State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_47 > GS_47-20

§ 47‑20.  Deeds oftrust, mortgages, conditional sales contracts, assignments of leases and rents;effect of registration.

(a)        No deed of trust ormortgage of real or personal property, or of a leasehold interest or otherchattel real, or conditional sales contract of personal property in which thetitle is retained by the vendor, shall be valid to pass any property as againstlien creditors or purchasers for a valuable consideration from the grantor,mortgagor or conditional sales vendee, but from the time of registrationthereof as provided in this Article; provided however that any transactionsubject to the provisions of the Uniform Commercial Code (Chapter 25 of theGeneral Statutes) is controlled by the provisions of that act and not by thissection. Unless otherwise stated either on the registered instrument or on aseparate registered instrument duly executed by the party whose priorityinterest is adversely affected, (i) instruments registered in the office of theregister of deeds shall have priority based on the order of registration asdetermined by the time of  registration, and (ii) if instruments are registeredsimultaneously, then the instruments shall be presumed  to have priority asdetermined by:

(1)        The earliestdocument number set forth on the  registered instrument.

(2)        The sequential bookand page number set forth on the registered instrument if no document number isset forth on the registered instrument.

The presumption created by thissubsection is rebuttable.

(b)        For purposes ofthis section and G.S. 47‑20.1, the following definitions apply:

(1)        "Rents, issues,or profits" means all amounts payable by or on behalf of any lessee,tenant, or other person having a possessory interest in real estate on accountof or pursuant to any written or oral lease or other instrument evidencing apossessory interest in real property or pursuant to any form of tenancy impliedby law, and all amounts payable by or on behalf of any licensee or permittee orother person occupying or using real property under license or permission fromthe owner or person entitled to possession. The term shall not include farmproducts as defined in G.S. 25‑9‑102(34), timber, the proceeds fromthe sale of farm products or timber, or the proceeds from the recovery orseverance of any mineral deposits located on or under real property.

(2)        "Assignment ofleases, rents, issues, or profits" means every document assigning,transferring, pledging, mortgaging, or conveying an interest in leases,licenses to real property, and rents, issues, or profits arising from realproperty, whether set forth in a separate instrument or contained in amortgage, deed of trust, conditional sales contract, or other deed orinstrument of conveyance.

(3)        "Collateralassignment" means any assignment of leases, rents, issues, or profits madeand delivered in connection with the grant of any mortgage, or the execution ofany conditional sales contract or deed of trust or in connection with anyextension of credit made against the security of any interest in real property,where the assignor retains the right to collect or to apply such leaserevenues, rents, issues, or profits after assignment and prior to default.

(c)        The recording of awritten document in accordance with G.S. 47‑20.1 containing an assignmentof leases, rents, issues, or profits arising from real property shall be validand enforceable from the time of recording to pass the interest granted,pledged, assigned, or transferred as against the assignor, and shall beperfected from the time of recording against subsequent assignees, liencreditors, and purchasers for a valuable consideration from the assignor.

(d)        Where an assignmentof leases, rents, issues, or profits is a collateral assignment, after adefault under the mortgage, deed of trust, conditional sales contract, orevidence of indebtedness which such assignment secures, the assignee shallthereafter be entitled, but not required, to collect and receive any accruedand unpaid or subsequently accruing lease revenues, rents, issues, or profitssubject to the assignment, without need for the appointment of a receiver, anyact to take possession of the property, or any further demand on the assignor.Unless otherwise agreed, after default the assignee shall be entitled to notifythe tenant or other obligor to make payment to him and shall also be entitledto take control of any proceeds to which he may be entitled. The assignee mustproceed in a commercially reasonable manner and may deduct his reasonableexpenses of realization from the collections.

(e)        This section shallnot exclude other methods of creating, perfecting, collecting, sequestering, orenforcing a security interest in rents, issues, or profits provided by the lawof this State. (1829,c. 20; R.C., c. 37, s. 22; Code, s. 1254; Rev., s. 982; 1909, c. 874, s. 1;C.S., s. 3311; 1953, c. 1190, s. 1; 1959, c. 1026, s. 2; 1965, c. 700, s. 8;1967, c. 562, s. 5; 1991, c. 234, s. 1; 2000‑169, s. 35; 2003‑219,s. 3; 2005‑212, s. 3.)