Bulletin: NC2023002

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.

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