes, triplexes, or quadplexes for rehab and resale under a simpler code framework.

Property Value Stability

With a clearer path to maintaining or renovating these dwellings, owners and buyers may see improved property values and simpler code compliance. This also makes it easier for local jurisdictions to uphold housing standards.

Community and Affordability

By reducing some of the complexities of building or remodeling triplexes and quadplexes, these code changes could help address affordability challenges in areas looking for multi-unit housing solutions that maintain neighborhood character.

Action Steps for Real Estate Professionals

1. Stay Informed: Review the final text of House Bill 488 and be aware of the new responsibilities of the Residential Code Council.

2. Network with Builders and Inspectors: Maintain strong relationships with contractors and local building inspectors to offer your clients the most up-to-date information on code compliance.

3. Educate Clients: Whether representing buyers or sellers, help them understand the new code’s implications for home improvements, property values, and potential expansions or remodels.

4. Consult Local Authorities: Every jurisdiction enforces the state code a bit differently. Understand local interpretations and guidelines for the 1–4 unit expansions.

Conclusion

The expansion of the North Carolina Residential Code to cover up to four-unit dwellings marks a pivotal move toward simplifying and modernizing residential construction standards. For real estate agents, this change can streamline marketing, financing, and disclosure processes for small multifamily homes, while giving buyers more clarity in their investments. For general contractors, it can reduce regulatory confusion, encourage cost-effective building practices, and open doors to new business opportunities in the “missing middle” housing market.

How do you think these changes to the building code will impact future development in our state? Leave a comment below or share with a colleague in an upcoming CE Class!