Bill Summary for H 584 (2017-2018)

Summary date: 

Jun 21 2017

Bill Information:

View NCGA Bill Details2017-2018 Session
House Bill 584 (Public) Filed Wednesday, April 5, 2017
AN ACT TO CLARIFY THE PROCESS FOR CORRECTING NONMATERIAL ERRORS IN RECORDED INSTRUMENTS OF TITLE, TO CREATE A CURATIVE PROCEDURE FOR OBVIOUS DESCRIPTION ERRORS IN DOCUMENTS OF TITLE, AND TO CREATE A SEVEN-YEAR CURATIVE PROVISION FOR CERTAIN DEFECTS IN RECORDED INSTRUMENTS OF TITLE.
Intro. by Jordan, Stevens, Dulin.

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Bill summary

Senate committee substitute makes the following changes to the 2d edition:

Amends GS 47-36.1 (Notice of errors in recorded instruments of title). Authorizes notice of nonmaterial typographical or other minor errors (was, or other minor nonmaterial errors) in deeds or other instruments recorded with the register of deeds by recording a corrective notice affidavit. Provides that an error that would affect the respective rights of a party to the instrument is not a nonmaterial typographical or minor error.

Amends GS 47-36.2 (Cure of obvious description errors in recorded instruments). Amends definition ofauthorized attorney to include attorneys authorized by title insurance companies or title insurance agents and to make technical changes. Amends definition ofobvious description error to replace the first three types of listed errors with an error defined as follows: one or more of five listed types of information, as stated in the instrument, are inconsistent in that one or more identify the property incorrectly, and the error is made apparent by reference to other information contained in the instrument, contained in an attachment to the instrument, or contained in another instrument in the chain of title for the subject parcel, including a recorded plat. Further includes other omitted descriptive information within the definition, and subjects all types of omitted descriptive information to the requirement that the correct legal description may be determined by reference to other information contained in the instrument. Amends the definition oftitle insurance agent to require that the agent have issued, or propose to issue, a policy of title insurance covering real property described in a recorded instrument needing correction. Amends the definition oftitle insurance company to further include companies that have proposed to issue a policy of title insurance covering real property described in a recorded instrument needing correction. Requires service of the notice of intent and copy of an unsigned proposed curative affidavit to be made under Rule 4(j) or Rule 4(j5) of the Rules of Civil Procedure (was, Rule 4). Amends the parties entitled to service of notice to require notice with a deed of trust to further go to any assignee of the beneficiary known to the party filing the curative affidavit or its authorized attorney. Further requires notice, with UCC fixture filings or other recorded instruments of title(as defined) that may be adversely affected by the recording of the curative affidavit, to go to any current record mortgagee, record beneficiary, record assignee, or record secured party. Clarifies that notice to title insurance companies is required if applicable and known. Replaces the provisions regarding if and when an authorized attorney may record a proposed curative affidavit with a provision authorizing the authorized attorney to record a proposed curative affidavit at any time after 45 days have elapsed since the last person to be served was served, so long as the attorney has received no written objections; however, if the attorney receives a written objection at any point prior to the recordation of the curative affidavit, the curative affidavit may not be recorded. Creates new subsection (e), requiring a written objection to the recordation of the proposed curative affidavit or disputing the facts recited in the proposed curative affidavit to be delivered in one of five listed ways. Re-letters subsections accordingly. Amends the conditions that make an affidavit sufficient as a curative affidavit to require the email and facsimile number of the affiant, if available, and to make conforming changes. Exempts the trustees or substitute trustees in a deed of trust from the names in which the register of deeds must index the curative affidavit. Makes conforming changes. Provides that curative affidavits in substantially the statutory form, when properly completed, are sufficient to satisfy the requirements of subsection (f) (former subsection (e)). Amends the statutory form. Specifies that the period for the commencement of an action contesting the validity or efficacy of a curative affidavit under the statute is one year from the date of recording, with an exception for actions for damages.

Amends proposed GS 47-408.28 by deleting proposed (a) and (b) and providing the following instead. Makes an instrument conveying, or purporting to to do so, an interest in real property that has a defect, irregularity, or omission effective to vest tile as though there was no defect, etc., if: (1) the instrument is recorded in the county where the property is situated and (2) the material defect, irregularity, or omission is not corrected within seven years of recordation. Proper recordation and indexing of a curative instrument or notice of lis pendens tolls this seven-year period. Specifies conditions that must be met in order for an instrument to be deemed to contain a defect, irregularity, or omission.

Makes the act effective August 31, 2018 (was, when the act became law).

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