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On January 1, 2015, two real estate laws went into effect in North Carolina.
Here’s what you need to know:
The Residential Property Disclosure Act
Under the Regulatory Reform Act of 2014, the Residential Property Disclosure Act went into effect on January 1, 2015, requiring all sellers of new and existing homes to disclose upfront and in writing whether the mineral, oil and gas rights for the property in question are owned by someone other than the seller. While this disclosure has been required at the time of sale for years, the purpose of this new law is to ensure that potential buyers are informed of these rights well before ever making an offer on a home or property. Much like the other mandatory disclosures, a property owner may indicate whether the owner actually has any knowledge of the rights, or the owner may make no representation “only as to a previous severance of mineral rights and previous severance of oil and gas rights.”
Additional Tenants by the Entireties Protection
In North Carolina, spouses who own real property through a “tenancy by the entireties” form of ownership are given special protection from each other’s creditors. This means only a joint creditor (a creditor of both spouses) may obtain a lien on real estate owned by tenancy by the entireties. The extra protection tenancy by the entireties provides is commonly referred to as “spousal immunity.” Effective January 1, 2015, the same spousal immunity protection now applies when spouses transfer real estate they currently own as tenancy by the entireties to a trust, so long as two conditions are met: the spouses must (1) remain married to each other and (2) remain the beneficial owners of the property under the trust. Similarly to real property owned by tenancy by the entireties, spousal immunity would not apply to the trust in cases involving a joint creditor.
If you have any questions or would like additional information on this topic, please contact attorney Lauren Reeves at 919.250.2126 or by email at lreeves@smithdebnamlaw.com.
Lauren Reeves is a partner inside Smith Debnam's real estate, foreclosure, and creditors' rights sections. She represents lenders, individuals, and businesses in real estate matters, including real estate closings, purchasing, leasing, selling, financing and all issues of title arising in both residential and commercial real estate transactions....LEARN MORE
