Bulletin: NC2023002

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Bulletin: NC2023002

Bulletin Document
V 4
Date: September 06, 2023
To: All North Carolina Issuing Offices
RE: UNDERWRITING - Unfair Real Estate Service Agreements

Dear Associates:

On August 24, 2023, the Governor of North Carolina signed into law a new article of Chapter 93A of the North Carolina General Statutes that prospectively voids any “unfair real estate service agreements” for residential real estate. The new article can be found here: https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H422v6.pdf  This new article is effective as to all unfair real estate service agreements that are executed, modified, extended, or amended after August 24, 2023.

93A-85.2 states that a real estate service agreement is unfair, void, and in violation of the new law if it is effective for more than one year and either expressly or implicitly aims to do any of the following:

  1. Run with the land or bind future owners of residential real estate identified in the real estate service agreement;
  2. Allow for assignment of the right to provide services without notice or consent of the owner or buyer; or
  3. Create a lien, encumbrance, or other real property security interest.

93A-85.3(a) states that recording an unfair real estate service agreement is prohibited but, if one is recorded, the recording is void. Under subsection (b) any void recording shall not operate as a lien, encumbrance, or security interest nor shall any owner or buyer be required to record any document voiding the recording.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.


References

Bulletins Replaced:
  • None
Related Bulletins:
  • None
Underwriting Manual:
  • None
Exceptions Manual:
  • None
Forms:
  • None