New Real Estate Laws in 2016
A Host of New North Carolina Laws Impacts Developers and Individual Property Owners Alike.
In 2015, the North Carolina General Assembly was very busy passing laws
that affect real estate in many different aspects. Presented
below are brief summaries of some of the more far-reaching of the new
laws.
Builder’s Inventory Tax Exception
Prior to this law, which became effective in
2016, when a developer created a new subdivision, the tax assessor would
assign tax values to all of the lots created, and this assessment would
invariably increase the developer’s tax bill while he or she was trying
to sell the lot inventory. This law allows a developer to apply
for a tax exemption to exclude the increase in tax value attributed to
the subdivision process, the construction of improvements other than
buildings (such as roads and other subdivision infrastructure), or the
construction of a new single-family residence or duplex or than for a
model home, i.e. a home built for sale. The exemption cannot last
more than three years, and the developer must apply for it every year
during the listing period of January.
Repeal of Zoning Protest Petitions
A former zoning law contained a procedure
through which neighbors who would be affected by a local government
re-zoning could file a “protest petition” against the proposed re-zoning
that would trigger a super-majority vote by the governing body to
approve the re-zoning. Under the new law, protest petitions are no
longer allowed. Instead, opponents can submit written “citizen
comments” that are provided to the governing body, but such comments do
not trigger a higher vote threshold.
City Retention of Easements
Cities have always had a mechanism to close
streets or alleys that are no longer necessary or that, perhaps, were
never even opened and used. Such closures were absolute allowing
no continued public use. Now, legislation allows a city to reserve
easements for utilities, drainage, pedestrian access, landscaping,
conservation, or other uses in the public interest.
Requirement for Building Permit
This new law raised from $5,000 to $15,000 the
cost of construction level triggering the requirement for a building
permit for repair or replacement of a single-family residence or farm
building. There are exceptions where a permit is still required if
the repair is under $15,000 for such things as work on load bearing
structures, plumbing, HVAC, electrical additions, changes to design, or
roofing additions.
Real Estate License Requirements
There has long existed an exemption to real
estate license requirements for a business selling real estate owned by
that business. Under new rules, the managers, officers, partners,
and employees of an exempt business are also exempt from licensing
requirements. Any person coming under this exception must now
disclose to all parties to the transaction that the person is not a
licensed broker, the exemption permitting him or her to be unlicensed,
and the legal name and physical address of the business entity owning
the property.
Living Probate
This new law allows an individual to have a
will declared valid and non-revocable while the person is still
alive. The person must be a resident of North Carolina who has
executed a will. There must be a hearing before the Clerk of Court
to prove the will would be admitted to probate as valid if the person
making the will were deceased. All parties to the hearing are
bound by its result. The order can state that the will cannot be
revoked until a new will is brought in for a later hearing to declare it
valid. No party participating in the hearing will be allowed to
file a challenge to the validity of the will after the person making the
will dies. This may be a little needed procedure, but it could
help with eliminating expected challenges.
Protection of Private Property
The General Assembly created a new right to sue
for recovery of damages for interference with real property. This
right to sue is not a criminal law and is an additional remedy beyond
regular trespass law. The protection is against acts that “exceed
the person’s authority to enter” areas of another’s property.
Examples include an employee entering part of the employer’s premises to
remove data or records for use contrary to the interests of the
employer, an employee entering an area to record images or sound for use
contrary to the interests of the employer, the placement of an
unattended camera or recording device, and a few others. The
damages to be awarded include compensation for the loss, court costs,
attorneys’ fees, and exemplary per day damages.
Foreclosure Purchases
Under the former law, a purchaser at a
foreclosure sale could evict any tenant of the property in as little as
ten days. Now, unless the purchaser is going to occupy a purchased
single-family residence as his or her primary residence, the tenant can
remain for the shorter of the end of the current lease or one
year. The tenant cannot be the debtor in the foreclosure or a
member of the debtor’s family, and the lease must be in writing, not
terminable at will, and for a fair market rent.
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