Carolina Update

The most recent issue of the Carolina Update newsletter issued by the North Carolina Land Title Association.

Spring 2013

Table of Contents

 President’s Message

 ALTA Endorsements Effective 4/2/13

Ten Cyber Security Tips for Title Companies

NCLTA Annual Convention September 5-7, Hot Springs, VA

 

 President’s Message

As we settle into the spring selling season, I hope this message finds our members well and benefitting from the improving real estate market.  After experiencing a particularly challenging business climate for several years, it appears the worst is finally behind us and some confidence has returned to both consumers and the financial institutions.  The North Carolina Land Title Association (NCLTA) has had a particularly busy year working on implementation of major goals established by the executive committee and member underwriters.   I am happy to report that NCLTA has accomplished additional key objectives during the first quarter of 2013 which will significantly benefit our members and also change the way we underwrite transactions for years to come.  

As we are all aware, NCLTA accomplished a major legislative objective with the enactment of Session Law 2012-158 in which the North Carolina legislature passed the new mechanics lien agent statute to protect innocent purchasers and lenders from the “hidden” lien problem in North Carolina.   Under the new law which took effect on April 1, 2013, an owner of property is required to designate a title company or title insurance agent as a mechanics lien agent for all contracts for improvements to land where an owner occupied renovation is not taking place when the cost is at least $30,000.    Since the enactment of the law in June 2012, NCLTA and member underwriter representatives worked diligently on several initiatives to address critical issues before the April 1, 2013 implementation date.

The nine title underwriters in our state who provide most of the title insurance coverage in North Carolina formed a Joint Venture named LiensNC, LLC (LiensNC) to help provide disclosure to property owners, contractors and interested parties through the investigation of the development of an on-line lien agent system to bring a centralized web-based repository for lien agent appointments and notice filings to North Carolina.  The purpose behind LiensNC is to protect mechanics lien rights in North Carolina and to provide transparency in information related to these filings for all necessary parties.   After the creation of LiensNC, the Joint Venture entered into a contract with NIC Services, LLC (NIC) to develop, build, and implement the online system.   Following many months of meetings between LiensNC and the website development team at NIC, the new lien notice system went online April 1, 2013.  The web address for LiensNC is www.liensnc.com and the website provides a “real time” user-friendly and intuitive process for buyers, lenders, closing attorneys, owners, contractors and subcontractors to identify what parties have lien rights for new projects for the improvement of land after March 31, 2013.   The new online system will allow Owners to appoint a lien agent, who will keep track of those contractors and subcontractors who file lien notices that they have provided supplies or services for a job and want to preserve their lien rights with respect to the same.

The speed of the creation and implementation of the new website was almost unbelievable and required unparalleled communication and cooperation between the underwriter members of LiensNC with the development team of NIC.   Please join me in thanking everyone who participated in the process.   In particular, a number of our colleagues including but not limited to Steve Brown, Ken Stone, Jay Williams, Bryan Rosenberg, and Nick Long spent a considerable amount of their time and resources to help make the website become a reality.  Finally, I would like to acknowledge Nancy Ferguson at Chicago Title for the countless hours and leadership she provided in working with the development team at NIC to meet the April 1, 2013 launch date.  Without the hard work and commitment of our fellow members, creation of the website and meeting the April 1, 2013 launch date would not have been possible.  

Another major initiative of Land Title during the last few months was to protect Session Law 2012-158 from prejudicial substantive changes during the technical corrections period in the North Carolina legislature.  Members of the NCLTA legislative committee teamed up with underwriter representatives and David Ferrell, NCLTA lobbyist to provide comments to the mechanics lien law enacted last June.   From January through late March, David worked diligently with other interested parties including those with the construction law section to have our requests and concerns voiced to our representatives in both the North Carolina House and Senate.  David’s efforts were pivotal in the enactment of the mechanics lien agent technical corrections statute; Session Law 2013-16, which provides among other changes, authority for the LiensNC website to be a central online repository for lien agent appointments and the filing of lien notices.

Simultaneously while our executive committee and members worked on the new LiensNC website and the required changes desired in the technical corrections bill, NCLTA worked at a rapid pace under tight deadlines to review and make changes to the lien waiver forms as a result of the new mechanics lien agent law.  The NCLTA Forms Committee elected after careful consideration to bi-furcate the lien waiver forms depending on whether a Mechanics Lien Agent (MLA) is required to be designated under the statute.   In short, if the transaction does not require the designation of an MLA on or after April 1, 2013, then the traditional NCLTA Forms 1, 2 and 3 should be used.   These Forms have been updated to note that they are to be utilized for transactions where an MLA is not required.    Where an MLA is required on or after April 1, 2013, the Forms Committee drafted new NCLTA Forms 5, 6 and 7.   Form 5 is an Owner Certification which should be used in every transaction where an MLA is required.  Form 5 should always be used with either a Form 6 when a waiver and release is required or a Form 7 when subordinating to the interest of a lender.   All NCLTA Forms have been placed on the NCLTA Website for review and use.  New Commitment requirements providing guidelines on when to use each form have also been adopted by NCLTA and can already be seen on commitments issued by our member underwriters and agents.  Thank you to everyone who assisted with drafting and editing the forms to meet the April 1, 2013 deadline.  In particular, I would like to note the dedicated work of NCLTA Legislative Chair Nick Long in addition to Jay Williams; Ryan Wainio; Taby Cruden; Lisa Shields; and Karl Knight for their individual efforts in drafting the new forms and commitment requirements.

It has been a busy year at Land Title addressing so many objectives simultaneously.  While we have faced significant obstacles as an industry, I believe we have seized the new opportunities presented which allowed us to once again work together as an Association to defend our core beliefs and advocate our common interests.   It is my hope that the accomplishments of the NCLTA during the last year have further highlighted the valuable benefits of joining our ranks and becoming a member of our Association.  I invite you to visit our website at www.nclta.org to see the exciting changes we are making, to  utilize the resources we offer, and to get involved.  

Warmest regards,

Matt Powers

ALTA Endorsements Effective 4/2/13

The following forms, which were approved by the ALTA Board of Governors in February, have been published in final and bear an effective date of April 2, 2013:

  • ALTA Endorsement 9.6-06 Private Rights – Loan Policy

  • ALTA Endorsement 9.9-06 Private Right – Owner’s Policy

  • ALTA Endorsement 9.10-06 Restrictions, Encroachments, Minerals – Current Violations – Loan Policy

  • ALTA Endorsement 12-06 Aggregation – Loan Policy

  • ALTA Endorsement 12.1-06 Aggregation – State Limits - Loan Policy

  • ALTA Endorsement 28.2-06 Encroachments – Boundaries and Easements – Described improvements

  • ALTA Endorsement 32.1-06 Construction Loan Pending Disbursement

  • ALTA Endorsement 32.2-06 Construction Loan – Loss of Priority – Insured’s Direct Payment

  • ALTA Endorsement 39-06 Policy Authentication

  • ALTA Short Form Limited Coverage Junior Loan Policy

 

The following two forms, which also were approved by the ALTA Board, were withdrawn from final publication by

the Forms Committee for further consideration and development based on the comments received:

  • ALTA Endorsement 11.2-06 Mortgage Modification with Additional Amount of Insurance

  • ALTA Endorsement 40-06 Tax Credit

 

The published forms have been updated on the ALTA website at ALTA website and will be available to everyone for several weeks before access is restricted to ALTA members and policy forms licensees.

 

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