A few noteworthy legislative actions and some judicial guidance took place in North Carolina over the last several months that are important.
- Document Recording. Attached is a comprehensive chart for the recording of documents including fees, excise taxes (also called ‘revenue stamps’) and transfer taxes for those counties that impose a transfer tax.
- Marital Interest Clarification. In general, a spouse who is not in title still has an interest in the real property owned by his/her spouse and must sign any deed of trust encumbering the same. The “missing spousal interest” is an issue that we identify fairly frequently in our title examination. There has historically been an exception to this rule: for a true individual seller-financed purchase money transaction, the spouse need not consent to the lien of the creditor who by definition is funding the purchase. This exception has been extended to institutional lenders. GS 39-13 is effective for loans closing on or after June 25, 2018. Be careful- this only applies when the loan funds are used to purchase the property, not for refinances, second mortgages or HELOC loans.
- Overcharging for document copies. Effective October 1, 2018, the legislature has deemed it an unfair trade practice to charge more than four times the register of deeds fee for copies of documents. Claiming or implying that a government agency or entity requires the fee or the copies is also prohibited. Most Registrars charge $2.00 for the first page and $0.25 for each page thereafter.
- Identifying the debt. A deed of trust typically secures a note “of even date”. A problem arises when a deed of trust is either not dated or the date has been changed because of a rescheduled closing. A recent case explores this issue and finds in favor of using all of the information in the instrument to determine the intent of the parties. This means a court can consider the date the document was recorded or notarized, as well as other information in the “four corners” of the deed of trust in order to find that it properly secures a particular promissory note. The North Carolina Court of Appeals decision in In Re SDS Investments, LLC is unpublished but provides helpful guidance when this issue arises.
- Correcting description errors. Session Law 2017-110 creates a new process for actually correcting an error in a legal description by providing notice to all interested parties. The result is a correction that relates back to the original recording date of the instrument, meaning no more issues regarding intervening lien holders who may have gained priority due to the defect in the deed of trust.
- Seven-Year curative. The same Session Law adds to the curative statutes a seven-year “automatic” cure for certain defects. Look for a more in-depth article on this statute coming soon from Hutchens Law Firm.
For additional information or questions regarding these, contact Lanée Borsman.
Published by Lanée Borsman on November 6, 2018.