North Carolina 2025-2026 Regular Session

North Carolina Senate Bill S423 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	S 1
4		-	SENATE BILL 423
	3	+	S D
	4	+	SENATE BILL DRS35163-NO-45A
	5	+
5	6
6	7
7	8		Short Title: Title Fraud Prevention. (Public)
8	9		Sponsors: Senators Sawrey, Daniel, and B. Newton (Primary Sponsors).
9		-	Referred to: ~~Rules and Operations of the Senate~~
10		-	~~March 25, 2025~~
11		-	~~S423 -v-1~~
	10	+	Referred to:
	11	+
	12	+	DRS35163 -NO-45A
12	13		A BILL TO BE ENTITLED 1
13	14		AN ACT TO PREVENT TITLE FRAUD BY AUTHORIZING THE REGISTER OF DEEDS 2
14	15		TO REQUIRE THE PRODUCTION OF A GOVERNMENT -ISSUED PHOTOGRAPHIC 3
15	16		IDENTIFICATION CARD BEFORE RECORDING A DEED OR CERTAIN OTHER 4
16	17		INSTRUMENTS AND PROVIDING FOR A SEPARATE CAUSE OF ACTION TO 5
17	18		QUIET TITLE AFTER AN ATTEMPTED FRAUDULENT CONVEYANCE. 6
18	19		The General Assembly of North Carolina enacts: 7
19	20		SECTION 1. Article 2 of Chapter 161 of the General Statutes is amended by adding 8
20	21		a new section to read: 9
21	22		"§ 161-32. Identity verification. 10
22	23		(a) Definitions. – The following definitions apply in this section: 11
23	24		(1) Instrument. – Any document that purports to convey title to, or an interest in, 12
24	25		real property, such as a deed, deed of trust, or other similar document. 13
25	26		(2) Trusted submitter. – Includes all of the following: 14
26	27		a. A title insurance company as described in Article 26 of Chapter 28 of 15
27	28		the General Statutes. 16
28	29		b. An attorney licensed to practice in this State. 17
29	30		c. A financial institution as defined in G.S. 53B-2. 18
30	31		(b) Identity Verification. – Notwithstanding any other provision to the contrary in this 19
31	32		Chapter, when an instrument is presented to the register of deeds for registration by an individual 20
32	33		who is not a trusted submitter or the authorized agent of a trusted submitter, the register of deeds 21
33	34		shall require the person presenting the instrument to produce a government-issued photographic 22
34	35		identification card as follows: 23
35	36		(1) If an individual who is not a trusted submitter or an authorized agent of a 24
36	37		trusted submitter presents an instrument to the register of deeds for registration 25
37	38		in person, the register of deeds shall require the individual to produce a 26
38	39		government-issued photographic identification card for inspection by the 27
39	40		register of deeds before registering the instrument. The register of deeds must 28
40	41		record the name and address of such person, as the information appears on the 29
41	42		identification card, in a record to be kept by the register of deeds, along with 30
42	43		the official records book and page number or instrument number of the 31
43	44		instrument registered in connection to the production of the identification 32
44	45		card. Such a record may not be made available for viewing on the register of 33
45	46		deeds' official public website but shall be made available for public inspection 34
46		-	and copying as required by the public records laws of this State. 35 General Assembly Of North Carolina Session 2025
47		-	Page 2 Senate Bill 423-First Edition
	47	+	and copying as required by the public records laws of this State. 35
	48	+	FILED SENATE
	49	+	Mar 24, 2025
	50	+	S.B. 423
	51	+	PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	52	+	Page 2 DRS35163-NO-45A
48	53		(2) If an individual who is not a trusted submitter or an authorized agent of a 1
49	54		trusted submitter presents an instrument in the form of an electronic 2
50	55		document, as defined in G.S. 47-16.3(2), to the register of deeds, as provided 3
51	56		by Article 1A of Chapter 47 of the General Statutes, the register of deeds shall 4
52	57		require the individual to submit a photocopy of a government-issued 5
53	58		photographic identification card before registering the instrument. The 6
54	59		register of deeds must note on the photocopy of the identification card the 7
55	60		official records book and page number or instrument number assigned to the 8
56	61		instrument registered in connection to the submission of the photocopy of the 9
57	62		identification card and retain the photocopy of such identification card in a 10
58	63		record to be kept by the register of deeds. Such a record may not be made 11
59	64		available for viewing on the register of deeds' official public website but shall 12
60	65		be made available for public inspection and copying as required by the public 13
61	66		records laws of this State. However, a person who submits a photocopy of his 14
62	67		or her identification card under this subsection may redact from the photocopy 15
63	68		of such identification card before submission all of the information he or she 16
64	69		does not wish to be made public, except for his or her name, address, and 17
65	70		photograph. 18
66	71		(c) Refusing to Register. – Notwithstanding any other provision to the contrary in this 19
67	72		Chapter, the register of deeds shall refuse to register an instrument if one of the following occurs: 20
68	73		(1) The individual presenting the instrument for registration is not a trusted 21
69	74		submitter or an authorized representative of a trusted submitter and fails to 22
70	75		provide the register of deeds with a government-issued photographic 23
71	76		identification card as required by subsection (b) of this section. 24
72	77		(2) The individual presenting the instrument for registration is not a trusted 25
73	78		submitter or an authorized representative of a trusted submitter and the name 26
74	79		on the government-issued photographic identification card presented by the 27
75	80		individual pursuant to subsection (b) of this section does not match the name 28
76	81		of the grantor or conveying party in the instrument presented for registration. 29
77	82		(d) Notice of Requirements. – The register of deeds shall provide notice of the identity 30
78	83		verification requirement described in subsection (b) of this section to the register of deeds' official 31
79	84		public website. 32
80	85		(e) Legal Protections and Remedies. – There is no right or cause of action against, and 33
81	86		no civil liability on the part of, the register of deeds or the county with respect to the register of 34
82	87		deeds' requirement of an identification card, or any refusal to register an instrument as allowed 35
83	88		by subsection (c) of this section. 36
84	89		(f) Confidentiality. – Nothing in this section shall be construed to require the register of 37
85	90		deeds to provide or allow access to a record or other information that is considered confidential 38
86	91		information as defined by G.S. 132-1.2." 39
87	92		SECTION 2. Article 1 of Chapter 41 of the General Statutes is amended by adding 40
88	93		a new section to read: 41
89	94		"§ 41-10.2 Titles quieted; fraudulent instruments. 42
90	95		(a) As used in this section, the term "instrument" means any of the following: 43
91	96		(1) A transfer of title to real property by deed or devise or other instrument 44
92	97		transferring title to real property. 45
93	98		(2) A deed of trust, mortgage, judgment, lien, encumbrance, financing statement, 46
94	99		affidavit, notice, memorandum, or any other instrument that establishes a 47
95	100		security interest in real property. 48
96	101		(3) A contract, right of refusal, or any other instrument that purports to establish 49
97	102		an interest, encumbrance, claim, or right relating to real property. 50 General Assembly Of North Carolina Session 2025
98		-	~~Senate Bill 423-First Edition~~ Page 3
	103	+	DRS35163-NO-45A Page 3
99	104		(b) The actual owner of an interest in real property subject to a recorded false, fictitious, 1
100	105		or fraudulent instrument may seek expedited relief under this section by filing an action in district 2
101	106		court alleging the filing or recording of a false, fictitious, or fraudulent instrument in a public 3
102	107		record or a private record generally available to the public. The notice shall be served and proof 4
103	108		of service shall be made in any manner provided by the Rules of Civil Procedure for service of 5
104	109		summons, including service by registered mail or certified mail, return receipt requested. After a 6
105	110		minimum of five days' notice in a manner prescribed in Rule 5 of the Rules of Civil Procedure 7
106	111		and opportunity to be heard to all persons claiming an ownership interest in the property, any 8
107	112		lienholder of record, including any person to whom a security instrument directs notice to be sent 9
108	113		and any person obligated to repay the indebtedness secured by the instrument, the court shall 10
109	114		convene a hearing. For purposes of the notice requirement in this subsection, the party seeking 11
110	115		relief may serve the person listed as grantor in the recorded purportedly false, fictitious, or 12
111	116		fraudulent instrument at the address listed in the instrument. If the court finds that there is no 13
112	117		statutory, contractual, or other merited legal justification for the instrument, the court shall find 14
113	118		that the recorded instrument is false and is void as a matter of law and shall enter an order to 15
114	119		remove the cloud from the title to the real property. The submission of an original instrument 16
115	120		demonstrating source of title, affidavit, or a lis pendens, notice of previous fraud, or other similar 17
116	121		instrument recorded by the actual owner of an interest in the real property shall be considered 18
117	122		evidence of fraudulent activity. The court may also include in the order any of the following 19
118	123		types of relief: 20
119	124		(1) Grant to a prevailing party possession of the real property and order the 21
120	125		ejectment of any party on the premises. 22
121	126		(2) Award attorneys' fees and other costs for the action to the prevailing party. 23
122	127		(3) Stay any proceedings involving the subject real property in which the property 24
123	128		owner or owners are not a party to. 25
124	129		(4) Upon a finding by the court that an action filed under this section is frivolous 26
125	130		or malicious, assess a civil penalty of not more than ten thousand dollars 27
126	131		($10,000), of which the clear proceeds assessed under this subdivision shall 28
127	132		be remitted to the Civil Penalty and Forfeiture Fund in accordance with 29
128	133		G.S. 115C-457.2. 30
129	134		(5) Upon a finding by the court that a party has presented for filing or recording 31
130	135		a false, fictitious, or fraudulent instrument as described in this section more 32
131	136		than once, enter a pre-filing injunction against the party. 33
132	137		(6) Enjoin a party from listing the real property for sale, lease, or any other similar 34
133	138		advertisement. 35
134	139		(c) Upon being presented with an order duly issued by a court of competent jurisdiction 36
135	140		of this State declaring that an instrument already recorded is false and void as a matter of law, 37
136	141		the register of deeds or clerk of superior court that received the recording shall record and 38
137	142		cross-index the court's order finding the instrument to be false. The register of deeds or clerk of 39
138	143		superior court may also conspicuously mark on the first page of the original record previously 40
139	144		recorded the following statement: "THE CLAIM ASSERTED IN THIS DOCUMENT IS FALSE 41
140	145		AND IS NOT PROVIDED FOR BY THE GENERAL LAWS OF THIS STATE. " 42
141	146		(d) In addition to any civil penalties provided for in this section, the presentation of an 43
142	147		instrument for recording with a register of deeds or a clerk of superior court that is determined to 44
143	148		be materially false, fictitious, or fraudulent shall constitute a violation of G.S. 75-1.1. 45
144	149		(e) The Administrative Office of the Courts shall develop a form for the expedited relief 46
145	150		filing established by this section and the clerk of superior court shall make the form available for 47
146	151		a petitioner. In addition to the requirements set forth in this section, the form shall include clear 48
147	152		language notifying the filing party that providing false information or statements is perjury 49
148	153		pursuant to G.S. 14-209 and punishable as a Class F felony." 50 General Assembly Of North Carolina Session 2025
149		-	Page 4 ~~Senate Bill 423-First Edition~~
	154	+	Page 4 DRS35163-NO-45A
150	155		SECTION 3. Section 1 of this act becomes effective October 1, 2025, and applies to 1
151	156		instruments and documents presented for registration on or after that date. Section 2 of this act 2
152	157		becomes effective October 1, 2025, and applies to causes of action arising on or after that date. 3
153	158		The remainder of this act is effective when it becomes law. 4