Probate Modifications

Session Law 2012-68, House Bill 1066, Senate Bill 846

This act clarifies the necessity of probate to pass title to property of a decedent and that filing is required in the County where the land lies in order for the devisees to be protected as against creditors and purchasers for value from the heirs. It is effective October 1, 2012, and applies to estates of decedents dying on or after that date. It is important to be cognizant of the exception in the protection afforded innocent purchasers for value from the heirs. A timely probated will can divest such a purchaser if it is "probated or offered for probate before the earlier of (i) the date of the approval by the clerk of the superior court having jurisdiction of the decedent's estate of the final account filed by the personal representative of the decedent's estate, or (ii) the date that is two years from the date of death of the decedent."

SECTION 1. G.S. 28A-2A-1 reads as rewritten:

" § 28A-2A-1. Executor may apply for probate.

Any executor named in a will may, at any time after the death of the testator, apply to the clerk of the superior court, having jurisdiction, to have the will admitted to probate.

SECTION 2. G.S. 31-39 reads as rewritten:

" § 31-39. Probate necessary to pass title; rights of lien creditors and purchasers; recordation in county where real property lies.

(a) A duly probated will is effective to pass title to real and personal property.

(b) A will is not effective to pass title to real or personal property as against lien creditors or purchasers for valuable consideration from the intestate heirs at law of a decedent, unless the will is probated or offered for probate before the earlier of (i) the date of the approval by the clerk of the superior court having jurisdiction of the decedent's estate of the final account filed by the personal representative of the decedent's estate, or (ii) the date that is two years from the date of death of the decedent. If the will is fraudulently suppressed, stolen, or destroyed, or is lost, and an action or proceeding is instituted within the time limitation set forth in this subsection to obtain that will or establish that will as provided by law, the time limitation under this subsection begins to run from the termination of that action or proceeding.

(c) A will duly probated in one county of this State is not effective to pass title to an interest in real property located in any other county of this State as against lien creditors or purchasers for valuable consideration from the intestate heirs at law of a decedent unless a certified copy of the will is filed in the office of the clerk of superior court in the county where the real property lies within the time limitation set forth in subsection (b) of this section.

(d) A conveyance made by the intestate heirs at law of a decedent before the expiration of the time limitation set forth in subsection (b) of this section shall, upon the expiration of that time, become effective to the same extent as if the conveyance were made after the expiration of that time, unless before the expiration of that time, a proceeding is instituted in the proper court to probate a will of the decedent."

"Devise" and "Devisee" Defined

Session Law 2011-284, Senate Bill 252

This Act statutorily defines "devise" as set forth in Chapter 28A of the general statutes and applies the use of the term consistently throughout the general statutes. It does so by making technical changes to those sections of the general statutes affected by this act. The legislation eliminates the use of the various forms of the words 'Legatee' and 'Bequest', as well as making numerous gender neutral text modifications. The amendments became effective June 24, 2011.

N.C.G.S. Section 28A-1-1. Definitions.

As used in this Chapter, unless the context otherwise requires, the term:

(1a) "Devisee" means any person entitled to take real or personal property under the provisions of a valid, probated will.

PART I. DEFINE "DEVISE" AND "DEVISEE" IN CHAPTER 12.

SECTION 1. § 12-3 reads as rewritten:

" § 12-3. Rules for construction of statutes.

In the construction of all statutes the following rules shall be observed, unless such construction would be inconsistent with the manifest intent of the General Assembly, or repugnant to the context of the same statute, that is to say:

...

(14) "Devisee" and "Devise". - The word "devisee," wherever used in any of the statutes, shall be construed to mean "devisee" as defined in N.C.G.S. Section 28A-1-1. The word "devise," wherever used in any of the statutes as a noun, shall be construed to mean a testamentary disposition of real or personal property and, wherever used in any of the statutes as a verb, shall be construed to mean to dispose of real or personal property by will

PART II. UNIFORM USAGE; CLARIFYING AND TECHNICAL AMENDMENTS.

Affected statutes:

G.S. 1-255, G.S. 1-313 G.S. 1-339.23(a), G.S. 1A-1, Rule 27 G.S. 1C-1604(b), G.S. 7A-498.6(b) G.S. 11-11 G.S. 14-315(a1) G.S. 14-401.12(b) G.S. 15A-1465(a) G.S. 15A-1466 G.S. 18B-701(a) G.S. 20-77(b) G.S. 28A-13-4 G.S. 28A-18-2(a) G.S. 28A-22-5 G.S. 28A-22-6 G.S. 52-1 G.S. 55A-11-07 G.S. 58-10-5 G.S. 55A-11-10(g) G.S. 58-58-205 G.S. 58-58-300 G.S. 58-78-5(a) G.S. 59B-5 G.S. 64-4 G.S. 78A-2 G.S. 88A-8 G.S. 90-171.26 G.S. 90-210.121 G.S. 90-526(b) G.S. 90A-75(b) G.S. 90C-26 G.S. 98-6 G.S. 105-239.1(a) G.S. 105-278.6A(c) G.S. 105-306(c) G.S. 106-6.2 G.S. 106-568.17 G.S. 113-36(c) G.S. 113-36(d) G.S. 113A-153(e) G.S. 115C-410 G.S. 115C-490

G.S. 28A-22-7 G.S. 28A-23-3(b), G.S. 28A-27-5(a) G.S. 28A-27-5(d) G.S. 29-30(c1), G.S. 30-23 G.S. 30-28 G.S. 30-32 G.S. 31-3.2 G.S. 31-13 G.S. 31-14 G.S. 31-16 G.S. 31-18.4 G.S. 31-30 G.S. 31-33 G.S. 31-40 G.S. 31-43 G.S. 115C-491 G.S. 115C-492 G.S. 115C-493 G.S. 115C-494 G.S. 115D-20 G.S. 116-36(d) G.S. 116-36(f) G.S. 116-36(j) G.S. 116-36.1(g) G.S. 116-37.2(a) G.S. 121-4 G.S. 121-9(b) G.S. 125-2 G.S. 130A-470(b) G.S. 131E-177 G.S. 139-8(a) G.S. 143-323(a) G.S. 143-407 G.S. 143-437 G.S. 143-641(a) G.S. 143-676(a) G.S. 143B-74.1 G.S. 143B-131.2(b) G.S. 143B-131.8(a) G.S. 143B-216.33(c) G.S. 143B-472.123(a) G.S. 143B-476(a)

G.S. 32A-2 G.S. 35A-1227(b) G.S. 35A-1336.1 G.S. 35A-1341 G.S. 35A-1341.1 G.S. 35A-1342 G.S. 35A-1351, G.S. 35A-1352 G.S. 36C-4-401 G.S. 36D-4(h) G.S. 36D-4(i) G.S. 37A-1-102 G.S. 37A-2-201 G.S. 41-6.2(a) G.S. 41-11.1(a) G.S. 41-11.1(n), (o), (p) G.S. 50-20(b), G.S. 143B-499.7(f) G.S. 147-54.6(b) G.S. 153A-11 G.S. 153A-158 G.S. 153A-263 G.S. 153A-269 G.S. 157-9(a) G.S. 160A-11 G.S. 160A-163(b) G.S. 160A-240.1 G.S. 160A-347(a) G.S. 160A-349.12 G.S. 160A-353 G.S. 160A-401 G.S. 160A-402 G.S. 160A-403 G.S. 160A-479.13 G.S. 160A-512 G.S. 160A-619(a) G.S. 160A-649(a) G.S. 160A-674(a) G.S. 162A-88 G.S. 165-31 G.S. 165-39 G.S. 165-48(b) G.S. 165-49(b)

Technical Amendments

Senate Bill 847 (Ratified, not signed)

Section 12 of this bill incorporates non-substantive technical corrections to N.C.G.S. Section 28A-2-4(a) at the request of the General Statutes Commission

Section 13(a) makes non-substantive technical revisions to N.C.G.S. Section 28A-5-1(b).

Section 13(b) makes non-substantive technical revisions to N.C.G.S. Section 28A-5-2(b).

Section 15 amends N.C.G.S. Section 44A-24.2 to refine the definition of Commercial real estate as applied broker's liens.

Changes to the Laws Governing Trusts and Decedents' Estates

Session Law 2012-18, House Bill 707

This legislation is intended to clarify the laws with respect to persons holding a power to direct trustees, trust protectors, and directed trustees and other fiduciaries and makes further technical changes in the laws governing trusts and decedents' estates. The changes in Part III, primarily limit the liability of fiduciaries that have limited authority from liability for acts of cotrustees that have greater discretionary authority and introduces new sections that define the fiduciary responsibility in limitations of a party called a "power holder" who has the right to direct a trustee

SECTION 3.1. G.S. 36C-8-808 reads as rewritten:

" § 36C-8-808. Powers of a settlor to take certain actions with respect to the trust.

(a) While a trust is revocable, the settlor of a revocable trust has, at all times, the power to direct or consent to the actions of the trustee whether or not the power is conferred upon the settlor by the terms of the trust. The duty and liability of the trustee subject to the direction and consent of the settlor is as follows:

(1) The trustee may follow a direction of the settlor that is not authorized by or is contrary to the terms of the trust, even if by doing so (i) the trustee exceeds the authority granted to the trustee under the terms of the trust, or (ii) the trustee would otherwise violate a duty the trustee owes under the trust.

(2) The trustee is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from compliance with the direction. If the settlor requires the settlor's consent to certain actions of the trustee, and the settlor does not provide consent within a reasonable time after the trustee has made a timely request for the settlor's consent, the trustee is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from the trustee's failure to take any action that required the settlor's consent.

SECTION 3.2. G.S. 36C-7-703 is amended by adding the following new subsection to read:

"§ 36C-7-703. Cotrustees.

...

(e1) If the terms of a trust confer upon a cotrustee, to the exclusion of another cotrustee, the power to take certain actions with respect to the trust, including the power to direct or prevent certain actions of the trustees, the following apply:

(1) The duty and liability of the excluded trustee is as follows:

a. If the terms of a trust confer upon the cotrustee the power to direct certain actions of the excluded trustee, the excluded trustee must act in accordance with the direction and is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from compliance with the direction unless compliance with the direction constitutes intentional misconduct on the part of the directed cotrustee.

b. If the terms of the trust confer upon the cotrustee any other power, the excluded trustee is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from the action taken by the cotrustee.

c. The excluded trustee has no duty to monitor the conduct of the cotrustee, provide advice to the cotrustee, or consult with or request directions from the cotrustee. The excluded trustee is not required to give notice to any beneficiary of any action taken or not taken by the cotrustee whether or not the excluded trustee agrees with the result.

Administrative actions taken by the excluded trustee for the purpose of implementing directions of the cotrustee, including confirming that the directions of the cotrustee have been carried out, do not constitute monitoring of the cotrustee nor do they constitute participation in decisions within the scope of the cotrustee's authority.

(2) Except as otherwise provided in sub-subdivision a. of subdivision (1) of this subsection, the cotrustee holding the power to take certain actions with respect to the trust shall be liable to the beneficiaries with respect to the exercise of the power as if the excluded trustee were not in office and has the exclusive obligation to account to the beneficiaries and defend any action brought by the beneficiaries with respect to the exercise of the power."

SECTION 3.3. G.S. 32-72(d) reads as rewritten:

" § 32-72. Terms of creating instrument.

...

(d) The following provisions apply to an instrument creating a fiduciary relationship other than a trust instrument to which Chapter 36C of the General Statutes applies and to a fiduciary other than a trustee:

(1) The terms of the instrument may confer upon a person the power to direct or consent to certain actions of the fiduciary with respect to the following:

a. Investments, including retention, purchase, sale, exchange, or other transaction affecting the ownership of investments with respect to all or any one or more assets.

b. Any other administrative matter.

(2) When the terms of the instrument confer upon a person the power to direct or consent to certain actions of the fiduciary, the duty and liability of the fiduciary are as follows:

a. If the terms of the instrument confer upon the person the power to direct certain actions of the fiduciary, the fiduciary must act in accordance with the direction and is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from compliance with the direction unless compliance with the direction constitutes intentional misconduct on the part of the fiduciary.

b. If the terms of the instrument confer upon a person the power to consent to certain actions of the fiduciary, and the power holder does not provide consent within a reasonable time after the fiduciary has made a timely request for the power holder's consent, the fiduciary is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from the fiduciary's failure to take any action that required the power holder's consent.

c. The fiduciary has no duty to monitor the conduct of the power holder, provide advice to the power holder, or consult with the power holder. The fiduciary is not required to give notice to any beneficiary of any action taken or not taken by the power holder whether or not the fiduciary agrees with the result. Administrative actions taken by the fiduciary for the purpose of implementing directions of the power holder, including confirming that the directions of the power holder have been carried out, do not constitute monitoring of the power holder or other participation in decisions within the scope of the power holder's authority.

(3) A person who holds a power to direct or consent is a fiduciary who, as such, is required to act in good faith with regard to the purposes of the estate, or other relationship between the fiduciary and beneficiaries, and the interests of the beneficiaries, except that if a beneficiary is a person with a power to direct or consent, the beneficiary is not a fiduciary with respect to the following:

a. A power that constitutes a power of appointment.

b. A power the exercise or nonexercise of which affects only the interests of the beneficiary holding the power and no other beneficiary.

The holder of the power to direct or consent is liable for any loss that results from breach of a fiduciary duty occurring as a result of the exercise or nonexercise of the power.

 

SECTION 3.4. Chapter 36C of the General Statutes is amended by adding a new Article to read:

"Article 8A.

"Powers, Duties, and Liability of a Power Holder Other Than a Trustee;

Duty and Liability of a Trustee With Respect to Power Holder's Actions.

"§ 36C-8A-801. Definition.

For purposes of this Article, the term "power holder" means a person who under the terms of a trust has the power to take certain actions with respect to a trust and who is not a trustee or a settlor with a power to direct or consent pursuant to G.S. 36C-8-808.

" § 36C-8A-802. Powers of a power holder.

(a) The terms of a trust may confer upon a power holder a power to direct or consent to a duty that would normally be required of a trustee, including, but not limited to, a power to direct or consent to the following:

(1) Investments, including any action relating to investment of all or any one or more of the trust assets that a trustee is authorized to take under this Chapter.

(2) Discretionary distributions of trust assets, including distributions to one or more beneficiaries, distribution of one of more trust assets, and termination of the trust by distribution of all of the trust assets.

(3) Any other matter regarding trust administration, including the transfer of the principal place of administration of the trust.

(b) The terms of a trust may also confer upon the power holder any other power, including, but not limited to, the power to do the following:

(1) Modify or amend the trust to do any of the following:

a. Achieve favorable tax status under applicable law.

b. Take advantage of laws governing restraints on alienation or other State laws restricting the terms of the trust, distribution of trust property, or the administration of the trust.

(2) Remove and appoint trustees and power holders.

(3) Increase or decrease the interests of any beneficiary.

(4) Grant a power of appointment to one or more beneficiaries of the trust or modify the terms of or terminate a power of appointment granted to a beneficiary by the governing instrument, except that a grant or modification of a power of appointment may not grant a beneficial interest to any of the following:

a. Any individual or class of individuals not specifically provided for in the trust instrument.

b. The person having the power to grant, modify, or terminate the power of appointment.

c. The estate and creditors of the person having the power to grant, modify, or terminate the power of appointment.

(5) Change the governing law of the trust.

" § 36C-8A-803. Duty and liability of power holder.

(a) A power holder is a fiduciary with respect to the powers conferred upon the power holder who, as such, is required to act in good faith and in accordance with the purposes and terms of a trust and the interests of the beneficiaries, except a power holder is not a fiduciary with respect to the following:

(1) A power to remove and appoint a trustee or power holder.

(2) A power that constitutes a power of appointment held by a beneficiary of a trust.

(3) A power the exercise or nonexercise of which may affect only the interests of the power holder and no other beneficiary.

(b) A power holder is liable for any loss that results from breach of fiduciary duty occurring as a result of the exercise or nonexercise of the power.

(c) The following provisions applicable to a trustee shall also be applicable to a power holder with respect to powers conferred upon the power holder as a fiduciary:

(1) The provisions of G.S. 36C-8-814 regarding discretionary powers and tax savings.

(2) The provisions of G.S. 36C-10-1001 through G.S. 36C-10-1012 regarding liability of trustees and rights of third persons dealing with trustees.

(3) The provisions of Article 9 of this Chapter regarding the uniform prudent investor rule.

" § 36C-8A-804. Duty and liability of trustee.

(a) If the terms of a trust confer upon a power holder the power to direct certain actions of the trustee, the trustee must act in accordance with the direction and is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from compliance with the direction unless compliance with the direction constitutes intentional misconduct on the part of the trustee.

(b) If the terms of a trust confer upon the power holder the power to consent to certain actions of the trustee, and the power holder does not provide consent within a reasonable time after the trustee has made a timely request for the power holder's consent, the trustee is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from the trustee's failure to take any action that required the power holder's consent.

(c) If the terms of a trust confer upon the person a power other than the power to direct or consent to actions of the trustee, the trustee is not liable, individually or as a fiduciary, for any loss resulting directly or indirectly from the exercise or nonexercise of the power.

(d) The trustee has no duty to monitor the conduct of the power holder, provide advice to the power holder, or consult with the power holder. The trustee is not required to give notice to any beneficiary of any action taken or not taken by the power holder whether or not the trustee agrees with the result. Administrative actions taken by the trustee for the purpose of implementing directions of the power holder, including confirming that the directions of the power holder have been carried out, do not constitute monitoring of the power holder nor do they constitute participation in decisions within the scope of the power holder's authority.

" § 36C-8A-805. Compensation and reimbursement of expenses of power holder.

A power holder as a fiduciary is entitled to compensation and reimbursement of expenses as provided in G.S. 32-59.

" § 36C-8A-806. Jurisdiction over power holder.

(a) By accepting appointment to serve as a power holder with respect to a trust having its principal place of business in this State, or by moving the principal place of administration to this State, the power holder submits personally to the jurisdiction of the courts of this State regarding any matter involving action or inaction of the power holder.

(b) This section does not preclude other methods of obtaining jurisdiction over a power holder.

" § 36C-8A-807. Accepting or declining the appointment as power holder.

(a) A person designated as a power holder accepts the appointment to serve as a power holder:

(1) By substantially complying with a method of acceptance provided in the terms of a trust; or

(2) If the terms of a trust do not provide a method or the method provided in the terms of a trust is not expressly made exclusive, by exercising powers or performing duties as a power holder or otherwise indicating acceptance of the appointment to serve as a power holder.

(b) A person designated as a power holder may reject the appointment to serve as a power holder. A trustee may give written notice to a power holder requesting acceptance of the appointment as power holder. A power holder who does not accept such appointment within House Bill 120 days after receipt of such notice is considered to have rejected the appointment to serve as a power holder.

" § 36C-8A-808. Powers of trustee in the absence of a power holder.

The trustee shall be vested with any fiduciary power or duty conferred upon a power holder by the terms of a trust that are described in G.S. 36C-8A-802(a) during the time when no power holder is available to exercise such power or perform such duty because of absence, illness, or other cause.

" § 36C-8A-809. More than one power holder.

When there is more than one power holder authorized to act, and they are unable to reach a unanimous decision, they may act by majority decision. Unanimity is required when only two are authorized to act.

" § 36C-8A-810. Resignation of power holder.

(a) A power holder may resign upon either of the following conditions:

(1) Upon at least 30 days' notice in writing to the qualified beneficiaries, the settlor, if living, and all trustees.

(2) With the approval of the court.

(b) In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.

" § 36C-8A-811. Removal of power holder.

(a) For the reasons set forth in subsection (b) of this section, the settlor of an irrevocable trust, a trustee of an irrevocable trust, or a beneficiary of an irrevocable trust may request the court to remove a power holder, or a power holder may be removed by the court on its own initiative.

(b) The court may remove a power holder under any of the following circumstances:

(1) The power holder has committed a serious breach of trust.

(2) Lack of cooperation with the trustee substantially impairs the administration of the trust.

(3) Because of unfitness, unwillingness, or a persistent failure of the power holder to exercise effectively the duties and powers conferred upon the power holder the court determines that removal of the power holder best serves the interests of the beneficiaries.

(4) There has been a substantial change of circumstances, the court finds that removal of the power holder best serves the interests of all of the beneficiaries and is consistent with a material purpose of the trust, and a suitable successor power holder is available.

(c) Pending a final decision on a request to remove a power holder, or in lieu of or in addition to removing a power holder, the court may order appropriate relief under G.S. 36C-10-1001(b) as may be necessary to protect the trust property or the interests of the beneficiaries."

Delivery of Property by Former Trustee

Section 3.5 modifies N.C.G.S. Section 36C-7-707(b) eliminating the Clerk of Superior Court's authority to transfer real property. This may well give rise to increased litigation costs where a trustee fails to cooperate as it will necessitate a transfer to the Superior Court in order for a judge to be bale effect a transfer in such cases.

" § 36C-7-707. Delivery of property by former trustee.

...

(b) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it. A former trustee shall execute those documents acknowledging the transfer of title to trust property as may be reasonably requested by the cotrustee, successor trustee, or other person entitled to it to facilitate administration of the trust, and in the event that the former trustee fails to do so, the clerk of superior court may order the former trustee to execute those documents."

Rule in Dumpor's Case Abolished - Broker Price Opinions Authorized

Session Law 2012-163, Senate Bill 521

Section 1 of this bill amends Chapter 41 of the General Statutes by adding a new section abolishing the Rule in Dumpor's Case. Section 2 provides statutory authority and regulation for real estate brokers furnishing an opinion of what a property might sell for. There is an express prohibition with respect to furnish appraisals or opinions as to "value" instead of "price". It amends Chapter 93A of the General Statutes by adding a new Article 6. Section 3 modifies G.S. 93E-1-3, the statute regulating appraisers to conform to the broker statute.

The Rule in Dumpor's Case is a common law property rule set forth by Sir Edward Coke in 1578 (4 Coke 1196 [1578]). In its simplest expression, it dictates that once a landlord has consented to an assignment of a tenant's interest in a leasehold estate (subletting), the landlord implicitly consents to all future subleases by the tenant and the covenant is wiped out. Some jurisdictions distinguish the rule to apply where the covenants in the lease only apply to the lessee (referred to as a single covenant) and not where covenants apply to assignees (referred to as multiple covenants) and thus hold that the rule will not apply where the assignees are bound. While citing these cases without discussing the merits of these distinctions, the North Carolina Supreme Court adopted this view in North Carolina in its opinion in Childs v. Warner Brothers Southern Theatres, 200 N.C. 333, 156 S.E. 923 (1931). It observed that the covenant of payment applies to assignees and so should the covenant against assignment.

Arguably, the rule applies in the instance of a lease containing only single covenants, but permission for assignment of such a lease would be difficult to envision as it would become essentially unenforceable. In any event, this may largely be an academic question as most parties have since commonly avoided the effect of the rule by including a clause in the lease agreement reserving to the landlord the right to approve or disapprove an assignment as a boilerplate provision.

" § 41-6.4. Rule in Dumpor's Case abolished.

(a) The rule of property known as the Rule in Dumpor's Case is abolished.

(b) This section shall become effective October 1, 2012, and applies to transfers of property that take effect on or after that date."

"Chapter 93A, Article 6.

"Broker Price Opinions and Comparative Market Analyses .

"§ 93A-82. Definitions.

As used in this Article, the terms "broker price opinion" and "comparative market analysis" mean an estimate prepared by a licensed real estate broker that details the probable selling price or leasing price of a particular parcel of or interest in property and provides a varying level of detail about the property's condition, market, and neighborhood, and information on comparable properties, but does not include an automated valuation model.

" § 93A-83. Broker price opinions and comparative market analyses for a fee.

(a) Authorized. - A person licensed under this Chapter, other than a provisional broker, may prepare a broker price opinion or comparative market analysis and charge and collect a fee for the opinion if:

(1) The license of that licensee is active and in good standing; and

(2) The broker price opinion or comparative market analysis meets the requirements of subsection (c) of this section.

(3) The requirements of this Article shall not apply to any broker price opinion or comparative market analysis performed by a licensee for no fee or consideration.

(b) For Whom Opinion May Be Prepared. - Notwithstanding any provision to the contrary, a person licensed under this Chapter may prepare a broker price opinion or comparative market analysis for any of the following:

(1) An existing or potential seller of a parcel of real property.

(2) An existing or potential buyer of a parcel of real property.

(3) An existing or potential lessor of a parcel of or interest in real property.

(4) An existing or potential lessee of a parcel of or interest in real property.

(5) A third party making decisions or performing due diligence related to the potential listing, offering, sale, option, lease, or acquisition price of a parcel of or interest in real property.

(6) An existing or potential lienholder or other third party for any purpose other than as the basis to determine the value of a parcel of or interest in property, for a mortgage loan origination, including first and second mortgages, refinances, or equity lines of credit.

(7) The provisions of this subsection do not preclude the preparation of a broker price opinion or comparative market analysis to be used in conjunction with or in addition to an appraisal. Page 2 S521 [Ratified]

(c) Required Contents of a Broker Price Opinion or Comparative Market Analysis. - A broker price opinion or comparative market analysis shall be in writing and conform to the standards provided in this Article that may include, but are not limited to, the following:

(1) A statement of the intended purpose of the broker price opinion or comparative market analysis.

(2) A brief description of the subject property and property interest to be priced.

(3) The basis of reasoning used to reach the conclusion of the price, including the applicable market data or capitalization computation.

(4) Any assumptions or limiting conditions.

(5) A disclosure of any existing or contemplated interest of the broker issuing the broker price opinion, including the possibility of representing the landlord/tenant or seller/buyer.

(6) The effective date of the broker price opinion.

(7) The name and signature of the broker issuing the broker price opinion and broker license number.

(8) The name of the real estate brokerage firm for which the broker is acting.

(9) The signature date.

(10) A disclaimer stating that "This opinion is not an appraisal of the market value of the property, and may not be used in lieu of an appraisal. If an appraisal is desired, the services of a licensed or certified appraiser shall be obtained. This opinion may not be used by any party as the primary basis to determine the value of a parcel of or interest in real property for a mortgage loan origination, including first and second mortgages, refinances, or equity lines of credit."

(11) A copy of the assignment request for the broker price opinion or comparative market analysis.

(d) Rules. - The North Carolina Real Estate Commission shall have the power to adopt rules that are not inconsistent with the provisions in this Article.

(e) Additional Requirements for Electronic or Form Submission. - In addition to the requirement of subsection (c) of this section, if a broker price opinion is submitted electronically or on a form supplied by the requesting party, the following provisions apply:

(1) A signature required by subdivision (7) of subsection (c) of this section may be an electronic signature, as defined in G.S. 47-16.2.

(2) A signature required by subdivision (7) of subsection (c) of this section and the disclaimer required by subdivision (10) of subsection (c) of this section may be transmitted in a separate attachment if the electronic format or form supplied by the requesting party does not allow additional comments to be written by the licensee. The electronic format or form supplied by the requesting party shall do the following:

a. Reference the existence of a separate attachment.

b. Include a statement that the broker price opinion or comparative market analysis is not complete without the attachment.

(f) Restrictions. - Notwithstanding any provisions to the contrary, a person licensed pursuant to this Chapter may not knowingly prepare a broker price opinion or comparative market analysis for any purpose in lieu of an appraisal when an appraisal is required by federal or State law. A broker price opinion or comparative market analysis that estimates the value of or worth a parcel of or interest in real estate rather than sales or leasing price shall be deemed to be an appraisal and may not be prepared by a licensed broker under the authority of this Article, but may only be prepared by a duly licensed or certified appraiser, and shall meet the regulations adopted by the North Carolina Appraisal Board. A broker price opinion or comparative market analysis shall not under any circumstances be referred to as a valuation or appraisal.

(g) No Report of Predetermined Result. - A broker price opinion or comparative market analysis shall not include the reporting of a predetermined result."