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.

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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]
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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.