What follows is some general information regarding the recording of documents in North Carolina, title insurance policies and premiums and property taxes:

General Information on Recording Documents in a North Carolina Register of Deeds

Most documents affecting North Carolina real property are recorded in the Office of the Register of Deeds of the county where the real property is located.  If the real property straddles a county line, then the documents must be recorded in each county in order to be effective.  The cost to record deeds and all other instruments (except UCC filings and plats ) is $14.00 for the first page and $3.00 for each additional page of the document.   All instruments (except plats and UCC filings) must show on their face the name of the person (usually the attorney) who prepared the document.  Unless a substitution of trustee or a release deed is involved, there is no charge to record the documents needed to carry out a cancellation of a deed of trust.  The cost to record a surveyor’s plat is $21.00.  The cost to record a UCC financing statement is $38 each for the county Register of Deeds and the North Carolina Secretary of State, provided that the filing document is only two pages long.  With the new UCC forms that went into effect during the year 2001, a typical fixture filing is four pages long (base document, plus addendum for fixture information), and a four page document costs $45 to record in each jurisdiction.

Strict Formatting Requirements: 

1.  Each page to recorded must be either standard letter (8 ½" x 11") or standard legal (8 ½" x 14") size.

2.  There must be a totally blank three inch margin across the top of the first page of the document.  There must also be a one half inch blank margin on all sides and the bottom of the first document page as well as all subsequent document pages.  ATTENTION NOTARIES:  The Register of Deeds also interprets this to mean that the notary seal itself must stay inside the document margins; that is, the notary seal cannot be placed at the edges of the paper so that it sits inside the one half inch side, bottom and top document margins.

3.   Only black type on white paper can be used.  There was some question early on whether this also meant only black ink could be used for signatures, notaries or insertion of information by hand.  It has been ruled by the Register of Deeds Association that this part of the statute refers only to printed text, not to information inserted and affixed by hand.  Therefore, blue ink is probably still OK.  However, if an ink is used which might be illegible to a document imager or copier, the Register of Deeds may still rule the document to be illegible. It would be best to stick to a dark color ink, such as black ink or blue ink, for information affixed to a document by hand.

4.   The font size of any recorded document cannot be smaller than 10 points.  Blanks in a document may be completed in pen and corrections to an instrument may be made in pen.  See note above about ink color.

5.  The document must NOT be on two-sided paper.  ONLY one side documents containing typed or printed text are allowed.

6.   The document type/name of document must appear at the top of the first page below the blank three inch margin.  

If any document presented for recording does not meet these new formatting options, but meets all other recording statements for document probate, then the Register of Deeds will charge an additional $25.00 penalty fee for recording a "non standard document." 

The only exceptions to these rules are that if the document was executed prior to July 1, 2002, the new document formatting rules do not apply.  Also, if the document fails to meet the font size (10 point) requirement, the Register of Deeds has the discretion to determine whether the document is still legible to record without assessing the $25.00 non conforming fee.  Apparently there is no discretion on the margin requirements.

Notary Acknowledgments:  NC statutes set out specific forms of notary acknowledgment for documents to be recorded in a county Register of Deeds.  Most Register of Deeds have detailed information on these requirements provided to them by the North Carolina Institute of Government, and if the documents do not meet the statutory requirements, the Register of Deeds will almost always reject them for recording.  These statutory forms are mostly found in Chapter 47 of the North Carolina General Statutes. See also the comment about notary acknowledgments under the strict formatting section above.

You are also referred to links with the Durham County Register of Deeds website and the North Carolina Association of Register of Deeds website.

Transfer Taxes

North Carolina collects an excise tax (NCGS 105-228.28 et seq.) on all transfers and conveyances of real property, EXCEPT those transfers and conveyances which are (1) by operation of law, (2) leases, (3) by will or intestacy, (4) gifts, (5) mergers and consolidations, (6) transfers by a governmental unit or (7) transfers where no consideration in property or money is due or paid by the transferee to the transferor.  NOTE:  Tax-free exchanges under Section 1031 of the Internal Revenue Code are not gifts or “no-consideration transfers,” and must therefore pay excise taxes on the value of the exchange.

The excise tax is collected by the Register of Deeds at the time the transfer document is recorded.  The tax is $1.00 for every $500 of consideration, rounded upward to the nearest $500 increment.  The tax is due by statute from the transferor, although the parties can agree that the transferee pay the tax. 

Certain coastal counties have been granted the right by the North Carolina General Assembly to assess a county “land transfer tax” IN ADDITION to the North Carolina excise tax described above.  These counties are Camden, Chowan, Currituck, Dare, Pasquotank, Perquimans and Washington. Others may be added in the future.  The county tax in this counties is equal to 1% of the consideration paid, and includes leasehold transfers which are not otherwise subject to the North Carolina excise tax.

Property Taxes and Assessments

Municipal and county real and personal property taxes are a superior lien against real estate in the county where the property is situated.  Motor vehicle personal property taxes are billed and collected on a totally different schedule, and are NOT liens on real property.  Although taxing entities usually have a July 1-June 30 fiscal year, the tax lien itself arises as of January 1 of the tax assessment year.  Because of the effective date, the North Carolina closing custom is to prorate taxes between buyer and seller on a calendar year basis.  The taxes themselves are usually billed in August or September, and become delinquent if not paid by January 6 of the following year.  For convenience, some counties have consolidated municipal and county tax collections in their county.  However, because this is not a uniform practice, care must be taken to determine if there are separate municipal and county tax collections in a particular county.

Property taxes are the product of the property’s assessed value multiplied by the tax rate for the district where the property is located.  Taxing entities are required to set the tax rates each year by July 1. The property valuation is established by the County tax assessor.  Counties are required to value property at 100% of fair market value, and to conduct county-wide revaluations (to adjust all county property valuations to fair market value) at least once every eight years.  

Municipalities also have the power to assess real property with special improvement assessments as well as cleanup and other types of liens.  These assessments are sometimes in a pending status, sometimes in a confirmed status, and are often collected separately by the municipality even in counties where the property taxes are collected on a unified basis.  Since these municipal improvement assessments are entitled to a priority almost equal to property taxes themselves, the title searcher must take great care to determine whether such special assessments exist and what may be the payment timetable for them.

Title Insurance

North Carolina is an “approved attorney” state.  This means that title insurance and title reports issued on North Carolina real property must be based on an opinion of title issued by a licensed and practicing member of the North Carolina State Bar who is not affiliated with the title insurance company issuing the policy.  Title insurance premiums on North Carolina real property are regulated by the North Carolina Department of Insurance.  The general guide for premium cost is $2.00 per $1,000 of coverage up to $100,000, dropping to $1.50 per $1,000 of coverage up to $300,000, and dropping again about $300,000.  Title companies offer “simultaneous issue,” which means that an owners policy can be secured for the buyer at no additional cost other than for the difference in coverage between the loan and the purchase price.  Title companies also offer discounted rate for refinances, for certain developments, and  “reissue”  rates for new policies where an older policy less than ten years old is presented at the time of title policy application.