USA – NORTH CAROLINA Law and Practice Contributed by: John Livingston and Brittani Miller, Kilpatrick
Affecting North Carolina specifically, the growth discussed above is driving higher property val - ues and pricing many potential buyers out of the market. Various proposals to force municipalities to allow greater density or to limit property tax increases have been discussed, but none have obtained much traction. North Carolina did recently enact the Unfair Real Estate Agreements Act (N.C. Gen. Stat. § 93A- 85.1 et seq (2025)). The purpose of the Act is to “prohibit the use of real estate service agree - ments that are unfair to an owner of residential real estate” . A real estate service violates the Act if it is for a term longer than one year and does any of the following: (i) runs with the land, bind - ing future owners of the residential real estate, (ii) allows for assignment of the right to provide services without notice or consent of the owner or buyer, or (iii) creates an encumbrance on the property. Additionally, the Hurricane Helene Relief Bill adds to the already broad definition of “down zoning” and, more notably, requires that local governments obtain written consent from any and all owners of “down zoned” property (N.C. Gen. Stat. § 160D-601(d) (2025)). 2. Sale and Purchase 2.1 Categories of Property Rights Property rights that can be acquired include: • Ownership rights: Complete ownership of property, allowing possession, use, transfer and encumbrance. • Easement rights: Non-possessory rights to use another’s property for specific purposes, such as access or utilities.
• Mineral rights: Rights to extract and profit from natural resources beneath the surface. • Air rights: The ability to use or develop the space above a property. • Riparian or water rights: Rights to use water sources near or flowing through a property. 2.2 Laws Applicable to Transfer of Title The laws that apply to the transfer of title of real estate include recording laws which mandate whether and how deeds should be recorded in local land records to establish public notice of ownership and determine priority in competing claims. In determining priority between compet - ing claims, North Carolina is a race state, mean - ing priority is given to the first party to record a valid claim with respect to the applicable prop - erty. Local laws also define the format for, and information required to be included in, deeds, memoranda of agreements, deeds of trust and other recorded documents. Additionally, tax laws play a role in the transfer process, requiring property or transfer taxes to be paid or waived where appropriate to com - plete the transaction legally. All transfers of real property in North Carolina are subject to an excise tax payable at the time of recording the deed for the transfer other than transfers made for the following statutory exemptions: (1) by operation of law; (2) by lease for a term of years; (3) by or pursuant to the provisions of a will; (4) by intestacy; (5) by gift; (6) if no consideration in property or money is due or paid by the trans - feree to the transferor; (7) by merger, conversion or consolidation; and (8) by an instrument secur - ing indebtedness (N.C. Gen. Stat. § 105-228.28 et seq (2025)). The excise tax is charged at a rate of USD1 per USD500 of value of the property. Additionally, the following seven of North Caro - lina’s 100 counties impose a local transfer tax of up to 1% of the value of the property: Camden,
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