By Elizabeth Barnhardt
Government Affairs Director
The North Carolina General Assembly met for its long session from January to the end of June, 2011. From the minute Speaker of the House Thom Tillis of Cornelius, N.C., gaveled the legislature into session, the legislators maintained a fast pace session of regulatory reform and finalizing the N.C. state budget. During the legislative session, 1,721 bills were introduced and 396 became law. A record 15 bills were vetoed by Gov. Beverly Perdue.
While the session ended early this year, the legislature came back for two special sessions. The state legislature reconvened July 13 to consider legislation related to redistricting, veto overrides and bills related to election law. In addition, the legislature adopted conference reports for bills that were in conference as of adjournment and if conferees had been appointed by both chambers as of that date.
They returned a second time in mid-September to discuss legislation that would require constitutional amendments on the voters’ ballots statewide in 2012. There was significant legislation passed during the five-month session, which impacted Realtors® and the real estate industry. Following is an overview of some of the important issues for Realtors® and property owners across North Carolina.
Transfer tax repeal
North Carolinas Realtors® fared well during the session with their biggest victory coming early with passage of House Bill 92, Repeal Land Transfer Tax. Thanks to Bill Brawley (R-Mecklenburg), Rep. Julia Howard (R-Davie) and others, this legislation eliminates the transfer-tax option given to county governments in 2007.
North Carolinas Realtors® considered this the top priority for the legislative session. The land transfer tax, also known as the home tax, hinders economic development and causes housing to become much less affordable, especially for low- to moderate-income families and first-time homebuyers. It also singled out homeowners to pay for infrastructure and services that benefit everyone.
Since the option was put into place in 2007, voters in 24 referenda across the state resoundingly defeated the ballot measure, many by an average of 70-30 percent. During this session, legislators honored public sentiment by repealing this tax option on homeownership.
Commercial broker lien law
House Bill 174, Commercial Real Estate Broker Lien Act, was signed into law by Gov. Perdue June 17, 2011. The law protects a broker’s ability to receive payment for their hard work by granting brokers the ability to file a lien upon commercial real estate in the amount that the broker is due under a written instrument with that property owner. The North Carolina Association of Realtors® (NCAR) has been working with Rep. Darrell McCormick (R-Yadkin), our Commercial Alliance and other stakeholders for several years on this legislation.
Zoning/design and aesthetic controls
Due to the urging of Charlotte-area Realtors®, North Carolina Realtors® helped support legislation to limit city governments from overstepping the intent of laws giving cities and counties the authority to enact zoning ordinances related to health, safety and general welfare of its communities by expanding those ordinances to include aesthetic and design standards. Senate Bill 731, Zoning/Design & Aesthetic Controls, sponsored by Sen. Dan Clodfelter (D-Mecklenburg), limits and specifies when a municipality or county may enact zoning ordinances related to design and aesthetic controls.
While the bill passed the Senate with bipartisan support, the House did not hear the bill this year, though it is still alive for consideration during the short session in 2012. NCAR strongly supports the passage of this bill and will work with our allies, the North Carolina Home Builders Association and North Carolina Justice Center, to effect passage in 2012.
Residential rental inspections and registrations
Senate Bill 683, Residential Building Inspections, passed the legislature this session and requires local government units to follow certain guidelines when enacting inspection and registration programs for residential rental properties.
Increasingly, North Carolina municipalities have substantially broadened local ordinances and programs to require the registration and inspection of rental properties within their jurisdictions. SB 683 will require local governments to have reasonable cause to believe that unsafe housing conditions exist in order to inspect private housing. Reasonable cause can be based on prior bad acts by a landlord or a history of incidents at a rental house, actual knowledge by the local government, or anonymous reports. It will also require local government inspection programs to be administered in a non-discriminatory way with regard to housing type or ownership.
Landlord tenant law revisions
Over the years, the rights of landlords in North Carolina have been diminished. House Bill 493, Landlord Tenant Law Changes, proposes to amend the laws related to the landlord-tenant relationship. It addresses several items of importance to Realtors®, including the eviction process timeline, which is often extremely lengthy and greatly increases the landlord’s costs. This inevitably increases the cost of housing.
The North Carolina Legislature will meet for its “short” session in May 2012. Speaker Tillis has already said publically that he doesn’t expect to be in session for more than four to five weeks.