Bill Summary for H 654 (2011-2012)

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Summary date: 

Apr 6 2011

Bill Information:

View NCGA Bill Details2011-2012 Session
House Bill 654 (Public) Filed Wednesday, April 6, 2011
Intro. by McCormick, LaRoque.

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Bill summary

Amends GS 47G-1, adding that the term option contract or contract does not include a contract that obligates the buyer to purchase the property even though the obligation may be subject to one or more contingencies or unilateral rights to terminate the contract. Amends GS 47G-2, adding that the purchaser’s equitable right of redemption upon default and forfeiture will also be extinguished by the filing of a notarized memorandum of termination of option contract in the applicable office of the register of deeds, or by delivering to the option purchaser a written notice of cancellation of the option contract and specifying any material breach. Deletes provision stating that the purchaser’s right of redemption is extinguished by a final judgment or court order. Amends GS 47G-3, clarifying that the provisions of GS Chapter 42 (Landlord and Tenant law) apply to covered leased agreements, unless the parties agree otherwise, and that the magistrate has original jurisdiction over matters involving covered lease agreements.
Amends GS 47H-2(b) (minimum contents for contracts for deed) to require a contract for deed to also include a completed residential property disclosure statement as specified. Deletes provisions requiring the contract for deed to include a description of property conditions and a statement of the amount of the lien in specified circumstances. Amends GS 47H-6 (title requirements) to permit a seller to execute a contract for deed under specified circumstances and only if the mortgage or encumbrance is in the name of the seller and meets one of the conditions under existing law, including the following condition: the mortgage or encumbrance was placed on the property by the seller before the execution of the contract for deed, if the seller is not a licensed general contractor, a licensed manufactured home dealer, or a licensed real estate broker, and the seller continues to make timely payments on the outstanding mortgage or encumbrance and notifies the purchaser as detailed (deletes language providing for notification when the property is encumbered by one or more encumbrances evidencing or securing a monetary obligation constituting a lien). Makes conforming changes. Amends GS 47H-7, prohibiting a seller from charging a late payment charge under a contract for deed more than 5% (currently, 4%) of the amount of the payment past due.
Amends GS 75-120 (definitions applicable to Article 5A: Home Foreclosure Rescue Scams), clarifying that default occurs whenever a notice of default is filed in the county where the property is located (currently, whenever a property owner is more than 60 days delinquent) on any loan or debt secured by the property. Clarifies that foreclosure rescue transaction is a transfer of residential real property that includes four features under existing law, including the requirement that the transferor retain a tenancy interest, an interest under a lease with option to purchase agreement, or an option to reacquire the property (clarifies current language). Amends GS 75-121 (pertaining to foreclosure rescue transactions), deleting the delivery timeline for the appraisal, and deleting language excepting exempt transactions from the statute.
Applies to transactions entered on or after October 1, 2011.