USA – NORTH CAROLINA Law and Practice Contributed by: John Livingston and Brittani Miller, Kilpatrick
2.9 Condemnation, Expropriation or Compulsory Purchase Governmental taking of land is possible under the legal principle of eminent domain. This allows the government or authorised entities to take private property for public use, provided that just compensation is paid to the property owner. The process begins with the government determining the need for the property for a pub - lic purpose. The entity must make a good-faith offer to purchase the property at fair market value. If the owner accepts, the transaction pro - ceeds as a voluntary sale. If the owner refuses, the government files a condemnation action in court. The court determines whether the tak - ing is lawful and establishes the amount of just compensation owed to the property owner, often based on property appraisals and expert testi - mony. North Carolina law also allows property owners to challenge the taking if they believe it is not for a legitimate public purpose or if the compensation offered is inadequate. 2.10 Taxes Applicable to a Transaction An excise tax is levied on each instrument by which any interest in real property is conveyed to another person or entity unless the conveyance qualifies for an exemption under North Carolina law. The tax rate is USD1 on each USD500 or fractional part thereof of the consideration or value of the interest conveyed. The seller pays the tax to the register of deeds of the county in which the real estate is located before recording the instrument of conveyance. If the instrument transfers a parcel of real estate lying in two or more counties, the tax must be paid to the reg - ister of deeds of the county in which the greater part of the real estate with respect to value lies. Excise taxes on conveyances do not apply to any of the following transfers of an interest in real property:
• For rental properties, landlord-tenant laws outline lease obligations, eviction proce - dures and tenant rights. Additionally, certain municipalities have regulations prohibiting or restricting short-term rentals. 2.7 Soil Pollution or Environmental Contamination A buyer of real estate may be held responsible for soil pollution or environmental contamination on a property, even if they did not cause it. To mitigate this risk, buyers should perform due dili - gence investigations, negotiate contractual pro - tections with sellers and explore liability-limiting programmes prior to closing on the purchase of the property to gain a thorough understanding of what issues impact the property. Additionally, a Phase I Environmental Site Assessment should be completed prior to any real property transfer. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A buyer should review and analyse the zoning code for the municipality and the county where the subject property is located to determine permitted uses. Most municipalities make zon - ing codes available online or at their planning department. Many municipalities will issue zon - ing letters on request stating whether there are any current violations of the zoning code with respect to the property. It is possible to enter into development agree - ments with relevant public authorities following open dialogue and negotiations about the best way forward for all involved parties. The specif - ics of the development agreement are governed by statute (N.C. Gen. Stat. § 153A-349 et seq; 160A-400 et seq (2025)).
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