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New South Carolina Code Impacts Foreclosures for Border Counties of North Carolina

Posted By USFN, Tuesday, November 29, 2016
Updated: Monday, October 31, 2016

November 29, 2016

by Gregory D. Spink
The Hunoval Law Firm – USFN Member (North Carolina)

As many are aware, the Carolinas have been in a border war for 20 years. The issues relate to surveys created during the Colonial era using landmarks that no longer exist: rocks, trees, and even fence posts. Both legislatures have worked out a compromise regarding the boundary dispute, but now both states must look to the legal implications of new property lines.

South Carolina took the first step — enacting S.C. Code § 30-5-270, regarding real property recordings and filings for counties bordering North Carolina, with an effective date of January 1, 2017. The specific counties impacted by this code are Cherokee, Chesterfield, Dillon, Greenville, Horry, Lancaster, Marlboro, Oconee, Pickens, Spartanburg, and York. The register of deeds is required to index and record a “Notice of State Boundary Clarification” to provide notice to anyone checking title to real property for the affected lands. This notice will identify the land, the parties who are the owners, and corresponding recorded instruments. [S.C. Code § 30-5-270(C)(2)].

How Does this New Law Impact Foreclosures?
In addition to the above-cited code, the legislature enacted S.C. Code § 29-3-800 dealing with the foreclosure of real estate liens for counties bordering North Carolina. When a foreclosure is initiated in an affected county, the mortgagee (through its attorney of record) shall file a copy of the recorded Notice of Boundary Clarification and attorney certification regarding title to the real property contained in the affected county. The attorney must also serve the certifications with the summons and complaint.

This new law focuses on property that was believed to have been in North Carolina but is now determined to be wholly (or in part) in South Carolina due to the boundary clarification. [S.C. Code § 30-5-270]. The attorney of record is required to serve the Notice of Boundary Clarification and filed pleadings “upon any party identified on the Notice of Boundary Clarification or known to have an interest in the subject affected lands, not already a party to the action ...” [S.C. Code § 29-3-800(B)(2)].

The practical impact could involve additional judgment lienholders, amending complaints, re-serving pleadings, and the obvious costs of ordering updated title for all property within the affected counties. The new boundary lines will not impact title or casualty insurance issued prior to January 1, 2017, regardless of whether the insured property is determined to be in another state. [Click here to see map from North Carolina Public Records, as cited by the Washington Times.]

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