Bill Text: NC S400 | 2013-2014 | Regular Session | Introduced
Bill Title: Revise Homeowner/Homebuyer Protection Act
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-03-25 - Ref to Commerce. If fav, re-ref to Judiciary II [S400 Detail]
Download: North_Carolina-2013-S400-Introduced.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
S D
SENATE DRS75182-RO-9 (03/14)
Short Title: Revise Homeowner/Homebuyer Protection Act. |
(Public) |
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Sponsors: |
Senator Allran (Primary Sponsor). |
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Referred to: |
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A BILL TO BE ENTITLED
AN ACT Amending the homeowner and homebuyer protection act.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 47G‑1 reads as rewritten:
"§ 47G‑1. Definitions.
The following definitions apply in this Chapter:
(1) Covered lease agreement or lease agreement.
– A residential lease agreement that is combined with, or is executed
concurrently with, an option contract. in which all or some portion of
the rental payments made are applied to the purchase price of the real property
which is the subject of the covered lease agreement and the covered option
contract.
…
(4) Option contract or contract. – An option contract for the purchase of property that includes or is combined with, or is executed in conjunction with, a covered lease agreement. The term does not include a contract which 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.
(5) Option fee. – Any payment, however denominated, made by the option purchaser to the option seller that constitutes the price the option purchaser pays for the right to buy the property at a specified price in the future. Such payment applied at the closing of the property shall not constitute equity, and such payment shall not in and of itself create a right of equitable redemption.
…."
SECTION 2. G.S. 47G‑7 reads as rewritten:
"§ 47G‑7. Remedies.
A violation of any provision of this Chapter constitutes
an unfair trade practice under G.S. 75‑1.1. An option purchaser
may bring an action for the recovery of damages, to void a transaction executed
in violation of this Chapter, as well as for declaratory or equitable relief
for a violation of this Chapter. The rights and remedies provided herein are
cumulative to, and not a limitation of, any other rights and remedies provided
by law or equity. Nothing in this Chapter shall be construed to subject an
individual homeowner selling his or her primary residence directly to an option
purchaser to liability under G.S. 75‑1.1."
SECTION 3. G.S. 47H‑2 reads as rewritten:
"§ 47H‑2. Minimum contents for contracts for deed; recordation.
…
(b) Contents. – A contract for deed contract shall contain at least all of the following:
…
(14) A description of conditions of the
property that includes whether the property, including any structures thereon,
has water, sewer, septic, and electricity service, whether the property is in a
floodplain, whether anyone else has a legal interest in the property, and whether
restrictive covenants prevent building or installing a dwelling. If restrictive
covenants are in place that affect the property, a copy of the restrictive
covenants shall be made available to the purchaser at or before the execution
of the contract.
(14a) A completed residential property disclosure statement as provided in Chapter 47E of the General Statutes.
…
(16) If the property being sold is encumbered
by a deed of trust, mortgage, or other encumbrance evidencing or securing a
monetary obligation which constitutes a lien on the property, and the seller is
not a licensed general contractor within the meaning of Chapter 87 of the
General Statutes, or a licensed manufactured home dealer within the meaning of
Article 9A of Chapter 143 of the General Statutes, a statement of the amount of
the lien, and the amount and due date, if any, of any periodic payments.
…."
SECTION 4. G.S. 47H‑6 reads as rewritten:
"§ 47H‑6. Title requirements.
(a) A seller may not execute a contract for deed with a purchaser if the seller does not hold title to the property. If the title is not held in fee simple, free from any deeds of trust, mortgages, or other encumbrances evidencing or securing a monetary obligation which constitutes a lien on the property, the seller may execute a contract for deed only if the mortgage or encumbrance is in the name of the seller and meets at least one of the following conditions:
…
(3) It was placed on the property by the seller prior
to the execution of the contract for deed, if the seller is not a licensed
general contractor within the meaning of Chapter 87 of the General Statutes, a
licensed manufactured home dealer within the meaning of Article 9A of Chapter
143 of the General Statutes, or a licensed real estate broker within the
meaning of Chapter 93A of the General Statutes, if the lien is attached only
to the property sold to the purchaser under the contract for deed,Statutes,
and the seller continues to make timely payments on the outstanding mortgage or
encumbrance. encumbrances and notifies the purchaser in a separate
written disclosure, provided at or before the execution of the contract, in 14‑point
type, boldface, capital letters, the following statement: THIS PROPERTY HAS
EXISTING LIENS ON IT. IF THE SELLER FAILS TO MAKE TIMELY PAYMENTS TO THE LIEN
HOLDER, THE LIEN HOLDER MAY FORECLOSE ON THE PROPERTY, EVEN IF YOU HAVE MADE
ALL YOUR PAYMENTS.
(b) If the property being sold is encumbered
by one or more deeds of trust, mortgages, or other encumbrances evidencing or
securing a monetary obligation which constitutes a lien on the property, the
seller must notify the purchaser in a separate written disclosure, provided at
or before the execution of the contract, in 14‑point type, boldface,
capital letters, the following statement: THIS PROPERTY HAS EXISTING LIENS
ON IT. IF THE SELLER FAILS TO MAKE TIMELY PAYMENTS TO THE LIEN HOLDER, THE LIEN
HOLDER MAY FORECLOSE ON THE PROPERTY, EVEN IF YOU HAVE MADE ALL YOUR PAYMENTS.
…."
SECTION 5. G.S. 47H‑8 reads as rewritten:
"§ 47H‑8. Remedies.
A violation of any provision of this Chapter constitutes
an unfair trade practice under G.S. 75‑1.1. A purchaser may
bring an action for the recovery of damages, to rescind a transaction, as well
as for declaratory or equitable relief, for a violation of this Chapter. The
rights and remedies provided herein are cumulative to, and not a limitation of,
any other rights and remedies provided by law or equity. Nothing in this
Chapter shall be construed to subject an individual homeowner selling his or
her primary residence directly to a buyer to liability under G.S. 75‑1.1."
SECTION 6. G.S. 75‑120 reads as rewritten:
"§ 75‑120. Definitions.
The following definitions shall apply in this Article:
(1) Default. – Whenever a property owner is more
than 60 days delinquent a notice of default is filed in the county where
the property is located on any loan or debt that is secured by the
property, including real estate taxes.
…
(3) Foreclosure rescue transaction. – A transfer of residential real property, including a manufactured home that is permanently attached to the real property, which includes all of the following features:
a. The real property is the principal residence of the transferor.
b. The transferor is in default or legal proceedings have been initiated to foreclose on the transferor's property.
c. The transferee, an agent of the transferee, or others acting in concert with the transferee make representations that the transfer of the residential property will enable the transferor to prevent, postpone, or reverse the effect of foreclosure and to remain in the residence.
d. The transferor retains an interest in the
property conveyed, including a tenancy interest, an interest under a
lease‑purchase agreement, anlease with option to purchase
agreement, or an option to reacquire the property, or any other legal,
equitable, or possessory interest in the property conveyed.property.
…."
SECTION 7. G.S. 75‑121 reads as rewritten:
"§ 75‑121. Foreclosure rescue transactions prohibited; exceptions; violation.
(a) It is unlawful for a person or entity other than
the transferor to engage in, promise to engage in, arrange, offer, promote,
solicit, assist with, or carry out a foreclosure rescue transaction for
financial gain or with the expectation of financial gain, unless prior to or at
the time of transfer, the transferee pays the transferor at least fifty percent
(50%) of the fair market value of the property as determined by a licensed
appraiser. An appraisal to determine the fair market value of the property must
be performed no more than 90 days prior to the transfer. The appraisal shall
be delivered to the transferor no more than three days after the appraisal is
performed and no less than seven days prior to the transfer of the property.
This section does not apply to exempt transactions.
…."
SECTION 8. This act becomes effective October 1, 2013, and applies to transactions entered on or after that date.