| 12 | 13 | | A BILL TO BE ENTITLED 1 |
|---|
| 13 | 14 | | AN ACT TO PROHIBIT HOUSING MARKET MANIPULATION AND TO PROTECT 2 |
|---|
| 14 | 15 | | AGAINST ARTIFICIAL INFLATION BY EXCESSIVE HOME BUYING BY ENTITIES 3 |
|---|
| 15 | 16 | | PURCHASING HOMES FOR USE AS RENTAL PROPERTIES. 4 |
|---|
| 16 | 17 | | The General Assembly of North Carolina enacts: 5 |
|---|
| 17 | 18 | | SECTION 1. Chapter 75 of the General Statutes is amended by adding a new Article 6 |
|---|
| 18 | 19 | | to read: 7 |
|---|
| 19 | 20 | | "Article 9. 8 |
|---|
| 20 | 21 | | "Housing Market Manipulation. 9 |
|---|
| 21 | 22 | | "§ 75-150. Purpose. 10 |
|---|
| 22 | 23 | | (a) The General Assembly finds that North Carolina has experienced urban growth at 11 |
|---|
| 23 | 24 | | levels significantly higher than many states. The General Assembly does not wish to inhibit the 12 |
|---|
| 24 | 25 | | ownership of property but recognizes that it is becoming increasingly common for business 13 |
|---|
| 25 | 26 | | entities to purchase substantial numbers of single-family homes for use as rental properties, both 14 |
|---|
| 26 | 27 | | lowering the supply of, and increasing the costs of, such homes. The General Assembly further 15 |
|---|
| 27 | 28 | | finds that home ownership is recognized as one of the most reliable ways to build wealth, 16 |
|---|
| 28 | 29 | | permitting owners to build equity, which can serve as reserves in times of need, and in terms of 17 |
|---|
| 29 | 30 | | passive income and increases in market value of owned property. 18 |
|---|
| 30 | 31 | | (b) The General Assembly seeks, by this narrowly tailored Article, to balance the 19 |
|---|
| 31 | 32 | | interests of building wealth through the use of business entities acquiring properties for rental 20 |
|---|
| 32 | 33 | | purposes against the State, local, and individual economic benefits that result from having a 21 |
|---|
| 33 | 34 | | citizenry broadly engaged in and accruing the advantages attendant to home ownership. 22 |
|---|
| 34 | 35 | | "§ 75-151. Definitions. 23 |
|---|
| 35 | 36 | | The following definitions apply in this Article: 24 |
|---|
| 36 | 37 | | (1) Affiliate. – A person, other than an individual, that wholly or substantially 25 |
|---|
| 37 | 38 | | owns, is wholly or substantially owned by, or is under common ownership 26 |
|---|
| 38 | 39 | | with another person. 27 |
|---|
| 39 | 40 | | (2) Individual. – A human being. 28 |
|---|
| 40 | 41 | | (3) Person. – A fiduciary, a firm, an association, a partnership, a limited liability 29 |
|---|
| 41 | 42 | | company, a corporation, or other business entity or group acting as a unit. The 30 |
|---|
| 42 | 43 | | term includes an officer or employee of a corporation, a member, a manager, 31 |
|---|
| 43 | 44 | | or an employee of a limited liability company, and a member or employee of 32 |
|---|
| 44 | 45 | | a partnership who, as officer, employee, member, or manager, acts on behalf 33 |
|---|
| 45 | 46 | | of the business entity with whom they are associated or an affiliate of that 34 |
|---|
| 48 | 53 | | (4) Qualifying county. – A county with a population greater than 150,000 as of 1 |
|---|
| 49 | 54 | | the most recent decennial census. 2 |
|---|
| 50 | 55 | | (5) Single-family home. – A residential structure that is either a fully detached or 3 |
|---|
| 51 | 56 | | semi-detached building or that is a row or town home that (i) is separated from 4 |
|---|
| 52 | 57 | | the adjacent unit by a ground-to-roof wall, (ii) does not share heating or 5 |
|---|
| 53 | 58 | | air-conditioning systems or utilities, and (iii) does not have units located 6 |
|---|
| 54 | 59 | | above or below. 7 |
|---|
| 55 | 60 | | "§ 75-152. Impermissible ownership quotas. 8 |
|---|
| 56 | 61 | | It is unlawful for a person, including affiliates of the person, to purchase a single-family home 9 |
|---|
| 57 | 62 | | in a qualifying county for a purpose other than use by the person as a residence if the person, 10 |
|---|
| 58 | 63 | | including affiliates of the person, owns 100 or more single-family homes in qualifying counties 11 |
|---|
| 59 | 64 | | that are used primarily for rental purposes. 12 |
|---|
| 60 | 65 | | "§ 75-153. Enforcement; remedies; damages. 13 |
|---|
| 61 | 66 | | (a) The Attorney General shall have the same authority under this Article to make rules, 14 |
|---|
| 62 | 67 | | conduct civil investigations, bring civil actions, and enter into assurances of discontinuance as 15 |
|---|
| 63 | 68 | | provided under this Chapter. In an action brought by the Attorney General pursuant to this 16 |
|---|
| 64 | 69 | | section, the court may award or impose any relief available under this Chapter. 17 |
|---|
| 65 | 70 | | (b) A person aggrieved by a violation of this Article or by a violation of rules adopted 18 |
|---|
| 66 | 71 | | under this Article or the board of county commissioners of the county in which such person lives 19 |
|---|
| 67 | 72 | | may bring an action in superior court against a person who acquires a single-family home in 20 |
|---|
| 68 | 73 | | violation of this Article. A court may impose civil penalties on a person found to violate this 21 |
|---|
| 69 | 74 | | Article of up to one hundred dollars ($100.00) per day for each single-family home acquired in 22 |
|---|
| 70 | 75 | | violation of this Article and may award to a plaintiff who prevails in an action brought pursuant 23 |
|---|
| 71 | 76 | | to this subsection one or more of the following remedies: 24 |
|---|
| 72 | 77 | | (1) Equitable relief. 25 |
|---|
| 73 | 78 | | (2) Damages. 26 |
|---|
| 74 | 79 | | (3) Costs and fees, including reasonable attorneys' fees. 27 |
|---|
| 75 | 80 | | (4) Exemplary damages in an amount equal to fifty thousand dollars ($50,000) or 28 |
|---|
| 76 | 81 | | three times the total of damages, costs, and fees, whichever is greater. 29 |
|---|
| 77 | 82 | | (c) A court may award to a defendant who prevails in an action brought pursuant to this 30 |
|---|
| 78 | 83 | | section costs and fees, including reasonable attorneys' fees, if the court finds the action was not 31 |
|---|
| 79 | 84 | | well-grounded in fact and warranted by existing law or was interposed for any improper purpose, 32 |
|---|
| 80 | 85 | | such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. 33 |
|---|
| 81 | 86 | | (d) Joinder of Interested Parties. – In an action arising under subsection (a) or (b) of this 34 |
|---|
| 82 | 87 | | section, the court shall grant a motion by the Attorney General or a board of county 35 |
|---|
| 83 | 88 | | commissioners or a person aggrieved under this Article for joinder of any affiliate of a defendant 36 |
|---|
| 84 | 89 | | named in the litigation for purposes of (i) ensuring a proper accounting regarding the total number 37 |
|---|
| 85 | 90 | | of single-family homes owned by the named defendant and any affiliates and (ii) permitting 38 |
|---|
| 86 | 91 | | proper enforcement, remedies, and damages. 39 |
|---|
| 87 | 92 | | (e) If a party is unable to pay an amount awarded by the court pursuant to subsection (a) 40 |
|---|
| 88 | 93 | | or (b) of this section, the court may find any interested party joined pursuant to subsection (d) of 41 |
|---|
| 89 | 94 | | this section jointly and severally liable for violations of this Article and make the award 42 |
|---|
| 90 | 95 | | recoverable against any or all of the joined interested parties. 43 |
|---|
| 91 | 96 | | (f) This Article shall not be construed to limit rights and remedies available to the State 44 |
|---|
| 92 | 97 | | of North Carolina or to any person under any other law and shall not alter or restrict the Attorney 45 |
|---|
| 93 | 98 | | General's authority under this Article with regard to conduct involving assertions of violations of 46 |
|---|
| 94 | 99 | | this Article." 47 |
|---|
| 95 | 100 | | SECTION 2. This act is effective when it becomes law and applies to purchases of 48 |
|---|
| 96 | 101 | | real estate on or after that date. 49 |
|---|