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1 LEGISLATION AFFECTING REAL ESTATE TITLES Chicago Title 1 NC General Assembly / Legislation 2

2 Landlord/Tenant in Foreclosure on Single-Family Residence S.L , HB174 Notice of foreclosure to Tenant Tenant can remain in possession for shorter of lease term or 1 year, unless buyer will occupy as their primary residence, but only if: Tenant not related to defaulted borrower Lease in writing, not terminable at will for FMV rental 3 Landlord/Tenant in Foreclosure on Single Family Residence S.L , HB day notice to Tenant to vacate, if buyer will occupy home OR if Tenant s lease was not written or was terminable at will Tenant can terminate lease if default not cured N/A to option under GS 47G-1(4) N/A if imminently dangerous condition GS 42-42(a)(8) 4

3 Residential Options & Contracts S.L , HB174 Money damages and summary ejectment (by magistrate) allowed on default on residential lease/option GS Ch. 47G Residential contract for deed under GS 47H Subject to GS 47E disclosure Deleted requirement to list deed of trust & liens Not deceptive trade practice 5 Foreclosure Rescue Scam GS & GS S.L , HB174 Mortgage default no longer required Applies to Lease/Option or Contract for Deed not complying with GS 47G or GS 47H Requires appraisal no more than 120 days before transfer be provided to transferor (homeowner) at least 7 days prior to transfer 6

4 Public Trust Lands S.L , H346 Counties can adopt ordinances and restrictions to maintain public beaches and keep open for public use. Wildlife Resources: comment on permit applications prosecute civil and criminal actions for violations to assure access to public trust lands Presumably a response to Town of Nags Head v. Cherry (COA ) 7 Registers of Deeds: Multiple Party Indexing Fee SL ; SB332 $2.00 per name additional indexing fee, over first 20 distinct parties GS (a) NOTE: This will typically affect large lender POA s, Association Amendments, for example. 8

5 Register of Deeds UCC Filing fee clarification SL ; SB386 Financing Statement Fees: $38 for first 2 pages $45 for first 10 pages, $2/pg. thereafter Information request -- $38 N/A to satisfaction of fixture filing or financing statement only in mortgage or deed of trust. (NOTE: Sec of State still has $30 discounted e- filing fee.) GS (a)(13) 9 False filing Register of Deeds SL ; SB83 If Register of Deeds suspects false filing against property of public officer, public employee or their immediate family ROD can refuse to file, ROD can instead file a Notice of Denied Lien or Encumbrance Filing, effective when filed Filer can initiate Special Proceeding within 10 days to Superior Court; otherwise null & void Hearing on 5 days notice to interested parties Judge s order relates back to original filing GS (b) 10

6 False Filings - Clerk SL ; SB83 If Clerk suspects false filing against property of public officer, public employee or their immediate family Clerk can refuse to file, Clerk can instead decide to file only if a judge of the judicial district with subject matter jurisdiction issues order to file Only effective upon docketing by Clerk. GS (c) 11 False filing Court Order Clerk or Register of Deeds SL ; SB83 Upon court order that filing was false, they will enter on the record the following: "THE CLAIM ASSERTED IN THIS DOCUMENT IS FALSE AND IS NOT PROVIDED FOR BY THE GENERAL LAWS OF THIS STATE." 12

7 Fraudulent Marriage Records SL ; SB311 Document purporting to impact official record of marriage under GS 51-15, Not a marriage license, return or amendment or correction of marriage license Notation: THIS DOCUMENT IS NOT AN OFFICIAL MARRIAGE DOCUMENT 13 Builders Inventory Exemption SL , HB 168, SB 321 Residential Real Property Held for sale by builder Intended to be sold as buyer s residence Increase in value from subdivision of, improvements other than buildings, or construction of new SF residence or duplex excluded from property taxation by the builder. Up to 3 years from builder first listing Builder must apply annually. 14

8 Builders Inventory Exemption SL , HB 168, SB 321 Commercial Real Property Intended to be sold upon improvement Increase in value from subdivision or improvement by builder Excluded from tax value by builder Up to 5 years from first listing Terminates at building permit OR sale Must reapply annually 15 Protect Private Property S.L ; HB405 Liability if intentionally gain access to nonpublic areas and engage in act exceeding their authority, including recording audio/video and any act that substantially interferes with the ownership or possession of real property. Equitable relief Compensatory damages; Costs & Fees (incl. attorney fees); $5,000/day exemplary damages Joint & several liability GS Ch. 99A, Effec. 1/1/

9 Condominiums SL ; HB513 Transfer of Declarants rights under GS 47C Consistent with earlier changes to Planned Community Act (Chapter 47F) 17 Mortgage Satisfaction SL ; HB513 Clarifies that satisfaction of deed of trust lien on real property does not automatically mean satisfaction of underlying obligation(s) Unless the satisfaction expressly states that the underlying obligation secured by the security instrument has been extinguished and the underlying note or other instrument evidencing the obligation has been cancelled, the recording of a satisfaction of a security instrument does not by itself extinguish any liability of a person for payment or performance of the secured obligation." 18

10 Zoning no Protest Petitions SL ; HB201 Protest Petition provisions of GS 160A-385 were replaced with Citizen Comments 19 Subdivision Ordinances SL ; HB 721 Augments former statute by defining acceptable performance guarantees Specifies: surety bonds, letter of credit or other equivalent security of 125% of reasonably estimated cost of completion of required improvement as a precondition for plat approval GS 160A-372 & GS 153A-331 City or County cannot withhold permit on other property 20

11 Closing Streets & Alleys SL ; HB836 City may reserve improvements or easements in streets closed including utility, drainage, pedestrian, landscaping, conservation or other easement in the Order of Closing. GS 160A-299, Effec. 6/22/15 (Rest of bill involves election reform, limiting city alcoholic beverage referenda & Voter ID laws.) 21 Uniform Fraudulent Transfer / Voidable Transactions Act SL ; SB123 Adopting changes from the Uniform Law Commission and changing the name (above) Mostly tweaks Now called Uniform Voidable Transactions Act 22

12 Mecklenburg County 2011 Tax Revaluation curative SL , SB159 SL had allowed retroactive revaluations. This 2015 curative: 1. Allows taxpayers to pay shortages over 36 months 2. For properties sold between 2011 and the post revaluation: Refunds overages paid Waives liens on property for years in prior taxpayer s name (i.e. current owner is a person other than current owner as of January 1 of that year) 23 Estate Planning, Uniform Trust Code & Guardianships S.L ; SB336 Living Probate -- Will established before death, GS 28A Art. 2B While Testator is alive! Declaration by court is bar to caveat Uniform Powers of Appointment - GS Ch. 31D Blanket-exercise clause Gift-in-default clause Non-transferable Presumed unlimited authority Capture doctrine on ineffective appointment Disposition if unappointed 24

13 Tenancy by Entireties Trust S.L ; SB336 Tenancy-by-entireties property conveyed to joint trust or equal trusts of the spouses: Held & disposed of per trust Immune from creditors of only one spouse if: H&W remain married & current beneficiaries Real property continues in TBE trust(s) Non-creditor spouse is survivor GS , Rev. effec. 8/11/15 25 Mortgage Origination Support Registration S.L ; HB 126 Requires a registrant to register with the Commissioner of Banks A registrant is a person engaged exclusively in the processing or underwriting of residential mortgage loans and not engaged in the mortgage business 26

14 Building Code Regulation Reform S.L ; HB 255 Amended 153A-357 to raise the threshold for requirement of a building permit from $5,000 to $15,000 for single family residence and farm structure repairs and certain renovations 27 Regulatory Reform Act of 2015 Amendments to Real Estate License Requirements S.L ; HB 765 Clarifies that managers, officers, partners and employees of businesses that are exempt from licensing law regarding selling or leasing certain property are also exempt Allows owners of closely held entities to sell or lease entity owned property without a license in certain circumstances Adds disclosure requirements when acting under the 93A-2(c)(1) exemptions 28

15 Tidbits NC will tax income for discharge of debt on principal residence SL , 1.3, GS (d) Cities cannot regulate building design elements for 1-to-2 family dwellings exterior materials, color, roof, porch, nonstructural architectural ornamentation window, doors, room layout. SL , SB25 Lenders who e-file liens on DMV titles & conduct at least 5 transactions annually must e-file releases within 7 days, starting 7/1/16. SL , SB Still watching. H436: Unauthorized Practice So-called LegalZoom bill H870 Manufactured Home Title & Lien cancellation bill Study Committee in 2016???? S575 NC/SC Boundary H375 & S643 corrective affidavit Responsibility for Paved & Unpaved Roads Study Committee SL , 29.17E & Pilot Program SL , S119,