North Carolina House Bill 690, a bill introduced during the 2011 House session and backed by the Real Estate Lawyers Association of North Carolina, Inc., (RELANC), and which late in the session was restyled as Senate Bill 349, was voted upon and passed the House and Senate yesterday by unanimous votes in both Chambers.  The bill now goes to the Governor for her signature.

The text of the bill is available for review at http://www.ncga.state.nc.us/Sessions/2011/Bills/Senate/PDF/S349v3.pdf.  The portion of SB349 which arises from the originally proposed HB 690 begins at Section 3 of the bill passed yesterday.   Sponsors of the bill added the existing language from HB690 to SB349 to ensure these provisions passed this legislative session, and they did.

The new legislation provides for the following:

·         All interest earned by any person who maintains a trust or escrow account to disburse closing and loan funds on real estate closings must pay interest to IOLTA.

·         No person who violates the provisions prohibiting the unauthorized practice of law in the North Carolina General Statues may collect any fees.

·         There is established a private cause of action against any person who knowingly commits or aids and abets another person committing the unauthorized practice of law.

Together with APAO 2002-1 which states definitely that non-attorneys are prohibited from handling a residential real estate transaction in NC, together with numerous rulings by the State Bar in cease and desist letters outlining activities by lay closing shops and title agencies which are prohibited under NC law, the State of North Carolina has now staked out very certain consequences for lay closers and others who violate existing NC law and thereby threaten to destabilize the financial health and well being of the citizens of this state, real property owners, the financial industry, and the State of North Carolina.  A copy of APAO 2002-1 can be viewed at the following weblink:  http://www.relanc.com/documents/Ex1-APAO2002-1.pdf.