Neeley v. Fields (COA 22-30) 10/18/2022
Deed Construction, Description Exception for "easements of record"

An exception for "covenants, easements, and restrictions of record" included in the legal description of a deed is sufficient to except all easements that are a matter of public record within the Grantor's chain of title even when no further exception for easements of record is included in the covenants clause. Such were the facts in this case. The Court also held that the "drafter of a general warranty deed does not commit legal malpractice in failing to include an exception to an easement of record in any other part of a general warranty deed if the exception has been noted within the general warranty deed's legal description. Summary judgment is therefore appropriate in a legal malpractice action arising out of an alleged failure to include an exception for easements of record in the covenants clause when such exception is provided within the general warranty deed's legal description."

This seems to be a divergence from North Carolina's long held requirement that exculpations must be specific to be enforceable, see Perry v. Wiggins, 197 N.C. 502 (N.C. 1929).

In Re Foreclosure of Martin E. Rock, 2022-NCSC-106, 11/04/2022
Pre 1986 Condos May Exercise Power of Sale under N.C.G.S. § 47C-3-116(f)

The North Carolina Supreme Court addressed whether a condominium formed prior to the enactment of the North Carolina Condominium Act in 1985 has the power of sale for foreclosure pursuant to section 3-116 of that Act for nonpayment of an assessment that occurred after October 1, 1986. Having construed plain language of the statute and having determined that development's Declaration does not contain a provision "expressly to the contrary" of the power of sale for foreclosure permitted by N.C.G.S. § 47C-3-116(f), and after a straightforward analysis of the facts and law, the Supreme Court concluded that the Court of Appeals erred by failing to reference and apply the plain language of N.C.G.S. Section 47C-1-102(a) when addressing the respondent's contention that the condominium association lacked the power of sale for foreclosure. The Supreme Court reversed the Court of Appeals' decision and remanded the case to the Court of Appeals to address the respondent's argument, that the Court of Appeals did not reach, that he was not in default.

Clearly, title examiners will need to recognize that liens of pre Condo Act associations present the possibility of encumbrances that will need to be addressed.