Legislative Update

By Brian W. Byrd

I hope this message finds each of you well and enjoying professional fulfillment in your law practice. I expect that many of us would say that the prior year has been among one of the most unusual, and perhaps trying, of our lifetimes. Although probably not at the top of our list of challenges wrought by the COVID-19 pandemic, I am sure that most of us have missed gathering with our colleagues at in-person CLE programs and other section activities. As we head towards a full reopening of society and commerce, which I hope will include in-person meetings and gatherings in the not-too-distant future, I would like to make sure that our section members are aware of several pending bills in the General Assembly of interest to real estate practitioners so that you may provide feedback to your representatives as you see fit. This legislative session is particularly busy with impactful legislation for real estate lawyers, and this message will touch upon only certain significant bills: Read more

Why You Don’t Want to Close the “Instant Flip”

By Peter U. Kanipe

The real estate market has not only completed its comeback, but it has also seen property sales hitting record highs in many markets. And with this uptick in sales comes a more aggressive and potentially risky type of transaction known as “flipping.”

A flip transaction is when a real estate investor buys a piece of property with the intention of quickly reselling to turn a profit. There is nothing illegal on its face about flipping properties if there is no fraud involved. But there is one type of flip transaction, which I call the “instant flip,” that comes with a wide variety of ethical pitfalls for closing attorneys.

Read more

COVID-19 Checklist – Issues to Consider for Commercial Real Estate Purchase Contracts and Closings

By Margaret Shea Burnam

What we learned in 2020 was to expect the unexpected. Prior to February of 2020, who would have predicted the impact of a pandemic in general, let alone COVID-19 in particular, when drafting commercial real estate purchase contracts? Likewise, who would have predicted the impact of COVID-19 on due diligence, loan documents, and closings?

In the immediate aftermath of the initial impact of COVID-19 in the U.S., focus was on whether COVID-19 was within the scope of a force majeure clause or whether COVID-19 could reasonably be construed as an “Act of God.” Attorneys debated whether the governmental “stay-at-home” orders and other similar regulatory orders fell within the legal impossibility and/or frustration of purpose doctrines. Since then, what lessons have we learned?

Read more

Note: Consistency is Key: The Court of Appeals of North Carolina Extends Equitable Subrogation in Real Estate Purchase Transactions in U.S. Bank Nat’l Ass’n v. Estate of Wood

By Parks Noyes

I. Introduction

Equitable subrogation as a remedy has been an established common law doctrine in the United States for over a century.[i] Recognized as a “legal fiction,” equitable subrogation arises in situations “whereby an obligation, extinguished by a payment made by a third [party], is treated as still subsisting for the benefit of this third [party], so that by means of it one creditor is substituted to the rights, remedies, and securities of another.”[ii] Equitable subrogation is used “only to further an equitable result” and its use “will be denied where it would lead to an uncontemplated and inequitable result or where it would work any injustice to the right of others.”[iii] The doctrine is highly favored by courts and given a liberal application due to it being “sufficiently elastic to meet the ends of justice.”[iv] It is now applied in a variety of legal contexts and in many jurisdictions across the United States, including North Carolina. Most commonly, the doctrine is invoked in mortgage priority disputes that arise during mortgage foreclosure actions.[v] In November of 2019, a divided panel of the North Carolina Court of Appeals in U.S. Bank Nat’l Ass’n v. Estate of Wood held for the first time that a party in North Carolina could assert the doctrine of equitable subrogation in the real estate purchase transaction context, resulting in a novel expansion of the doctrine under North Carolina law.[vi]
Read more

Ketan Soni Presents “The New Community Platform”

By Ketan Soni

What You Need to Know About the New Community Platform

This year, the NCBA has switched to a new online community platform. This new community platform for Sections, Divisions and Councils offers many more features than the previous system. Below is a summary of the basics and what you need to know to utilize this platform and its features.

Read more

Reminder to Respond to E-Closing Survey

By Brian Byrd

This is a reminder that today is the deadline to submit a response to the Secretary of State’s E-closing survey as described in my blog post of September 4. Your feedback is vital as we consider measures to facilitate remote closings now and in the future. If you have not done so, please take a few minutes to respond to the survey at https://www.surveymonkey.com/r/ZQ3KZ9D [if the survey does not automatically launch, just right click on it, and select “open hyperlink”].

The deadline to submit the survey is today, September 14, 2020.

We appreciate and value your opinions on this important topic.

Secretary of State’s E-Closings Survey: Provide Your Feedback Today

By Brian Byrd

As Chair of the North Carolina Bar Association Real Property Section, I am reaching out to you on behalf of the North Carolina Department of Secretary of State’s Electronic Mortgage Closing Advisory Committee (the “E-closing Committee”) to seek your help and participation in the below survey. The purpose and intent is to seek feedback from you on your perception of the current state of adoption of electronic mortgage closings and what you feel may be barriers to adoption.

This survey, of course, is completely voluntary, and we have been assured that it will be kept completely blind, anonymous and confidential. We have also been assured that they will not collect any contact or email information.

With COVID-19 and temporary stay at home mandates, the E-closing Committee feels that, now more than ever, people are looking for alternatives to closings that promote as limited contact as possible. But many are still hesitant to implement a solution. The E-closing Committee hopes you will share your understanding, opinions and concerns through this survey so that the E-closing Committee may better address them. Your participation and input is invaluable as the E-closing Committee is working to ensure that we have appropriate tools in place to enable loans to be closed securely and safely during this pandemic and afterwards.

Read more

Welcome Message from the Real Property Section Chair

By Brian Byrd

I hope this message finds you well. I am honored to be the Chair of the Real Property Section for the 2020-2021 NCBA year. Joining me on this year’s Executive Committee are Vice-Chair Christina Pearsall with Schell Bray PLLC in Greensboro, Secretary-Treasurer Lindsay Thompson with The Van Winkle Law Firm in Asheville, and immediate Past Chair Brian Taylor with White & Allen P.A. in New Bern.

As a Section, we owe Brian Taylor a debt of gratitude for his steady guidance during the past year, particularly after the onset of the COVID-19 pandemic. Brian coordinated the Section’s response to the unprecedented challenges to our profession wrought by the pandemic, including measures intended to facilitate the provision of legal services despite business and government office closures, social distancing and economic upheaval. With the Section’s support and in concert with advocacy by other stakeholders in the real estate industry, the Good Funds Settlement Act was temporarily amended to allow disbursements prior to recording of the deed, subject to compliance with certain conditions and requirements, when the applicable Register of Deeds is not accepting documents for recording. In addition, with the Section’s support, the General Assembly adopted legislation temporarily allowing notary acknowledgments to be completed remotely by video. I would like to acknowledge and thank Nancy Ferguson for the significant role that she played in guiding the Section’s efforts with respect to both of these measures.

Read more

Report from Real Property Section Council Meeting

By Brian Z. Taylor

Real Property Section Members,

I hope that you are managing well in this COVID-19 world we find ourselves in today. It is an understatement to say that it has definitely changed our lives and had drastic effects on how we conduct our law practices and businesses. I want to let you know that your Council and NCBA leadership have been working diligently with other groups involved in the real estate industry to help keep us “open for business” and develop alternatives that may be necessary to allow that to happen. The Council held a special call in/Zoom meeting this past Monday to discuss and strategize on what is happening and what may need to happen.

Read more