Winter 2020

President's Message

By: Don Merritt

                                                                                    Beginning Another New Year

Greetings to all fellow NCLTA member companies, agents, underwriters and attorneys. Your North Carolina Land Title Association membership and staff have been busy since our last newsletter to you. NCLTA hosted its successful 2019 Annual Convention on September 12-14 at the historic Cavalier Hotel in Virginia Beach, Virginia.  The Cavalier had recently undergone a major renovation and was a splendid site for our fall meeting. Even the agency that issued the title insurance policy insuring the purchase and $80 million restoration project was represented.  Approximately 75 attorneys, title professionals and guests from North Carolina and Virginia attended the week’s events which included the President’s Banquet and 6 hours of Continuing Legal Education credit.  Those participating in the CLE Program heard excellent presentations on case law (by Chris Burti, who also shined as the Emergency IT Department), the continuing 2019 Legislative Session (David Ferrell), Commercial Closings (Margaret Shea Burnham) and Claims (Zip Edwards).  We also were fortunate to be able to hear from Brian Taylor, Chair of the NCBA Real Property Section; Dan Wold, ALTA Board of Governors; and Dr. Robert McNab from Old Dominion University, who provided an entertaining Economic Update. And the NCLTA Executive Committee for 2019-2020 was elected and installed. You can find our names and contact information under the NCLTA Leadership tab under the WHAT IS NCLTA? => NCLTA Leadership heading on the NCLTA website (www.nclta.org) and we encourage you to contact us with any questions,  concerns or comments.

As the newly elected President of NCLTA, I was fortunate to be able to attend the American Land Title Association’s 2019 Conference, ALTA ONE, October 22-25 in Austin, Texas.  ALTA ONE is the largest gathering of title insurance and settlement industry professionals in the nation.  And what a gathering it was!  The theme for this year’s conference was UNBOUND:  Unbound because it was in Austin, called the live music capital of the world whose motto is “Keep Austin Weird;” Unbound because the title industry is shifting and title professionals need to think creatively and seize the opportunity to adapt; and Unbound because we need to embrace innovation and technology to be competitive and effective in evolving our industry and adapting to the next generation of title.  Over 1,000 attendees participated in the general Omni Session along with numerous educational sessions, including CLE and the continuing emphasis on cybersecurity and wire fraud. Over 50 sponsors and vendors were present providing information on their latest products and services, not to mention a lot of great trinkets, gimmicks, t-shirts, phone charges and mugs, just to name a few.

Finally, ALTA ONE provided the opportunity for attendees to learn of the benefits and resources ALTA offers both in the areas of education of members and their customers and to provide the means and methods to deliver our products in the twenty-first century. I highly recommend each of you consider attending an NCLTA Convention (in Hilton Head in 2020) or an ALTA ONE Conference (New York City in 2020).  Get Unbound!

NCLTA 2020 Convention

By: Tracy Steadman, Executive Director

6.5 hours of CLE Planned
Expected Topics: ALTA Update, Case Law, Economic Update, Ethics, Legal Descriptions, Legislative Update, NCBA Real Property Update

Featured Social Activities: Welcome Reception, Annual Banquet & President’s Reception, Attorney Section Breakfast

NCLTA has a discounted room rate of $259 per night. Call to make your reservations today (800) THE-OMNI (843-6664). Please reference NCLTA Annual Convention for the group rate.

Please contact our office for a list of Sponsorship Opportunities!

Attorney Section Update

by: Jeff Dunham

One of the many perquisites of being married to a law professor (who does not teach real property!) is getting to tag along on great summer trips.  This summer my wife was asked to present at a conference on the European legal system in Sarnico, Italy. Sarnico is a small city located at southern tip of the beautiful Lake Iseo in Lombardy.  Just Google it for pictures.  Easy description is we have nothing like it in North Carolina: mountains topped with snow in summer dropping straight into clear blue, very cold (to a good southerner) water.  But it is beautiful.

The first two days of the conference after Catherine went off to her meeting, I took my time at breakfast, biked around the lake or sat by the pool.  However, I was unaware Stefano, the entrepreneurial Italian attorney who arranged the conference for American law professors has an overlapping conference for Italian lawyers.  The final day of the conference for the Italian lawyers was a “speed dating” education/discussion in American law—for which my wife had volunteered me.  Each of the American lawyers was assigned a legal topic to address and discuss with the Italians. Small groups of Italian attorneys rotated from table to table at 5-minute intervals—and the Americans gave same presentation and had vastly different discussions with each group.

Luckily my topic was real property—specifically title insurance and closings. Glad I didn’t get the discussion on 2d amendment rights! The two things I heard from each group: (1) In Italy my law practice would make me a notary (Notaio)—not a practicing attorney; and (2) They have no concept of title insurance or why we need it in America!  As to the notary part—it isn’t the same as our notary publics here.  In Italy the Notaio is an appointed public official who prepares and presides over contracts and deeds.  They are as I gathered, highly trained “technicians” who preform pretty much all the functions of a closing attorney here in North Carolina.  However, they do not represent either of the sides of a transaction—they prepare and close a transaction based on the agreement of the parties.

Because the Notaios are public officials and have such skill and because the Italians put great faith in the officially recorded documents, they can’t imagine how what we would call a title dispute would arise.  If a deed is recorded for a property, then that is the state of the title. There is no disputing it! Therefore, there is no need for title insurance.  My new Italian friends cannot imagine a lawsuit arising over ownership of real property. The recorded documents settle ownership.  I guess it would be a great place to sell title insurance as the claims would be non-existent.

In addition to the points above, I also discovered generally the Italian lawyers are a lot better looking and more stylish than the American bar!  The trip (including side visit to roman coliseum in Verona), scenery and food were all as awesome as expected, who knew I’d learn comparative law and test the market for title insurance.

Department of Insurance Increases Rates

Effective: March 1, 2020

The North Carolina Department of Insurance authorized an increase for title insurance premiums which rate will go into effect March 1, 2020.  The new rate is an overall increase of one percent above current rates, which have been in effect since October 2018.   Specific increases will impact all tiers of the Regular Rates for Owner and Loan policies, as well as a slight increase for the first tier of Closing Services Insurance. 

Questions about the interpretation, implementation, or calculations of the new rates should be directed to your various Underwriters

Legislative Update

By: David Ferrell

Lawmakers concluded business for the year on Friday, November 15, and will not return to session until January 14, 2020. To date there have been 249 bills enacted into law. The January session’s rules specify that lawmakers can address veto overrides, bills addressing access to health care, budget modifications, among other items. Once that session ends, the legislature is expected to adjourn until the start of the 2020 “short session”, which typically starts in May.

Last month, a three-judge panel entered a ruling indicating that the state needs to redraw its congressional maps based on a similar ruling over a partisan gerrymandering of the state legislative districts. The judges’ order granted an injunction to halt the 2020 primaries as a result of the case. The same three judge panel also approved the legislature’s recent redraw of the state legislative maps. When redrawing the map, lawmakers used the same open committee process used when they redrew legislative districts early this year and had a public hearing to accept public comments. Per court order, legislators excluded using political data when drawing the map. The new map leans to elect five Democrats and eight Republicans, compared to the current map that has a three Democrats to ten Republicans breakdown. While legislators did take incumbency into account and no congressional members were double bunked, the maps may mean that two sitting congressmen will face unfavorable odds in the 2020 election. The map will have to be approved by the three-judge panel that struck down the current map before they can go into effect for the 2020 election. The judges have reserved the right to move the candidate filing period if they find it necessary.

Last week the legislature approved a nearly $230 million disaster relief package to help assist with the recovery efforts from Hurricanes Mathew, Florence, and Dorian. Around $121.5 million of the bill is used for various matching requirements for drawing down federal funds. The bill also contains funds to prepare for future storms with flood mapping and water level monitors. $15 million is appropriated to assist local governments with cash flow needs in the form of grants and loans. The Golden L.E.A.F. Foundation also receives $15 million under the bill to be used to assist local governments and non-profit organizations in their recovery efforts. The bill contains various appropriations to government entities that sustained damage during the storms.

The legislature will reconvene on January 14, 2020.

Here are bills introduced this session that may be of interest to NCLTA members: 

House Bill 131, Repeal Map Act, repeals the Transportation Corridor Official Map Act, which the NC Department of Transportation used for many years to impact land that would be in the path of a highway project. Effective: June 21, 2019. Session Law 2019-35.

House Bill 201, Register of Deeds Tax Cert. Expansion, would allow Randolph County to not accept the registration of a deed transferring real property when taxes are delinquent. During the legislative process, the bill was expanded to apply to all counties upon a vote of the county commissioners but was amended back to its original form – to only apply to Randolph County. Effective June 11, 2019. Session Law 2019-25.

House Bill 309, Adverse Possession Changes, would make various changes to the adverse possession law. The bill would extend the period to acquire property by adverse possession from 20 years to 30 years. The bill provides that if a possessor acquires title in fee to property by means of adverse possession, the possessor shall pay the previous owner the fair market value of the property at the time of the acquisition and shall reimburse the previous owner for all property taxes incurred for the 30 years that the property was adversely possessed. The bill provides that title to property may not transfer by adverse possession if the property that is being adversely possessed is entirely within one foot of the recorded boundary of the property. The bill would be effective when it becomes law and would apply to actions for the recovery or possession of real property, or the issues and profits thereof, commenced on or after that date. This bill has not been considered by any legislative committee and has not been enacted into law.

House Bill 620, Subdivision Streets, DOT Acceptance, requires the NC Department of Transportation to (1) compile a public street information database which will convey the status of the roads within the state and it will be updated at least monthly; and (2) update the subdivision roads manual regularly. Effective July 22, 2019. Session Law 2019-156.

House Bill 675, Building Code Regulatory Reform, would make various changes to the building code. Effective October 1, 2019. Session Law 2019-174.

House Bill 904, Identity Theft Protection Act, the bill provides that organizations with a “breach” involving social security numbers would be required to offer at least two years of free credit monitoring to affected individuals. The definition of breach would include mere access to personal information. The bill provides that organizations would have affirmative data security obligations – and be exposed to claims for treble damages and attorney’s fees for alleged violations. The bill would impose a new affirmative duty on organizations to implement and maintain reasonable security procedures and practices, appropriate to the nature of the personal information and the size, complexity, and capabilities of the business. The bill would treat any violation of this new requirement as a per se violation of North Carolina’s unfair or deceptive trade practices statute.  This bill has not been considered by any legislative committee and has not been enacted into law.

House Bill 920, Condominium Association Changes, would make various changes to the condominium plat requirements; would amend the list of items that must be included in the declaration for a condominium; would amend the method for amending a declaration; and would enact new GS 47C-2-117.1 allowing a unit owners' association to petition the clerk of superior court to resolve ambiguities, errors, or inconsistencies in the condominium instruments that are the source of legal and other disputes pertaining to the legal rights and responsibilities of the unit owners' association or individual unit owner. The bill also would allow the instruments to be reformed to correct scrivener's errors. Sets out the superior court's jurisdiction over these matters. The decision was made to have this bill make crossover, and the interest groups would meet before the 2020 legislative session to arrive at a consensus bill. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 312, Transfer on Death Deeds, would enact the Uniform Real Property Transfer of Death Act as Article 11 of Chapter 31 of the General Statutes. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 315, North Carolina Farm Act of 2019, would, among other things, create a process by which the underlying fee owner of land encumbered by any easement acquired by a utility company, on which the utility company has not commenced construction within 20 years of the date of acquisition, may file a complaint with the Utilities Commission for an order requiring the utility company to terminate the easement in exchange for payment by the underlying fee owner of the current fair market value of the easement. If the utility company does not agree that the easement should be terminated, the utility company may request a determination from the Utilities Commission as to whether the easement is necessary or advisable for the utility company's long range needs for the provision of utilities to serve its service area, and whether termination of the easement would be contrary to the interests of the using and consuming public. If the parties cannot reach a mutually agreeable fair market value, the Commission would request the clerk of superior court in the county where the easement is located to appoint commissioners to determine the fair market value in accordance with the eminent domain valuation process. This section would become effective October 1, 2019 and would apply to easements acquired on or after that date.  The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 355, Land-Use Regulatory Changes, would make various changes to the land use and zoning statutes. This bill contains the Ch 160D recodification of the land use and zoning statutes proposed by the Zoning, Planning and Land Use Section of the NC Bar Association. Effective July 11, 2019. Session Law 2019-111.

Senate Bill 362, Annual Report Standardization, would require corporations, LLCs, partnerships, etc. to electronically submit annual reports to the Secretary of State; would remove the requirement for insurance companies subject to GS Chapter 58 to submit an annual report; would require additional information to be included in the annual report, to include the registered agent's email address; the name, mailing address, email address, and telephone number of an individual authorized to provide information regarding persons with authority to bind the entity; and an email address for the entity if different from the email address of the registered agent provided. The bill would require non-profit entities to electronically and at no charge submit an annual report to the Secretary of State which would include the same information as required of corporations, LLCs, etc. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 364, NC Receivership Act Revisions, would make various changes to the Receivership Act, as recommended by the Bankruptcy Section of the NC Bar Association. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 419, Technical and Other Changes, would make two technical changes to address confusion regarding the effective date of a recent statute that relates to the recording of documents with the Register of Deeds, including clarifying that the Register of Deeds is not required to verify or make inquiry concerning the capacity or authority of the person or entity shown as the drafter on an instrument. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Senate Bill 523, Rev. Laws Clarifying & Administrative Changes, originally provided that “nonresident sellers” would be required to report certain information to the NC Department of Revenue about a real estate sale. In the House, this provision was removed; and legislative staff reported that the “nonresident seller of real property” issue will be studied in the interim by the Revenue Laws Study Commission.

Senate Bill 594, Register of Deeds Updates. Section 1: changes the margins required on all instruments, except UCC financing statements, presented for registration on paper at the register of deeds. Currently these instruments must have a blank margin of 3 inches at the top of the first page and at least ¼ inch on the remaining sides of the first page and on all subsequent pages.  The bill changes ¼ inch to ½ inch. Effective: October 1, 2019, and apply to instruments, certificates, and amended certificates submitted on or after that date. Section 2: creates a new section under GS 161-30 for electronically recorded maps or instruments. These maps and instruments are not required to have the name and address of the person to whom the instrument is to be returned on the face of the document. The register of deeds is not required to return the item but may do so in accordance with an authorizing agreement. Effective: October 1, 2019, and apply to instruments, certificates, and amended certificates submitted on or after that date. Section 3: Currently, it is illegal to file a false lien or encumbrance against real or personal property of a public officer, a public employee, or their immediate family member on account of the performance of the public officer of public employee's official duties. This section modifies the existing criminal statute for filing false liens and encumbrances by doing the following: 

• Making it illegal to present for filing or recording a false lien or encumbrance against the real or personal property of an owner or beneficial interest holder.
• Allowing the register of deeds to refuse to record the purported lien or encumbrance if they have a reasonable suspicion that the instrument is materially false, fictitious, or fraudulent.
• Requiring that the party submitting an instrument pay the filing fee.
• Clarifying that the presentation of an instrument that is determined to be materially false, fictitious, or fraudulent shall constitute a violation GS 75-1.1, unfair or deceptive trade practices. Effective: December 1, 2019

Senate Bill 595, Changes to Real Property Statutes, would enact the “Notice of Settlement Act” as new Chapter 47I of the General Statutes, to allow a “notice agent” to register a “notice of settlement” with the Register of Deeds to provide notice of a settlement that the notice agent believes will occur within 60 days of the filing. The purpose of this Act is to provide clarity and certainty to the land records and address the move towards e-filing and the correspondence delay or gap between when records are filed and when they are uploaded to the Register of Deeds’ electronic filing system. The bill was not enacted into law but is eligible for consideration during the 2020 legislative session.

Prepared By: 

David P. Ferrell, Esq. - NCLTA Lobbyist

NEXSEN PRUET PLLC

150 Fayetteville Street, Suite 1140

Raleigh, North Carolina 27601

Telephone: (919) 573-7421

dferrell@nexsenpruet.com 

www.nexsenpruet.com 

Membership Renewals

Notice of Settlement Act Update

Message from the Editor

By: Sharon Schlacter

The Winter 2020 Edition of the NCLTA Newsletter is attached. I hope you will find the information informative and useful in your firms and businesses. Our contributors have dedicated a great deal of time and energy in providing topics of interest to NCLTA members and we thank them. Your questions and comments are welcomed.

Executive Staff