A BILL TO BE ENTITLED
AN ACT TO CLARIFY STATUTES OF LIMITATION AND REPOSE APPLICABLE TO ACTIONS BROUGHT AGAINST professional LAND SURVEYORS, and to make changes and technical corrections to the general statutes concerning real property law.
Whereas, the General Assembly has provided through the enactment of G.S. 1‑47(6) and G.S. 1‑52(18) two limitations periods for actions brought against a registered land surveyor as defined in G.S. 89C‑3(9) or a person acting under the surveyor's supervision and control for physical damage or for economic or monetary loss due to negligence or a deficiency in the performance of surveying or platting; and
Whereas, it was the intent of the General Assembly to establish a 3‑year statute of limitation under G.S. 1‑52(18) and a 10‑year statute of repose under G.S. 1‑47(6) for such actions; and
Whereas, the North Carolina courts have held that the limitations period under G.S. 1‑47(6) is more specific and provides a longer period of time than the limitations period under G.S. 1‑52(18); and, consequently, that the 10‑year limitation under G.S. 1‑47(6) applies to the exclusion of the 3‑year limitation under G.S. 1‑52(18); and
Whereas, such ruling by the North Carolina courts have rendered the 3‑year limitation under G.S. 1‑52(18) a nullity, contrary to the intent of the General Assembly; and
Whereas, the General Assembly wishes to amend the provisions of G.S. 1‑47 and G.S. 1‑52 to establish a 3‑year statute of limitation and 7‑year statute of repose for such causes of action; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 1‑47 reads as rewritten:
"§ 1‑47.  Ten years.
Within ten years an action –
…

	"
SECTION 2.  G.S. 1‑52(18) reads as rewritten:
"§ 1‑52.  Three years.
Within three years an action –
…
(18)	Against any professional land surveyor as defined in G.S. 89C‑3(9) or any person acting under the surveyor's supervision and control for physical damage or economic or monetary loss due to negligence or a deficiency in the performance of surveying or platting. A cause of action for physical damage under this subdivision shall be deemed to accrue at the time of the occurrence of the physical damage giving rise to the cause of action. All actions under this subdivision shall commence within seven years from the specific last act of the professional land surveyor or any person acting under the surveyor's supervision and control giving rise to the cause of action. For purposes of this subdivision, "surveying and platting" means boundary surveys, topographical surveys, surveys of property lines, and any other measurement or surveying of real property and the consequent graphic representation thereof."
SECTION 2.1.(a)  The General Statutes are amended by adding a new Chapter to read:
"Chapter 47I.
"Notice of Settlement Act.
"§ 47I‑1.  Short title.
This Chapter shall be known as the "Notice of Settlement Act."
"§ 47I‑2.  Purpose.
The purpose of this Chapter is to modernize the law governing the transfer of a legal or equitable title to real property, or interests therein, by providing advance notice of transactions and facilitating electronic closing of transactions, electronic recording of documents, and disbursement of funds in connection with the settlement of real property transactions. The use of this Chapter in a real estate transaction is optional, and failure to use the procedure authorized by this Chapter shall not constitute grounds for any claim for relief at law or equity, unless an express contract exists requiring its use. This Chapter creates an additional, nonexclusive procedure for registering a property interest in real property through the use of a notice of settlement, and establishing concurrently therewith priority in the property in a grantee of a conveyance or lease under G.S. 47‑18 or mortgagee under G.S. 47‑20 and for any other priority purposes based on registration in the public records from the time of filing of the notice of settlement.
"§ 47I‑3.  Definitions.
As used in this Chapter, unless the context requires otherwise, the following definitions apply:
(1)	Conveyance transaction. – A transaction involving a deed or lease from the current owner of record to a grantee. The term includes any mortgage financing to be secured by the real property at the settlement.
(2)	Current owner of record. – The person who holds of record the legal or equitable title to, or interest in, real property to be conveyed, leased, or mortgaged under this Chapter and as identified in the notice of settlement.
(3)	Deed. – Any instrument conveying a legal or equitable title to, or an interest in, real property for a purpose other than to secure an obligation or indebtedness. The term includes the legal or equitable title to, and any interest in, real property described in the instrument.
(4)	Discoverable online. – A document, instrument or other entry which, at the time of registration of the deed, lease, or mortgage is the subject of a notice of settlement, would be indexed and found online at the public Web sites maintained by the applicable register of deeds for the county in which the property is located, the Administrative Office of the Courts, the mechanics' online lien agent registry pursuant to G.S. 44A‑11.2(f)(7), and any other offices, other than birth, death, and notary records, which would be a part of the regular search of a title to property by a reasonable title examiner in this State for purposes of conveyance, lease, and mortgage of real property.
(5)	Grantee. – The person to whom a legal or equitable title to real property, or an interest therein, including leasehold interest, shall be conveyed pursuant to a settlement. The term includes a related assignee, including, but not limited to, a principal on behalf of the ultimate purchaser, a parent entity for a wholly owned special purpose entity purchaser, existing or to be formed, or their attorney; provided, however, that the assignee is designated in writing at or prior to the settlement by assignment from the person contracting to purchase the real property from the current owner of record. Priority of a grantee hereunder shall extend to those claiming by, through, or under them pursuant to G.S. 47‑18 and G.S. 47‑20.
(6)	Lease. – An agreement creating a leasehold interest in real property described in that agreement or in a memorandum describing that agreement.
(7)	Mortgage. – A mortgage, deed of trust, or other instrument conveying a legal or equitable interest in real property for purposes of obtaining a security interest therein as security for an underlying obligation or any ancillary security instrument, as defined in G.S. 45‑42.3(a), recorded therewith and related thereto and that includes the legal or equitable interest in real property described in the instrument.
(8)	Mortgage transaction. – A settlement transaction involving a mortgage from the current owner of record, encumbering the real property which is the subject of the notice of settlement. The term may include (i) a refinancing of an existing mortgage, (ii) a home equity loan, (iii) a line of credit, (iv) a construction loan, or (v) other financing to be secured by a mortgage on the real property. The term does not include a conveyance transaction as defined in this section.
(9)	Mortgagee. – The grantee, beneficiary, or secured party in the mortgage. The term includes the trustee under a deed of trust on their behalf.
(10)	Mortgagor. – The person executing a mortgage pursuant to a settlement.
(11)	Notice agent. – One of the following:
a.	An attorney licensed under Chapter 84 of the General Statutes who is representing any of the following:
1.	The current owner of record.
2.	The grantee in a conveyance transaction.
3.	The mortgagor in a mortgage transaction, by the current owner of record or their assignee.
4.	The title insurance company or agent insuring the real estate title that is subject to the settlement.
b.	The mortgagee for a mortgage transaction, duly authorized by the current owner of record or their agent to register a notice of settlement pursuant to this Chapter, where the mortgagee is handling the settlement and closing of the transaction, regardless of how funds are disbursed.
(12)	Person. – Any individual, firm, corporation, governmental unit or subdivision, or other legal entity that may hold a legal or equitable title to, or interest in, real property under the laws of this State.
(13)	Settlement. – The delivery of the instruments conveying a legal or equitable title to, or interest in, real property to the grantee or mortgagee for valuable consideration as agreed upon by the parties to the transaction.
(14)	Transaction documents. – A deed, lease, or mortgage and any other documents registered simultaneously with and as part of the settlement, or referenced in the deed, lease, or mortgage and related to the settlement, including any ancillary security instruments as provided in G.S. 45‑42.3.
"§ 47I‑4.  Instrument; designation; filing; index of notice of settlement.
(a)	The notice agent may register an instrument designated a "Notice of Settlement" in the office of the register of deeds of the county or counties in which the real property is situated with reference to a settlement that the notice agent in good faith reasonably believes will occur within 60 days of the registration.
(b)	A contract between the current owner of record and a grantee shall be conclusively deemed sufficient authority for the notice agent to register a notice of settlement, unless the contract specifically prohibits registration of a notice.
(c)	The notice of settlement shall be (i) indexed in the indexes provided for real estate conveyances, (ii) registered as a real estate instrument, and (iii) indexed in the name of the current owner of record identified in the notice of settlement and in the names of the parties as identified in the notice of settlement.
(d)	The applicable registration fee under G.S. 161‑10 shall be paid at the time the notice of settlement is registered.
"§ 47I‑5.  Signature; content; acknowledgment.
The notice of settlement shall contain at least all of the following:
(1)	The name, street address, and telephone number of the notice agent registering the notice of settlement.
(2)	The current owner of record.
(3)	The grantee, if a conveyance transaction.
(4)	The mortgagee, if a mortgage transaction.
(5)	Sufficient information to identify the real property based on the public records.
(6)	The date the notice of settlement will expire, not to exceed 60 days from the date of registration. If no date is provided, the notice shall expire 60 days after registration.
(7)	Execution by the notice agent.
(8)	Acknowledgment of the execution by the notice agent as required by law for the registration of instruments.
"§ 47I‑6.  Forms.
The form of the notice of settlement shall be substantially as follows:
"NOTICE OF SETTLEMENT
Notice Agent:_________________________
	Street address:________________________
	Telephone number:____________________
Current Owner(s) of Record:_______________________________
	Street address:________________________
	Telephone number:____________________
Grantee(s) (for Conveyance Transaction):_______________________
	Street address:________________________
	Telephone number:____________________
Mortgagee (for Mortgage Transaction):_________________________
	Officer:____________________________
	Street address:________________________
	Telephone number:____________________

NOTICE is hereby given pursuant to Chapter 47I of the North Carolina General Statutes of a settlement affecting title to the following described real property of the current owner of record.
The undersigned is duly authorized by the current owner of record (and their client, if different) to record this Notice of Settlement, and is:
	a North Carolina licensed attorney representing the current owner of record, the grantee, the mortgagor, or the title insurance company or agent insuring the real estate title related to the settlement, OR
	the mortgagee for a mortgage transaction by the current owner of record.

The property subject to this Notice of Settlement is:
[INSERT SUFFICIENT INFORMATION REGARDING THE PROPERTY FOR IT TO BE CLEARLY IDENTIFIED FROM THE PUBLIC RECORDS, SUCH AS LEGAL DESCRIPTION, VESTING DOCUMENT REFERENCE, STREET ADDRESS, AND/OR TAX MAP REFERENCES]

This Notice of Settlement shall be effective from the time of, and for _____ days [INSERT NUMBER OF DAYS, NOT TO EXCEED 60 DAYS], or if none stated, the term of this Notice of Settlement shall be 60 days, following the day of registration of this Notice of Settlement in the office of the register of deeds of the county in which the above real property is situated.

___________________________________________
Signature of Notice Agent

[NOTARIAL CERTIFICATE OF ACKNOWLEDGMENT IN COMPLIANCE WITH NORTH CAROLINA LAW]"
"§ 47I‑7.  Constructive notice; priority.
(a)	The registration of a notice of settlement shall be constructive notice of the anticipated settlement and interest of the grantee or mortgagee affecting the real property identified in the notice of settlement.
(b)	Subject to the provisions of subsection (c) of this section, the registration of the notice of settlement shall establish priority of title of the grantee or mortgagee under the deed, lease, or mortgage from the time of registration of the notice of settlement as against subsequent purchasers for value, lien creditors, and others claiming an interest in the real property identified in the notice of settlement through any person who holds the legal or equitable title to, or interest in, the real property and through chain of title of the current owner of record identified in the notice of settlement. Priority shall be determined as if the deed or lease to the grantee or mortgage to mortgagee had been registered at the time of the registration of the notice of settlement. A deed, lease, or mortgage delivered pursuant to the settlement for which the notice of settlement is duly registered in the county or counties where the real property is situated prior to expiration of the notice of settlement shall continue the priority of the grantee or mortgagee in the subject real property established by the notice of settlement and the priority of the grantee or mortgagee under the duly registered deed, lease, or mortgage shall be a continuously perfected property interest in the real property from the time of registration of the notice of settlement under this Chapter, against subsequent purchasers for value, lien creditors, and other persons claiming an interest in the real property through any person who holds of record the legal or equitable title to, or interest in, the real property.
(c)	A duly registered notice of settlement shall not affect the priority of any of the following:
(1)	The designation of a lien agent and the related notices to lien agent filed pursuant to Article 2 of Chapter 44A of the General Statutes for the subject real property and discoverable online at an internet Web site for that purpose pursuant to G.S. 44A‑1.2(f)(7) prior to registration of the deed, lease, or mortgage.
(2)	Potential claims for which no lien agent is required to be appointed under G.S. 44‑11.1(a).
(3)	Valid conveyances, liens, or encumbrances, other than transaction documents, upon the property duly registered with the register of deeds or filed with the clerk in the county or counties in which the real property is located and discoverable online at least five business days prior to registration of the deed, lease, or mortgage pursuant to this Chapter.
(4)	Any interest or claim regarding the real property by a claimant who is the beneficiary of any valid conveyance, lien, or encumbrance in the public record that attaches to the real property and is duly registered or filed in the public records of the county or counties in which the real property is located as required by law, and for which the claimant or their attorney has done all of the following:
a.	Delivered actual notice clearly identifying the recordation or filing information in the county or counties of their legitimate conveyance, lien, or encumbrance on the real property, the specific notice of settlement, the property, and the current owner of record to the notice agent at least five business days prior to the settlement.
b.	Obtained an acceptance of delivery identifying their valid conveyance, lien, or encumbrance, (i) identifying the notice of settlement by book and page of registration in the county or counties and the real property affected, (ii) signed by the claimant, including the name, address, and telephone number of the claimant, (iii) signed by the notice agent, and (iv) with notarial certificate regarding execution by each person signing, at least one business day prior to the registration of the deed, lease, or mortgage pursuant to the notice of settlement.
c.	Has registered the signed acceptance of delivery with the register of deeds of the county or counties in which the property is located at least one business day prior to the registration of the deed, lease, or mortgage pursuant to the notice of settlement.
Registration of a notice and acceptance of delivery shall be prima facie evidence that the notice and acceptance of delivery was delivered to the notice agent. If the notice agent is not the closing or settlement agent, upon request by the closing or settlement agent, the notice agent shall provide any notices received pursuant to this subsection.
(d)	Notwithstanding subsection (c) of this section, a closing attorney or settlement agent shall have authority to pay any potential liens upon the real property that is the subject of the notice of settlement or any liabilities of the current owner of record which may affect title and that are actually known to the closing attorney or settlement agent, in order to protect a purchaser, lessee, or mortgagee or comply with the terms of a contract of sale, lease, or mortgage.
(e)	Nothing in this section shall be deemed to relieve the current owner of record, mortgagor, or any other party of their personal liability for any legal or financial obligation.
(f)	If the named grantee or mortgagee in the notice of settlement differs from the grantee or mortgagee in the instrument registered pursuant to the settlement, the deed or mortgage registered pursuant to the settlement may bear a legend that is in a form and substance substantially as follows:

"This instrument was delivered at the settlement referred to in the Notice of Settlement by __________________ (Signatory of Notice of Settlement) recorded in Book _____, Page _____, ____________ County Registry, identifying the Grantee as [Name of Grantee] and Mortgagee [Name of Mortgagee] (as applicable)."

(g)	A statement signed by an attorney licensed under Chapter 84 of the General Statutes may be submitted for registration with the deed, lease, or mortgage that the attorney had updated the title examination for the real property on the applicable online registries for the public records as of a specified date and time after registration of the notice of settlement and prior to its expiration, identifying any further conveyances, liens, or encumbrances found online after registration of the notice of settlement and before registration of the transaction documents. The certification shall be prima facie evidence of the truth of the certification therein.
"§ 47I‑8.  Duration of notice; priority; number of filings; not renewable.
(a)	The notice of settlement shall be effective as provided in G.S. 47I‑7(a) from the time of registration and for the number of days stated in the notice of settlement, but no more than 60 days following the day of, registration of the notice of settlement pursuant to this Chapter. If the deed, lease, or mortgage delivered pursuant to a settlement for which the notice of settlement was registered has not been properly registered in the county or counties where the real property is situated prior to the expiration of the notice of settlement, the notice of settlement shall be void, and the priority of the grantee or mortgagee under the deed, lease, or mortgage registered subsequent to the expiration shall date from the time of registration of the deed, lease, or mortgage, and not from the time of the registration of the expired notice of settlement.
(b)	Except as provided in subsection (c) of this section, registered notice of settlement may not be amended, extended, or renewed.
(c)	For any particular transaction, an "Additional Notice of Settlement" may be registered after the initial notice of settlement. The "Additional Notice of Settlement" shall be as effective as a notice of settlement pursuant to G.S. 47I‑4, but only from the date and time of its registration and subject to the terms of this Chapter as if the original notice of settlement had not been registered. An "Additional Notice of Settlement" shall be registered and indexed as a "subsequent instrument" pursuant to the provisions of G.S. 161‑14.1. Only one "Additional Notice of Settlement" may be registered for any single notice of settlement.
"§ 47I‑9.  Early termination of notice of settlement.
The notice agent may terminate the notice of settlement by filing a notice of termination in a form substantially as follows:
"TERMINATION OF NOTICE OF SETTLEMENT
Current Owner(s) of Record: _______________________________
Grantee(s) (for Conveyance Transaction): ____________________________________
Mortgagee(s) (for Mortgage Transaction): ____________________________________
Notice Agent: ____________________________________

NOTICE is hereby given pursuant to Chapter 47I of the North Carolina 
General Statutes that the Notice of Settlement filed by the undersigned _________________ (date or recording information) is hereby terminated.
_______________________________
Signature of Notice Agent

[NOTARIAL CERTIFICATE OF ACKNOWLEDGMENT IN COMPLIANCE WITH NORTH CAROLINA LAW]"

A notice of termination shall be registered and indexed as a "subsequent instrument" pursuant to the provisions of G.S. 161‑14.1.
"§ 47I‑10.  Severability.
If any provision of this Chapter or the application thereof to any person or circumstance is held invalid, that invalidity shall not affect other provisions or applications of this Chapter which can be given effect without the invalid provision or application, and to that end, the provisions of this Chapter are severable."
SECTION 2.1.(b)  G.S. 47‑18 reads as rewritten:
"§ 47‑18.  Conveyances, contracts to convey, options and leases of land.
(a)	No (i) conveyance of land, or (ii) contract to convey, or (iii) option to convey, or (iv) lease of land for more than three years shall be valid to pass any property interest as against lien creditors or purchasers for a valuable consideration from the donor, bargainer or lesser but from the time of registration thereof in the county where the land lies, or if the land is located in more than one county, then in each county where any portion of the land lies to be effective as to the land in that county. Unless otherwise stated either on the registered instrument or on a separate registered instrument duly executed by the party whose priority interest is adversely affected, (i) instruments registered in the office of the register of deeds shall have priority based on the order of registration as determined by the time of registration, and (ii) if instruments are registered simultaneously, then the instruments shall be presumed to have priority as determined by:
(1)	The earliest document number set forth on the  registered instrument.
(2)	The sequential book and page number set forth on the registered instrument if no document number is set forth on the registered instrument.
The presumption created by this subsection is rebuttable.
…
(c)	Notwithstanding any provision in subsection (a) of this section to the contrary, the priority of conveyances of land and leases is subject to the priority established under a notice of settlement registered in compliance with the provisions of Chapter 47I of the General Statutes."
SECTION 2.1.(c)  G.S. 47‑20 reads as rewritten:
"§ 47‑20.  Deeds of trust, mortgages, conditional sales contracts, assignments of leases and rents; effect of registration.
(a)	No deed of trust or mortgage of real or personal property, or of a leasehold interest or other chattel real, or conditional sales contract of personal property in which the title is retained by the vendor, shall be valid to pass any property as against lien creditors or purchasers for a valuable consideration from the grantor, mortgagor or conditional sales vendee, but from the time of registration thereof as provided in this Article, or according to priority established pursuant to compliance with the provisions of Chapter 47I of the General Statutes, provided however that any transaction subject to the provisions of the Uniform Commercial Code (Chapter 25 of the General Statutes) is controlled by the provisions of that act and not by this section. Unless otherwise stated either on the registered instrument or on a separate registered instrument duly executed by the party whose priority interest is adversely affected, (i) instruments registered in the office of the register of deeds shall have priority based on the order of registration as determined by the time of  registration, and (ii) if instruments are registered simultaneously, then the instruments shall be presumed  to have priority as determined by:
(1)	The earliest document number set forth on the  registered instrument.
(2)	The sequential book and page number set forth on the registered instrument if no document number is set forth on the registered instrument.
The presumption created by this subsection is rebuttable.
…."
SECTION 2.1.(d)  G.S. 161‑14.1 reads as rewritten:
"§ 161‑14.1.  Recording subsequent entries as separate instruments.
(a)	As used in this section, the following terms mean:
(1)	Original instrument. – The previously recorded instrument that is modified, amended, restated, supplemented, assigned, satisfied, terminated, revoked, or cancelled by a subsequent instrument.
(2)	Recording data. – The book and page number or document number that indicates where an instrument is recorded in the office of the register of deeds.
(3)	Subsequent instrument. – Any instrument presented for registration that indicates in its title or within the first two pages of its text that it is intended or purports to modify, amend, restate, supplement, assign, satisfy, terminate, revoke, or cancel a previously registered instrument. Examples of subsequent instruments include the following:
a.	The appointment or designation of a substitute trustee in a deed of trust.
…
t.	An additional notice of settlement pursuant to G.S. 47I‑8(c).
u.	A termination of notice of settlement pursuant to G.S. 47I‑9.
…."
SECTION 2.1.(e)  Sections 2.1(a) through 2.1(e) of this act become effective January 1, 2020, and apply to notices of settlement registered on or after that date.
SECTION 2.2.(a)  Section 4.1 of S.L. 2018‑80 reads as rewritten:
"SECTION 4.1.  Sections 1.2 and 1.3 of this act become effective October 1, 2018, and apply to instruments presented for registration on or after that date. Section 3.1 of this act becomes effective October 1, 2018. Section 2.1 of this act becomes effective when this act becomes law and applies to deeds and deeds of trust presented for registration on or after that date. Section 2.2 of this act becomes effective when this act becomes law and applies to all instruments entered into before, on, or after that date. The remainder of this act is effective when this act becomes law and applies to mortgages and deeds of trust entered into before, on, or after that date."
SECTION 2.2.(b)  G.S. 47‑17.1 reads as rewritten:
"§ 47‑17.1.  Documents registered or ordered to be registered in certain counties to designate draftsman; exceptions.
The register of deeds of any county in North Carolina shall not accept for registration, nor shall any judge order registration pursuant to G.S. 47‑14, of any deeds or deeds of trust, executed after January 1, 1980, unless the first page of the deeds or deeds of trust bears an entry showing the name of the drafter of the deed or deed of trust. The register of deeds shall not be required to verify or make inquiry concerning the capacity or authority of the person or entity shown as the drafter on the instrument."
SECTION 3.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part declared to be unconstitutional or invalid.
SECTION 4.  Sections 1 and 2 are effective when this act becomes law and apply to actions arising on or after that date. Unless otherwise provided, the remainder of this act is effective when it becomes law.