A BILL TO BE ENTITLED
AN ACT Amending the homeowner and homebuyer protection act.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 47G‑1 reads as rewritten:
"§ 47G‑1.  Definitions.
The following definitions apply in this Chapter:
(1)	Covered lease agreement. – A residential lease agreement  in which all or some portion of the rental payments made are applied to the purchase price of the real property which is the subject of the covered lease agreement and the covered option contract.…
(4)	Option contract or contract. – An option contract for the purchase of property that includes or is combined with, or is executed in conjunction with, a covered lease agreement. The term does not include a contract which obligates the buyer to purchase the property even though the obligation may be subject to one or more contingencies or unilateral rights to terminate the contract.
(5)	Option fee. – Any payment, however denominated, made by the option purchaser to the option seller that constitutes the price the option purchaser pays for the right to buy the property at a specified price in the future. Such payment applied at the closing of the property shall not constitute equity, and such payment shall not in and of itself create a right of equitable redemption.
…."
SECTION 2.  G.S. 47G‑7 reads as rewritten:
"§ 47G‑7.  Remedies.
An option purchaser may bring an action for the recovery of damages, to void a transaction executed in violation of this Chapter, as well as for declaratory or equitable relief for a violation of this Chapter. The rights and remedies provided herein are cumulative to, and not a limitation of, any other rights and remedies provided by law or equity. Nothing in this Chapter shall be construed to subject an individual homeowner selling his or her primary residence directly to an option purchaser to liability under G.S. 75‑1.1."
SECTION 3.  G.S. 47H‑2 reads as rewritten:
"§ 47H‑2.  Minimum contents for contracts for deed; recordation.
…
(b)	Contents. – A contract for deed contract shall contain at least all of the following:
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(14a)	A completed residential property disclosure statement as provided in Chapter 47E of the General Statutes.
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…."
SECTION 4.  G.S. 47H‑6 reads as rewritten:
"§ 47H‑6.  Title requirements.
(a)	A seller may not execute a contract for deed with a purchaser if the seller does not hold title to the property. If the title is not held in fee simple, free from any deeds of trust, mortgages, or other encumbrances evidencing or securing a monetary obligation which constitutes a lien on the property, the seller may execute a contract for deed only if the mortgage or encumbrance is in the name of the seller and meets at least one of the following conditions:
…
(3)	It was placed on the property by the seller prior to the execution of the contract for deed, if the seller is not a licensed general contractor within the meaning of Chapter 87 of the General Statutes, a licensed manufactured home dealer within the meaning of Article 9A of Chapter 143 of the General Statutes, or a licensed real estate broker within the meaning of Chapter 93A of the General Statutes, and the seller continues to make timely payments on the outstanding mortgage or  encumbrances and notifies the purchaser in a separate written disclosure, provided at or before the execution of the contract, in 14‑point type, boldface, capital letters, the following statement: THIS PROPERTY HAS EXISTING LIENS ON IT. IF THE SELLER FAILS TO MAKE TIMELY PAYMENTS TO THE LIEN HOLDER, THE LIEN HOLDER MAY FORECLOSE ON THE PROPERTY, EVEN IF YOU HAVE MADE ALL YOUR PAYMENTS.
	
…."
SECTION 5.  G.S. 47H‑8 reads as rewritten:
"§ 47H‑8.  Remedies.
A purchaser may bring an action for the recovery of damages, to rescind a transaction, as well as for declaratory or equitable relief, for a violation of this Chapter. The rights and remedies provided herein are cumulative to, and not a limitation of, any other rights and remedies provided by law or equity. Nothing in this Chapter shall be construed to subject an individual homeowner selling his or her primary residence directly to a buyer to liability under G.S. 75‑1.1."
SECTION 6.  G.S. 75‑120 reads as rewritten:
"§ 75‑120.  Definitions.
The following definitions shall apply in this Article:
(1)	Default. – Whenever a notice of default is filed in the county where the property is located on any loan or debt that is secured by the property, including real estate taxes.
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(3)	Foreclosure rescue transaction. – A transfer of residential real property, including a manufactured home that is permanently attached to the real property, which includes all of the following features:
a.	The real property is the principal residence of the transferor.
b.	The transferor is in default or legal proceedings have been initiated to foreclose on the transferor's property.
c.	The transferee, an agent of the transferee, or others acting in concert with the transferee make representations that the transfer of the residential property will enable the transferor to prevent, postpone, or reverse the effect of foreclosure and to remain in the residence.
d.	The transferor retains  a tenancy interest, an interest under a lease with option to purchase agreement, or an option to reacquire the property.
…."
SECTION 7.  G.S. 75‑121 reads as rewritten:
"§ 75‑121.  Foreclosure rescue transactions prohibited; exceptions; violation.
(a)	It is unlawful for a person or entity other than the transferor to engage in, promise to engage in, arrange, offer, promote, solicit, assist with, or carry out a foreclosure rescue transaction for financial gain or with the expectation of financial gain, unless prior to or at the time of transfer, the transferee pays the transferor at least fifty percent (50%) of the fair market value of the property as determined by a licensed appraiser. An appraisal to determine the fair market value of the property must be performed no more than 90 days prior to the transfer. 
…."
SECTION 8.  This act becomes effective October 1, 2013, and applies to transactions entered on or after that date.