GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
SESSION LAW 2015-56
HOUSE BILL 513
AN ACT to make technical corrections and other conforming changes to the general statutes concerning real property.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 45‑36.10(c) reads as rewritten:
"(c) The Unless
the satisfaction expressly states that the underlying obligation secured by the
security instrument has been extinguished and the underlying note or other
instrument evidencing the obligation has been cancelled, the recording of a
satisfaction of a security instrument does not by itself extinguish any
liability of a person for payment or performance of the secured obligation."
SECTION 2. G.S. 47C‑3‑104 reads as rewritten:
"§ 47C‑3‑104. Transfer of special declarant rights.
(a) No special declarant
right (G.S. 47C‑1‑103(23)) created or reserved under this
chapter may be transferred except by an instrument evidencing the transfer
recorded in every county in which any portion of the condominium is located. The
Except for the transfer of declarant rights pursuant to subsection (c)
of this section, the instrument is not effective unless executed by the
transferee.
(b) Upon transfer of any special declarant right, the liability of a transferor declarant is as follows:
(1) A transferor is not
relieved of any obligation or liability arising before the transfer,
including, but not limited to, liability or obligations relating to warranties.
transfer and remains liable for warranty obligations imposed upon the
transferor by this Chapter. Lack of privity does not deprive any unit owner
of standing to bring maintain an action to enforce any obligation
of the transferor.
(2) If the successor to any special declarant right is an affiliate of a declarant (G.S. 47C‑1‑103(1)), the transferor is jointly and severally liable with the successor for any obligation or liability of the successor which relates to the condominium.
(3) If a transferor retains any special declarant right, but transfers other special declarant rights to a successor who is not an affiliate of the declarant, the transferor is liable for any obligations or liabilities imposed on a declarant by this chapter or by the declaration relating to the retained special declarant rights and arising after the transfer.
(4) A transferor has no liability for any act or omission or any breach of a contractual or warranty obligation arising from the exercise of a special declarant right by a successor declarant who is not an affiliate of the transferor.
(c) Unless otherwise
provided in a mortgage instrument or instrument, deed of trust, or
other agreement creating a security interest, in case of foreclosure of a mortgage,
security interest, sale by a trustee under an agreement creating a
security interest, tax sale, judicial sale, sale by a trustee under a
deed of trust, or sale under Bankruptcy Code or receivership proceedings,
of any units owned by a declarant, or real estate in a condominium subject to
development rights, or real estate subject to development rights for a
condominium, a person acquiring title to all the real estate property
being foreclosed or sold, but only upon his request, the person's
request in an instrument recorded with the register of deeds in every county
where any portion of the condominium is located, succeeds to all special
declarant rights (G.S. 47C‑1‑103(23)) related to that
real estate the property held by that declarant, or only to any
rights reserved in the declaration and held by that declarant to maintain
models, sales offices and signs. declarant and requested by the person
acquiring title. The judgment or instrument conveying title shall provide
for transfer of only the special declarant rights requested. The mortgage,
deed of trust, tax lien, or other conveyance to be foreclosed under this
subsection shall not be required to contain specific reference to an assignment
of special declarant rights but shall be deemed to include the special
declarant rights as part of the right, title, and interest encumbered by the
mortgage, deed of trust, tax lien, or other conveyance.
(d) Upon foreclosure,
tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under
Bankruptcy Code or receivership proceedings, of all units and other real estate
in a condominium owned by a declarant the declarant ceases to have any special
declarant rights.foreclosure of a security interest, sale by a trustee
under an agreement creating a security interest, tax sale, judicial sale, or
sale under Bankruptcy Code or receivership proceedings of all units and other
real estate in a condominium owned by a declarant, the declarant ceases to have
any special declarant rights and the period of declarant control (G.S. 47C‑3‑103(d))
terminates unless either of the following applies:
(1) The judgment or instrument conveying title provides for transfer of all special declarant rights held by that declarant to a successor declarant.
(2) The declarant transferred special declarant rights related to the appointment of executive board members to another person pursuant to this section prior to the foreclosure or sale.
(e) The liabilities and obligations of persons who succeed to special declarant rights are as follows:
(1) A successor to any
special declarant right who is an affiliate of a declarant is subject to all
obligations and liabilities imposed on the transferor related to the
condominium.by this Chapter or by the declaration.
(2) A successor to any
special declarant right, other than a successor described in paragraphs (3) and
(4) who is not an affiliate of a declarant, is subject to all obligations and
liabilities:Unless otherwise specified in the declaration as to the
holder of a mortgage instrument, deed of trust, or other agreement creating a
security interest, in case of foreclosure of a security interest, sale by a
trustee under an agreement creating a security interest, tax sale, judicial
sale, or sale under Bankruptcy Code or receivership proceedings, a successor to
any special declarant right who is not an affiliate of a declarant, other than
a successor described in subdivision (3) or (4) of this subsection, is subject
to the obligations and liabilities expressly imposed by this Chapter or the
declaration:
a. On a declarant which
relate to his the successor's exercise or nonexercise of special
declarant rights; or
b. On his the
declarant's transferor, other than:than any of the following:
(i)1. Misrepresentations
by the transferor or any prior declarant;previous declarant.
(ii)2. Warranty
obligations on improvements made by the transferor or any previous
declarant, or made before the condominium was created;created.
(iii)3. Breach of
any fiduciary obligation by the transferor or any previous declarant or his
the declarant's appointees to the executive board; orboard.
(iv)4. Any
liability or obligation imposed on the transferor or any previous declarant as
a result of the transferor's acts or omissions after the transfer.
5. Obligations and liabilities arising out of contractual agreements between the transferor or any previous declarant and third parties other than those contained in the declaration.
(3) A successor to only a
right reserved in the declaration to maintain models, management offices, sales
offices, and signs advertising the condominium (G.S. 47C‑2‑115),
if he the successor is not an affiliate of a declarant, may not
exercise any other special declarant right, and is not subject to any liability
or obligation as a declarant, except the obligation to provide a public
offering statement, and any liability arising as a result thereof.
(4) A successor to all
special declarant rights held by his a transferor who is not an
affiliate of that declarant and who succeeded to those rights pursuant to a
deed or other instrument of conveyance in lieu of foreclosure or a
judgment or instrument conveying title to units under subsection (c), (c)
of this section, may declare his intention in a recorded instrument the
intention to hold those rights solely for transfer to another person.
Thereafter, until transferring all special declarant rights to any person
acquiring title to any unit owned by the successor, or until recording an
instrument permitting exercise of all those rights rights, that
successor may not exercise any of those rights other than the right held by
his the successor's transferor to control the executive board in
accordance with the provisions of G.S. 47C‑3‑103(d) for the
duration of any period of declarant control, and any attempted exercise of
those rights is void. So long as a successor declarant may does not
have the right to exercise special declarant rights under this
subsection, he the successor declarant is not subject to any
liability or obligation as a declarant other than liability for his the
successor declarant's acts and omissions under G.S. 47C‑3‑103(d).
(f) Nothing in this section subjects any successor to a special declarant right to any claims against, or other obligations of, a transferor declarant other than claims and obligations expressly arising under this Chapter or the declaration.
(g) For the purposes of this section, "assignment of declarant rights" shall include any assignment by the declarant of special declarant rights to a person, including, without limitation, an assignment pursuant to this section."
SECTION 3. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 28th day of May, 2015.
s/ Daniel J. Forest
President of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Pat McCrory
Governor
Approved 8:30 a.m. this 4th day of June, 2015