NC General Assembly / Legislation ation/legislation.html

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1 2016 Keys from the Castle: Daily Essentials for Real Estate Paralegals Sections 3, 4 & 5 Legislative Review, Condos & LiensNC NC General Assembly / Legislation ation/legislation.html 1

2 Manufactured Homes S.L , H870 Curative legislation for stale liens, adding: G.S (c): Lien must state maturity date G.S A: Automatic expiration in: 30 years unless extended OR 90 days after stated maturity date or extended maturity date if renewed OR 15 years days after issuance of lien on title OR 10 years after renewal G.S release on owner affidavit of service on lender & no response G.S (d) reissuance of title (Effective 8/1/2016). G.S. 44A 11.1(a1) exemption of leasehold manufactured home from lien agent provisions Effective July 1, 2017 Registers of Deeds: Deed of Trust Recording Fees S.L ; S19 $64.00 for first 35 pages, plus: $4 per additional page $10 additional instrument $25 non conforming instrument Effective October 1, 2016 GS (a)(1a) NOTE: This was created to provide a more reliable recording quote to facility TRID Loan Estimates and Closing Disclosures. Assumed Business Name Act SL ; S124; G.S et seq. An assumed business name certificate must be filed in the Register of Deeds of the county in which the person is or will be engaged in business, but only one county if they operate in multiple counties, including: (1) The assumed business name. (2) A real name of the person engaging in business under the assumed business name. If the business is a partnership other than a limited liability partnership or limited partnership, the assumed business name certificate must include a real name of five general partners or of each general partner, whichever is fewer. (3) The nature of the business. (4) The street address of the principal place of business. (5) Each county where the person uses or will be using the assumed business name to engage in business. The Secretary of State is to maintain a database for scanned images transmitted by the local Registers of Deeds. Failure to file incur costs and fees of person obtaining the information elsewhere. Existing assumed names must be renewed by July 1, Effective July 1, 2017, if funded through the Reserve Fund. 2

3 Squatters After Foreclosure SL , H283, N.C.G.S (a) Offense. A person commits the offense of first degree trespass if, without 10 authorization, he enters or remains: (1) On premises of another so enclosed or secured as to demonstrate clearly an intent to keep out intruders; or (2) In a building of another. (f) A violation of subsection (a) of this section is a Class I felony and shall include a fine of not less than one thousand dollars ($1,000) for each violation, if any of the following circumstances exist: (1) The offense occurs on real property where the person has reentered after having previously been removed pursuant to the execution of a valid order or writ for possession. (2) The offense occurs under color of title where the person has knowingly created or provided materially false evidence of an ownership or possessory interest. Effective December 1, 2016 Uniform Foreign Adult Guardianships S.L , H817 This would allow an abbreviated procedure for NC recognizing foreign guardianships. Guardian could register the foreign guardianship in the NC court via certified copies of the foreign court s order and letters of office. N.C.G.S. 35B 19 and 35B 20 The guardian may then exercise powers under NC law, though still requiring ancillary guardianship, compliance with N.C.G.S. 35A 1280, 35A 1301 et seq. for sale of real property and petition for removal of assets. LLC for charitable or religious entities S.L , S482 Addresses ability of a charitable or religious entity to convert to an LLC with several technical changes to operating agreements. G.S. 57D 2 30 & 57D 9 20 & 55A 11A 10 Effective October 1,

4 Conservation Easements Present Use Valuation: S.L , H533 G.S , Deferred tax lien extinguished on conveyance to federal conservation program or nonprofit or governmental entity under GS (12) or (29), beginning July 1, 2016 tax year NC SC Boundary Re Survey SL , Parts II, III & IV; S575 Affected property or Affected parcel Real property (or portion thereof) Previously treated as being subject to jurisdiction of South Carolina Recognized as being within boundaries of North Carolina As a result of boundary certification Boundary Certification The certification by the General Assembly of the boundary between North Carolina and South Carolina Executive order by Governor proclaiming the boundary The Re Surveyed Boundary 4

5 NC SC Boundary Re Survey SL , Parts II, III & IV; S575 Part II: Tax Liability No look back for prior years in new state Deferral rollbacks not triggered by Boundary Certification Part III: Title Maps & Notice of Affected Parcel recorded at Register of Deeds Title governed by SC law (if/to the extent previously treated as SC property but now in NC) All conveyances and instruments of title, of any sort, made prior to the certification of the boundary shall be recognized and given full faith and credit in this State according to the law, jurisdiction, and terms in effect at the time of the conveyance in the jurisdiction the property was previously treated as being subject to. For the purposes of this subsection, "instruments of title" means any instrument that affects title or constitutes the chain of title to real property, including, but not limited to, all deeds, wills, estate documents evidencing transfer of title, plats, surveys, easements, rights of way, outstanding mortgages and deeds of trust, judicial orders or decrees, and documents evidencing intestate succession. Liens filed in NC attach as a class Dual title certifications for pre Jan 1, 2017 periods NC SC Boundary Re Survey Sample Commitment Requirement For any portions of the Land lying in North Carolina on or near the South Carolina boundary identified pursuant to the confirmed boundary under S.L ), previously believed to be in South Carolina (the affected portion of the Land ) and title to which was previously recorded in South Carolina, and for which a Notice of Boundary Recertification should appear in the North Carolina County Registry wherein the Land is in fact located, opining attorney must provide: (1) a title opinion from a South Carolina licensed attorney who is an Approved Attorney with this carrier as to the status of title to the affected portion of the Land according to the South Carolina public records through the date of the opinion, based on generally accepted standards of practice for South Carolina title examination, certification (and generally accepted standards for tacking to a prior policy); any matters of record after the January 1, 2017 effective date should be noted. (2) a North Carolina licensed attorney s opinion as the status of title to the Land according to the North Carolina public records based on generally accepted standards of practice for North Carolina title examination, certification (and generally accepted standards for tacking to a prior policy); any matters of record regarding the affected portion of the Land before the January 1, 2017 effective date should be noted. Upon receipt of said opinions, this requirement will be removed or amended and exceptions may be added in accordance with the facts disclosed thereby.[note: It shall not be necessary nor is it recommended that South Carolina documents be re recorded in North Carolina, since the South Carolina public record constitutes the official title prior to the boundary confirmation date.] NC SC Boundary Re Survey Closing Issues Examples TRID disclosures Dual attorneys (or dual licensed attorneys) Dual search fees Dual recording fees Dual title insurance fees Potential delays due to duplicate work 5

6 NC SC Boundary Re Survey Title Issues Examples North Carolina South Carolina Title in spouses Tenancy by entireties, automatically Tenants in common with rights of survivorship (if stated) Marital rights Inchoate marital rights of non owning N/A spouse Security Interests Deeds of Trust Mortgage Intestacy Per capita & marital elections/spousal share Per stirpes & spousal share, per distribution deed Estate Administration Local clerk Distribution deeds Deed execution Acknowledgment 2 witnesses (one can be notary) Mechanics Liens Relation back & lien agent Mortgage priority Leases Statute of frauds and priority recording requirement more than 3 years Statute of frauds and priority recording requirement more than 1 year Foreclosure Power of sale Judicial action In rem jurisdiction special proceedings & judicial action North Carolina only! Uniform Enforcement of Foreign Judgments Act South Carolina only! NC SC Boundary Re Survey SL , Parts II, III & IV; S575 Part IV: Foreclosure Power of sale is allowed by mortgage Record certified copy of mortgage in NC prior to foreclosure Lender can purchase at foreclosure sale (even though mortgage) Can substitute trustee under GS 45 10(a) NC SC Boundary Re Survey SL , Parts II, III & IV; S575 Certification effective as of January 1, 2017 NOTE: Other provisions address gas tax, schools, driver s license, in state tuition, permits, motor vehicle title and taxes, environmental compliance, utilities, fire protection districts, county service districts, water and sewer districts. COMING TO A BOUNDARY NEAR YOU! VIRGINIA IS NEXT! THEN TENNESSEE! THEN GEORGIA! 6

7 Corridor Map Act S.L ; H959 Response to Kirby case, NC Supreme Court, 6/10/2016 On year moratorium prohibiting new transportation corridor official maps (7/1/16 7/1/17) Rescission of all maps filed under Article 2E of Chapter 136. Maps will be posted on DOT website, and City Clerk, Tax office, Registers of Deeds and city/county planning agencies Reduced the interest rate from legal rate (8%) to prime lending rate of Federal Reserve New Study: protecting corridors & property rights, due July 1, 2017 Effective date July 11, Vested Rights from Permits & IMUD S.L , H483 Amendments in zoning ordinances, subdivision ordinances, and unified development ordinances shall not be applicable or enforceable without the written consent of the owner with regard to a multi phased development as defined in G.S. 160A 385.1(b)(7) or G.S. 153A 344.1(b)(7). A multi phased development shall be vested for the entire development with the zoning ordinances, subdivision ordinances, and unified development ordinances then in place at the time a site plan approval is granted for the initial phase of the multi phased development. A right which has been vested as provided for in this subsection shall remain vested for a period of seven years from the time a site plan approval is granted for the initial phase of the multi phased development." "Multi phased development" means a development containing 100 acres or more that (i) is submitted for site plan approval for construction to occur in more than one phase and (ii) is subject to a master development plan with committed elements, including a requirement to offer land for public use as a condition of its master development plan approval." See Town of Midland v. Wayne, 229 N.C.App. 481, 748 S.E.2d 35 (2013), modified and affirmed in part, reversed in part and remanded, 368 N.C. 55, 773 S.E.2d 301 (2015) UCC Accord & Satisfaction S.L , S807 G.S Accord & Satisfaction by use of instrument. (a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply. (b) Unless subsection (c) of this section applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. (c) Subject to subsection (d) of this section, a claim is not discharged under subsection (b) of this section if either of the following applies: (1) The claimant, if an organization, proves that (i) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place and (ii) the instrument or accompanying communication was not received by that designated person, office, or place. (2) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This subdivision does not apply if the claimant is an organization that sent a statement complying with clause (i) of subdivision (1) of this subsection. (d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim." Effective October 1,

8 Practice of Law On line Forms S.L , H436 So called LegalZoom bill Effective June 30, 2016 They did provide a revisit provision regarding G.S , to the extent: The General Assembly shall review the implementation of [G.S ] and consider whether the provision should be modified or discontinued by June 30, Practice of Law Exception S.L , H436, New G.S (b) The phrase "practice law" does not encompass the following: (1) [mediators] (2) The selection or completion of a preprinted form by a real estate broker licensed under Chapter 93A of the General Statutes, when the broker is acting as an agent in a real estate transaction and in accordance with rules adopted by the North Carolina Real Estate Commission, or the selection or completion of a preprinted residential lease agreement by any person or Web site provider. Nothing in this subdivision or in G.S shall be construed to permit any person or Web site provider who is not licensed to practice law in accordance with this Chapter to prepare for any third person any contract or deed conveying any interest in real property, or to abstract or pass upon title to any real property, which is located in this State. (3) The completion of or assisting a consumer in the completion of various agreements, contracts, forms, and other documents related to the sale or lease of a motor vehicle as defined in G.S (10), or of products or services ancillary or related to the sale or lease of a motor vehicle, by a motor vehicle dealer licensed under Article 12 of Chapter 20 of the General Statutes." Exemption for On line Forms & Websites S.L , H436, New G.S (a) The practice of law, including the giving of legal advice, as defined by G.S does not include the operation of a Web site by a provider that offers consumers access to interactive software that generates a legal document based on the consumer's answers to questions presented by the software, provided that all of the following are satisfied: (1) The consumer is provided a means to see the blank template or the final, completed document before finalizing a purchase of that document. (2) An attorney licensed to practice law in the State of North Carolina has reviewed each blank template offered to North Carolina consumers, including each and every potential part thereof that may appear in the completed document. The name and address of each reviewing attorney must be kept on file by the provider and provided to the consumer upon written request. (3) The provider must communicate to the consumer that the forms or templates are not a substitute for the advice or services of an attorney. (4) The provider discloses its legal name and physical location and address to the consumer. (5) The provider does not disclaim any warranties or liability and does not limit the recovery of damages or other remedies by the consumer. (6) The provider does not require the consumer to agree to jurisdiction or venue in any state other than North Carolina for the resolution of disputes between the provider and the consumer. (7) The provider must have a consumer satisfaction process. All consumer concerns involving the unauthorized practice of law made to the provider shall be referred to the North Carolina State Bar. The consumer satisfaction process must be conspicuously displayed on the provider's Web site. (b) A Web site provider subject to this section shall register with the North Carolina State Bar prior to commencing operation in the State and shall renew its registration with the State Bar annually. The State Bar may not refuse registration. (c) Each Web site provider subject to this section shall pay an initial registration fee in an amount not to exceed one hundred dollars ($100.00) and an annual renewal fee in an amount not to exceed fifty dollars ($50.00)." 8

9 Vacation Rentals & Military Tenants S.L , H151, G.S. Ch. 42A Addresses refund of advanced payments, and payment of real estate broker fee, on termination of a vacation rental. Premises must comply with local building code unless exempt, including an operable CO2 alarm. Real Estate broker must make sure alarms and condition are satisfactory & notify owner. Military personnel, deployed or given permanent change of station orders can cancel rentals Tidbits NC will tax income for discharge of debt on principal residence for 2014, 2015 and 2016 SL , 4, GS (c2)(1) de coupling with the Internal Revenue Code Still watching. Personal Representative sales of Real Property TBE Trust curative (former S821) Purchase Money mortgage / spouse s marital interest (former S821) Clarify spouses for TBE (former S821) Reviving Performance Guarantees on subdivision roads (former S778 and H1003) in response to S.L Uniform Power of Attorney Act Uniform Powers of Appointment Act Uniform Receivership Act Uniform Limited Liability Company Act 9

10 Condominiums & Related Claims Issues Condominium Act (CA) GS Chapter 47C Development created on or after October 1, 1986 Automatically applies to condominiums Pre 1/1/86 developments for some management, common area maintenance, assessment powers Includes Official and NC Comments GS 47C Substantial Compliance GS 47C 1 104(c) No variations, unless allowed by Act GS 47C 1 104(a) and (b) Pre 1/1/86 Unit Ownership Act, GS Ch. 47A Could have been elected not automatic or mandatory Condominium Declaration Reference recorded plats & plans Architect / engineer certifications as built Surveyor certification Cross access easements Contemplated future improvements Reservation of development rights Association & assessment allocations Consent and subordination of lender 10

11 Plats & More Plats GS 47C Name, survey or general schematic map of the entire condominium Declaration book, page and date of recording Location and dimensions of all real estate: Parcels (& improvements) not subject to development rights Parcels (& improvements) subject only to the development right to withdraw Parcels (& improvements) subject to development rights (identifying rights applicable) Encroachments by or upon any portion of the condominium Easements Limited common elements Any estate for years or leasehold real estate Verified statement / certification of licensed architect or registered engineer registered that such plats or plans fully and accurately depict the layout, location, ceiling and floor elevations, unit numbers and dimensions of the units, as built Certificate by a registered land surveyor licensed that the plats or plans accurately depict the legal boundaries and the physical location of the units and other improvements relative to those boundaries (tie lines) Distance between noncontiguous parcels in the condominium Any unit in which the declarant has reserved the right to create additional units or common elements. Contemplated improvements, if shown, indicate MUST BE BUILT or NEED NOT BE BUILT No architect s certification No elevations Footprints were not as built Does not reserve private road easements No tie-lines to property corners or lines Does not reserve for future development Does not close: What are the common elements? Architect s certification 11

12 Elevations Go over the plats and plans with your client. Compare: GIS Google Earth US Postal Service Address Declaration Contract Plat Formation of Owners Association Nonprofit corporation Automatic membership of unit owners Bylaws, Declarations Declarant control GS 47C

13 Association Assessments (GS 47C & 117) Superior to all other liens except Real estate taxes Deeds of trust Encumbrances recorded prior to docketing of Association lien Enforcement: 3 years from filing claim of lien Non allocation of misconduct assessments Fines & penalties Common Elements: all portions of condominium other than units Parking areas, walkways, landscaped areas, pool, clubhouse, tennis courts Unit includes undivided interest in common areas (ratio set in Declaration) Cross Access Easement Access through earlier phases Access for later phases Mortgages & Mechanics Liens Amendments & Terminations GS 47C Declarant Association Declarant s Rights reserved Development Rights reserved Certain voting rights allocations leasehold unit terminations Reallocating boundaries between units Subdivision of Units GS 47C GS 47C GS 47C GS 47C-2-106(d) GS 47C-2-112(a) GS 47C Unit owners Reallocating limited common elements Reallocating boundaries between units Subdivision of units GS 47C-2-108(b) GS 47C-2-112(a) GS 47C-2-113(b) 67% (min) Amendments, generally GS 47C-2-117(a) 80% (min) Termination of Condominium Convey or Mortgage Common Elements 100% Unless specific provision in Act: Add l special declarant rights Increase number of units Change boundaries of any unit Change allocated interest of a unit Change restricted uses of a unit GS 47C-2-118(b) GS 47C GS 47C-2-117(d) 13

14 Searching Declarant, Development & Association Amendments to Declarations, Bylaws are indexed: Grantee's index in the name of the condominium Grantee s index in the name of the association Grantor's index in the name of the parties executing the amendment (often only the Association) G.S. 47C and G.S. 47F Association conveys and encumbers common areas GS 47C & 47F A judgment for money against a condominium association Is not a lien on the common elements, Is a lien in favor of the judgment lienholder against all of the units in the condominium at the time the judgment was entered. Only indexed in the name of the condominium and the association G.S. 47C *Transfer of Declarants rights under GS 47C *Consistent with changes to Planned Community Act * What is there? What is not? Need Not Be Built Skybridge Terrace NCCOA

15 Annexing Access Prior plats (not shown as common areas) Declarant? Rights Reserved? Supplement to Declarations: Reallocate assessments Recorded/indexed New plat GS 47C 2 109(d) New elevations, P&S Compliance ( As built ) certifications Revised ILSRA Property Report Revised Public Offering Statement One lot, one vote Rice v. Coholan Use of copyright plans for future construction. See Christopher Phelps & Assocs., LLC v. Galloway, 492 F.3d 532 Relocation of Boundaries (GS 47C 2 112) Agreement Reasonable Association approval New recorded plat Encroachments (N.C.G.S. 47C 2 114) Liability for willful misconduct or failure to adhere to the plats and plans 15

16 NEW 47E 4(b1) Disclosure (Beg. 12/1/11) Owner shall furnish to a purchaser disclosure statement in form developed by the NC Real Estate Commission, to include: Regulation by one or more owners' association(s) & contact info Governing documents which impose various mandatory covenants, conditions, and restrictions upon the property Obligations to pay, amount of & services from regular assessments, dues, fees &special assessments. Any unsatisfied judgments against or pending lawsuits involving the lot, the planned community or the association to which the lot is subject, EXC: collection actions of the association Conveyance or transfer fees Owner s option to indicate whether the owner has actual knowledge of the specified characteristics, or conditions or the owner is making no representations as to any characteristic or condition contained in the statement. Public Offering Statement G.S. 47C, Art. 4 Delivered before purchase contract executed 7 day absolute cancellation period Mandatory unless: All units are non residential Gift Court order Governmental agency Foreclosure or Deed in Lieu Grantee is in business of selling real estate & intends to offer units to others Contract subject to cancellation by buyer anytime for any reason without penalty ALSO: Property Report under federal Interstate Land Sales Full Disclosure Act Unit Outsale Coverages Lender Endorsements ALTA Endorsement Form 4 (Condominium) ALTA Endorsement Form 8.1 (Environmental Protection Liens) ALTA Endorsement Form 9 (Restrictions, Encroachments, Minerals) Release from the developer deed of trust Legal description N.C.G.S. 47C Condominium, Declaration recording, Unit number 16

17 Requirements Payment of any owners' association dues, charges, or assessments claimed or due and payable at time of recording of the instrument creating the interest to be insured, whether or not a claim of lien has been filed, if same are or may become a lien superior to the interest to be insured. For issuance of ALTA Endorsement Form 4 06 (Condominium) (Revised 10/16/08): Verification that condominium is duly formed and managed in compliance with applicable law; that owners' association dues have been paid current through and including Date of Policy; that the restrictions do not contain a forfeiture or reversion clause; and that any violations of restrictions, encroachments of existing improvements onto easements, rights of first refusal, or options to purchase have been subordinated or waived in favor of the interests of the proposed Insured(s). Standard Exception Terms, provisions, options, right of first refusal, covenants, conditions, restrictions, easements, charges, assessments, and liens provided for in instrument(s) appearing in the public records, including but not limited to those recorded in Book *, page *, and any related maps, plans, bylaws and other document(s) and amendment(s), but omitting any covenants or restrictions, if any, based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, or source of income, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law. ALTA Endorsement Condominium Forms 4 06 & Condominium duly formed & managed in compliance with applicable law No forfeiture or reversionary clause All violations of restrictions, encroachments of existing improvements, rights of first refusal, or options to purchase have been subordinated or waived in favor of the interests of the proposed Insured(s). Owners association dues current through closing Note: not owner s coverage 17

18 TYPES OF CLAIMS Address Unit Incorrect Tax Parcel Not validly formed Noncompliant Declarations Noncompliant plats Assessments Later phases / sections Not joined in declaration No right to access over earlier phases Unit Sales Problems Incorrect Unit Number Legal description vs. street address Tacking: Condominium Risk Cases Errors in development documents Failure to revise Declarations and plats carefully Significant noncompliance of Declarations or plats Wrong unit Wrong association Prior policy has errors Failure of prior attorney to appreciate title issues, such as association deeds of trust on common areas or payment of association dues Inadequate review of prior policy and its exceptions Endorsement requirements not met Problems not addressed prior to closing 18

19 LiensNC & Mechanics Liens: Searching & Forms Mechanics Lien Agent Law Effective April 1, 2013 Projects: First contracted after April 1, 2013 Cost $30,000 and over Residential or commercial property NOT renovation to property used by Owner as a residence (no matter price) Whether or not a building permit is needed NOT public projects (not lienable, bonded under Article 3) 19

20 3 Step Process Owner (or their Rep) MUST Appoint Lien Agent AND Post at Job Site At time of first contracting (even if they do not yet own the property) Owner & Property Is that so hard? Apparently Should be Bungalows at the Grove Should be FMB 20

21 APPOINTMENT With DESIGN PROFESSIONAL Contractor or Subcontractor MAY File Notice To Lien Agent Preserves their ability to enforce lien rights (if any) against Property vis à vis purchasers and lenders Does not affect their contract rights (if any) with higher tier contractors, subs or owner Critical Dates First Contracting Lien Agent must be appointed in LiensNC First Furnishing Contractor (date of relation back) Subcontractor (Potential Lien Claimant) Relation back 15 additional days to file Notice in LiensNC Last Furnishing 120 days claim; 180 days civil action 21

22 Search Period Smart Searching Tips (Advanced and Entry #) The Search Process Example Searches LiensNC has multiple potential search parameters to help you!! 22

23 Search Period FROM: FIRST CONTRACTING Before the survey Before the plat (for developer) Before the architectural drawings (for new condo) Before the purchase (for acquisition/construction loan) THROUGH: LAST 15 DAYS AFTER TO CLOSING (so search to date of closing & Form 5, 6 & 7 include latest providers) PLC s can file 15 days after first furnishing, which may be post closing if first furnishing is just before closing Remember: Work often starts before they own the property. See Pitt Dev. V. Dalton Moran Shook Search Tips No wild card Start simple and literal DO USE Distinctive words (Owner, street name) Connectors (ALL CAPS) AND, OR, NOT Quotation marks around multiple words that have to appear together precisely in a particular order DO NOT USE Common words (North or Smith) Abbreviated words or initials Avoid: St or Rd or Dr Avoid: D.R. or DR or D R Plurals: Builder vs. Builders Punctuation and spaces (they are ignored in search query) 23

24 Related Filings Report Print or Download PDF NO DOCUMENTS TO REVIEW! Advanced Search: QUERY 1 24

25 Advanced Search: QUERY 2 QUERY 3 Entry # Search Look at Related Filings Report 25

26 Related Filings Report Date and time stamp included. Analyze Results Owner Contractor Design Professionals Potential Lien Claimants Design Professionals (earlier filings) Closing Attorney, Settlement Agent, Lender Lien Agent Be sure to use the Closing Notice option to stay alerted of future filings on your Appointments! NCLTA FORMS FOR EVERY OCCASION 26

27 NCLTA Lien Forms Non MLA Forms FORM 1 Lien Waiver no new construction FORM 2 - Construction recently completed FORM 3 Construction in Process or Immediately Contemplated MLA forms FORM 5 Owner Affidavit FORM 6 -- MLA appointed and Construction Recently Completed (WAIVER) FORM 7 MLA appointed and Construction in Process or Immediately Contemplated (SUBORDINATION) Commitment Requirement 27

28 Commitment Requirement: Definitions Non MLA Projects Owner holder of any interest in the Land, including leasehold owner or contract purchaser Potential Lien Claimant (or PLC MLA ) Commitment Requirement: Definitions Contractor Any person or entity who has performed or furnished or has contracted to perform or furnish Labor, Services or Materials pursuant to a contract, either expressed or implied, with the Owner of real property for the making of an Improvement thereon. OR who has delivered a claim of lien upon funds to the Owner. Commitment Requirement: No Recent OR Contemplated Construction By this Owner NCLTA FORM 1 (Owner Affidavit) from every seller (on sale) or borrower (on refinance) Have not contracted for recent or contemplated improvements on the Land or for a construction loan 28

29 Commitment Requirement Construction Contemplated or In Process #1 NOTE: BE AWARE!!! If buyerif has BUYER contracted has contracted for or for is or is contemplating improvements, BUYER see must NO comply RECENT with IMPROVEMENTS CONSTRUCTION CONTEMPLATED above regarding OR IN seller PROCESS lien affidavits requirements, as well. appointment, posting. Commitment Requirement Construction Contemplated or In Process Non MLA project: NCLTA FORM 3 (Owner/Contractor Affidavit, Indemnity and Lien Subordination) (for lender coverage only) from every Owner and every Potential Lien Claimant MLA project: Receipt of proof satisfactory to the Company that prior to closing or prior to first contracting for construction (whichever occurs first) A Lien Agent was designated on the LiensNC.com website, & The Appointment of Lien Agent was posted at the Land; NCLTA FORM 5 (Owner Affidavit) from every Owner; AND NCLTA FORM 6 (MLA Lien Waiver) or NCLTA FORM 7 (MLA Subordination of Liens) from every PLC NCLTA Lien Forms: Construction Contemplated or In Process Non MLA: FORM 3 MLA: FORM 5 (Owner) AND FORM 7 (each Potential Lien Claimants ) 29

30 Commitment Requirement Construction Contemplated or In Process #2 #2 NOTE: In all cases in which an MLA was required but not (timely) appointed, prior approval and terms of coverage (if any) by Company underwriting counsel is required. Commitment Requirement Recently Completed Improvements Non MLA project: NCLTA FORM 2 (Owner/Contractor Affidavit, Lien Waiver, and Indemnity) from every Owner & PLC MLA project: Receipt of proof satisfactory to the Company that prior to closing or prior to first contracting for construction (whichever occurs first) A Lien Agent was designated on the LiensNC.com website & The Appointment of Lien Agent was posted at the Land NCLTA FORM 5 (Owner Affidavit) from every Owner; AND NCLTA FORM 6 (MLA Lien Waiver) from every PLC MLA NCLTA Lien Forms: Recently Completed Construction Non MLA: FORM 2 MLA: FORM 5 (Owner) AND FORM 6 (each Potential Lien Claimant ) 30

31 RECAP: Mechanics Liens: Forms From Whom? If No Lien Agent Construction Loan FORM 3 (or 2 if finished) Owner ALL PLC s within 120 days Completed Construction FORM 2 Owner ALL PLC s within 120 days If Lien Agent Appointed FORM 5 Owner Construction Loan FORM 7 (or 6 if finished) Notice filers First furnishers in last 15 days General Contractor (if one) Completed Construction FORM 6 Notice filers First furnishers in last 15 days General Contractor (if one) 31