As previously announced, NC HB 852 (2017) was recently passed which (inter alia) amends N.C. Gen. Stat. Ann. § 47-17.1 to state the following:
“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 either the person or law firm who drafted the instrument. This section shall not apply to other instruments presented for registration. For the purposes of this section, the register of deeds shall accept the written representation of the individual presenting the deed or deed of trust for registration, or any individual reasonably related to the transaction, including, but not limited to, any employee of a title insurance company or agency purporting to be involved with the transaction, that the individual or law firm listed on the first page is a validly licensed attorney or validly existing law firm in this State or another jurisdiction within the United States.”
We have contacted several recording offices in North Carolina about this provision, to determine whether they will require a separate written instrument to be submitted with deeds of trust representing that the person listed under “Prepared By” on the first page of the deed of trust is a licensed attorney or law firm. The feedback has been mixed, but a couple of counties have indicated that they may require a separate instrument if the name of the preparer does not inherently indicate whether the preparer is a licensed attorney or law firm.
To fulfill these requirements, we will be providing a new “NC Prepared by Certification” (Cx22402). In this document, the signer declares that the signer has both knowledge of the drafting of the deed of trust (as part of their employment), and that the person listed as the preparer is a licensed attorney or law firm.
Please note that in North Carolina, a licensed attorney or law firm is required to prepare a deed of trust, pursuant to N.C. Gen. Stat. Ann. § 84-2.1, except in certain circumstances, particularly when “a person [has] a primary interest, not merely an incidental interest, in a transaction” (see State v. Pledger, 257 N.C. 634, 637 ). This can include “lending institutions preparing a deed of trust and chattel mortgages” (Ibid.)
This being the case, it is possible for someone other than a licensed attorney or law firm to be listed as the preparer; therefore, Cx22402 will only be an “upon request” document, which clients can have assigned to them, if it is their practice to use an attorney in preparing the deed of trust. Once assigned, it will print by default under the following conditions:
- Document Package Type = Closing
- State Code = North Carolina
This new document is now available for request. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.