North Carolina Passes Bill Banning NTRAPS
August 31, 2023
North Carolina became the latest state to pass legislation that protects homeowners from the predatory practice of filing unfair real estate fee agreements in property records, known as Non-Title Recorded Agreements for Personal Services (NTRAPS).
House Bill 422, which was signed into law Aug. 24 by N.C. Gov. Roy Cooper, makes NTRAPS unenforceable, restricts and prohibits the recording of these property records, creates penalties if they are recorded and provides for the removal of NTRAPS from property records and recovery of damages.
ALTA has prioritized combating this abusive and anti-consumer activity in the marketplace, which adds costs and complications to the transfer or financing of real estate. ALTA has worked with national stakeholders to design model legislation to make these types of unfair agreements unenforceable, prevent the recording of the agreements in land records and provide consumers with options for seeking damages.
Other states to pass versions of bills that address NTRAPS include Alabama, Colorado, Florida, Georgia, Idaho, Iowa, Maine, Maryland, North Dakota, Ohio, Tennessee, Utah and Washington.
“The property rights of American homebuyers must be protected,” said Elizabeth Blosser, ALTA’s vice president of government affairs “A home often is a consumer’s largest investment, and the best way to support the certainty of land ownership is through public policy. We must ensure that there are no unreasonable restraints on a homebuyer’s future ability to sell or refinance their property due to unwarranted transactional costs.”
NTRAPS have been recorded in property records since 2018. The practice preys upon homeowners, offering small cash gifts in exchange for decades-long contracts for the exclusive rights to sell the property. Submitting NTRAPS for inclusion in property records characterized as liens, covenants, encumbrances or security interests in exchange for money creates impediments and increases the cost and complexity of transferring or financing real estate in the future.
“The passage of HB 422 is a continuation of AARP’s advocacy efforts, undertaken in collaboration with ALTA in other states, to put an end to this harmful practice,” said AARP Government Affairs Director Samar Jha. “We expect and hope to work on similar legislative solutions in other states to help protect homeowners against such predatory housing practices.”
HB 422 follows the objective of similar bills introduced across the country to provide a remedy for existing NTRAPS while also discouraging these types of unfair practices impacting homeowners.
“NCLTA members proudly advocate for and support legislation which protects North Carolinians from predatory housing practices,” said NCLTA President James L. Bryan Jr. “We appreciate the work by the legislature and the governor to protect North Carolina consumers.”
Contact ALTA at 202-296-3671 or communications@alta.org.