By: David Ferrell
NC LEGISLATURE ADJOURNS THE 2021 SESSION
After much anticipation, the North Carolina legislature adjourned the 2021 legislative session on Friday March 11, 2022. The Senate approved the adjournment resolution on Wednesday March 9 and the House approved the resolution on Thursday March 10. The Resolution does provide for two, three-day sessions to be held April 4-6, and May 4-6, 2022. Speaker Tim Moore and President Pro Tempore Phil Berger both stated they do not expect votes on any substantive bills during either of those sessions.
Speaker Tim Moore noted in his remarks to his House colleagues that this has been the longest “Long Session” in the history of the State, having begun in January 2021. This was an unusual session in that the legislature redrew congressional and legislative districts in 2021, and stayed in session to address various court challenges to the new district maps. In response to the Supreme Court’s ruling in one of the challenges, the legislature redrew congressional and legislative districts in early 2022. The legislative districts were then approved by the trial court, and the congressional maps were modified, then approved by the trial court. These modified congressional maps will be used for the 2022 election, but can be redrawn next year for use in future elections.
Various legislative study committees will meet in the interim before the legislative “short” session begins, including the NC Courts Commission, the General Statutes Commission, and various others.
The legislative “short” session will begin on May 18, the day after the primary elections. It is expected that the legislature will adjourn the short session around June 30 or shortly thereafter. Given that many legislators will be campaigning in new and/or redrawn districts, there is an interest in keeping the 2022 legislative session short – so members will have more time to get to know the voters in their new and/or redrawn districts.
Senate Bill 336, Condo Act/Restitut'n/Market.Title Act Changes
During the 2022 legislative session, we expect the legislature to consider Senate Bill 336, Condo Act/Restitut'n/Market.Title Act Changes. The original bill contained Condo Act technical changes that were proposed by Investors Title, the NC Land Title Association, RELANC, and the Real Property Section of the NC Bar Association. In addition to Parts I and II, which contain the original provisions of the bill, the House added two other provisions: Part III – Would require persons convicted of first-, second-, or third-degree sexual exploitation of a minor to make restitution to the victim, unless the victim has not been identified; Part IV – Would exempt from the Marketable Title Act provisions contained in a declaration applicable to certain condominium, cooperatives, and planned communities.
Regarding Part IV, under the Marketable Title Act, Chapter 47B of the General Statutes, if a person claims title to real property under a chain of record title for 30 years, and no other person has filed a notice of any claim of interest in the real property during the 30-year period, then all conflicting claims based upon any title transaction prior to the 30-year period are extinguished, except for claims subject to one of the exemptions set forth in G.S. 47B-3.
G.S. 47B-3(13) exempts the following from extinguishment by operation of the Marketable Title Act: "Covenants applicable to a general or uniform scheme of development which restrict the property to residential use only, provided said covenants are otherwise enforceable. The excepted covenant may restrict the property to multi-family or single-family residential use or simply to residential use. Restrictive covenants other than those mentioned herein which limit the property to residential use only are not excepted from the provisions of Chapter 47B." Other than covenants exempted by G.S. 47B-3(13), there currently is no exemption for rights arising specifically under declarations applicable to condominiums, cooperatives, and planned communities.
Part IV would enact new subdivision G.S. 47B-3(14), to provide an exemption from the Marketable Title Act for provisions contained in a declaration of covenants applicable to any of the following: 1. A condominium created under Chapter 47A or Chapter 47C; 2. A cooperative as defined in Chapter 47F;1 or 3. A planned community, other than one in which all lots are restricted to nonresidential purposes, whenever created, to which any provisions in Chapter 47F apply; provided that this exemption would not apply to a planned community created before January 1, 1999, unless it is governed by an owners' association in existence as of November 1, 2021. The language for new subsection (14) was developed by the Community Association Institute (CAI), the NC Land Title Association, and the Real Property Section of the NC Bar Association.
The Senate Bill 336 is currently in a conference committee of members of the House and Senate that will attempt to reach a compromise on the bill. The members of the conference committee are: Senate - Senator Daniel, Chair; Senator Lee; Senator Galey; House – Representative Stevens, Chair; Representative Davis; Representative Zachary. I understand that the Senate is concerned with the provision added in the House that would provide restitution to victims of sexual assault, and is not concerned with the real estate related provisions of the bill.
House Bill 776, Remote Notarization/Gov’t Transparency
We also expect the legislature to consider House Bill 776, Remote Notarization/Gov’t Transparency, prior to and during the 2022 legislative session. House Bill 776 would enact a permanent remote notary process (RON) for use in North Carolina. The House and Senate have each passed a version of RON. Since the two versions are different in several respects, the bill is currently in a conference committee of members of the House and Senate that will attempt to reach a compromise on the bill. The members of the conference committee are: Senate - Senator Daniel, Chair; Senator Rabon; Senator Edwards; Senator Krawiec; House – Representative D. Hall, Chair
It appears that the two primary policy issues to be worked out are (1) the transboundary issue – whether to limit the use of RON to principals located in North Carolina or whether to have no limitation on where the principal can be located; and (2) what documents to include in the list where RON can be used and which ones to exclude. I expect NCLTA to work with the various stakeholders to determine if an agreement can be reached on these issues, so the bill can move forward in 2022.
During the week of March 7, the legislature passed a budget technical correction bill. As you may recall, the temporary remote notary provisions enacted during COVID expired December 31, 2021. Although the NC Secretary of State requested the legislature restate and extend the temporary remote notary provisions, this bill did not extend the temporary remote notary provisions.
For more information about legislation described in this article, feel free to contact me at firstname.lastname@example.org or (919) 573-7421. Information is also available on the General Assembly’s website: www.ncleg.gov.
Prepared By: David P. Ferrell, Esq. - NCLTA Lobbyist
NEXSEN PRUET PLLC
4141 Parklake Avenue, Suite 200
Raleigh, NC 27612
Telephone: (919) 573-7421