Closing on Land in NC

2 Replies

Looking to do land deals in North Carolina and am having trouble finding information that is specific  to empty land and not buying a home. 

Do I have to have a closing attorney? I've read yes but NC doesn't show up on most lists of states that require one. 

If yes to attorney, how much time/money is that going to suck up? I get that sellers don't have to make any disclosures in the state but it's not exactly rocket science doing a title search. Rather not involve a lawyer in the process if I don't have to. 

Anything else I'd want to be aware of? Obviously early in the process but want to purchase something soon. Thanks. 

@Tyler Herman What's your reason for not wanting an attorney? To save a little money? The attorney cost will likely be $500 to $800...here's a narrative on the NC State Bar's thoughts on a non-attorney handling a residential real estate closing--good luck.

The North Carolina State Bar has interpreted the state's unauthorized practice of law statutes as prohibiting a non-attorney from handling a residential real estate closing (Authorized Practice Advisory Opinion 2002-1) (APAO 2002-1). However, an attorney need not be physically present at the closing (2002 Formal Ethics Opinion 9 (02 FEO 9)).

The North Carolina State Bar determined that a non-attorney is engaged in unauthorized practice of law if performing various functions related to a residential real estate closing, including, among others: (1) providing an opinion as to title of real property, (2) explaining the legal status of title to real property, (3) giving advice about the parties' rights and responsibilities concerning matters disclosed by a land survey, (4) providing opinions or advice regarding the parties' legal rights and obligations, (5) advising parties with respect to alternative ways for taking title to the property, (6) drafting legal documents, (7) recommending a course of action to a party under circumstances that require the exercise of legal judgment, and (8) attempting to settle a dispute between the parties that will have implications with respect to their legal rights or obligations (APAO 2002-1).

However, a nonlawyer may: (1) present and identify the documents necessary to complete a residential real estate closing, direct the parties where to sign the documents, and ensure that the parties have properly executed the documents and (2) receive and disburse the closing funds. The state bar determined that “performing administrative or ministerial activities in connection with the execution of residential real estate closing documents and the receipt and disbursement of the closing proceeds does not necessarily require the exercise of legal judgment or the giving of legal advice or opinions.”

In another opinion, the North Carolina State Bar reconsidered its earlier position and determined that the physical presence of an attorney was not required at a closing for a residential real estate purchase or refinancing. The state bar concluded that an attorney “may delegate the direction of the execution of the documents and disbursement of the closing proceeds to a non-lawyer who is supervised by the lawyer provided, however, the non-lawyer does not give legal advice to the parties” (02 FEO 9). The state bar also concluded that “the execution of the documents and the disbursement of the proceeds may be accomplished by mail, by e-mail, by other electronic means, or by some other procedure that would not require the lawyer and the parties to be physically present at one place and time.”

Originally posted by @Tyler Herman :

Looking to do land deals in North Carolina and am having trouble finding information that is specific  to empty land and not buying a home. 

Do I have to have a closing attorney? I've read yes but NC doesn't show up on most lists of states that require one. 

If yes to attorney, how much time/money is that going to suck up? I get that sellers don't have to make any disclosures in the state but it's not exactly rocket science doing a title search. Rather not involve a lawyer in the process if I don't have to. 

Anything else I'd want to be aware of? Obviously early in the process but want to purchase something soon. Thanks. 

For 'raw' land, you don't technically need an attorney to close your own transaction. I agree with Adam for residential property closings.

You are correct that title searches are not rocket science. I have bought hundreds of acres of land in the past few years in 6 or 7 counties in NC and SC. However... I never considered closing without an attorney and some form of title assurance or insurance. I have no clue what your purpose for buying the land is, so I won't make any assumptions. But In my case, if I put a $750,000 improvement on the vacant lot, everyone (my financing/development partners, bank, eventual buyer) will want to know that there is title insurance, hazard insurance, a recent survey (or legal eyes on the recorded plat), and accounting for the transactions. Yes you can show your purchase contract, but there is a lot more (phase 1 environmental, CAMA permits (if applicable), DENR signoffs, SUPs, etc.) that collectively make paying a closing attorney $500 bucks (which includes title re-insurance) a trivial expenditure in the big picture.

If your plan is to eventually subdivide your 'raw' land, you will (IMO) be doing yourself a disservice to not use an attorney toclose. For other parcel use types, for your sake I sure hope you do a boundary walk, view soil surveys, and all the other due diligence you should before handing the cashier's check to the parcel owner/seller. I almost bought a parcel a few years back where the timber rights on part of the parcel were severed/sold and I missed it... the attorney caught it. The seller didn't disclose. Imagine that!  I know you would never make such a mistake. But even though I am experienced and know a little about what I am doing, I am human and miss things. 

Good luck. 

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