For Those That Are Fighting NC Bill 725 (Anti Sub-To Legislation)
I just received this from Lindsay Wrenn, who is helping out with fighting the North Carolina Bill 725
Joel,
I received confirmation from Gardner Payne, our lobbyist in Raleigh that HB725 is dead for this session of the General Assembly. We are to receive a summary report in the next week or so and the Coalition is moving ahead with its plans to maintain an ongoing structure at the state level. Also, we are developing an ethics component to REIA membership that should exempt members in "good standing" from the more onerous provisions of the bill as originally written. Thought you might pass this on to the Creative Investor community.
Lindsey Wrenn
Joel,
Thank you for the update.
David
Will the summary be available here?
What is the next step for next session?
Thanks
[addsig]
Joel,
So if I become a Card Carrying Member meaning I Pay their dues, which makes me a member in good standing, listen to the course writters selling their products at their meeetings, hold my hand over my heart and swear to abide by the ethics of this REIA then I can do creative deals in North Carolina?
No thanks, I think I will stand by my record of 500+ deals, no Attorney General complaints, no DOS clause invoked and many letters from all the folks I helped thanking me.
Sounds like join our Make A Buck Union and you can work in North Carolina. Since some of the powers that be in NC listen when we talk I will pass this along.
John $Cash$ Locke
[addsig]
Joel,
They already have an entity set up in North Carolina, it is called the Real Estate Commission, become a Broker and get creative as you like, just disclose what you are doing.
I am just opposed to any self serving organization that would have that much power without some type of regulation other than their own people. Who will be checking the checker so to speak.
I know you are only the messenger, so I did not mean to shoot the messenger.
John $Cash$ Locke
[addsig]
The NC house bill 725 provides exemptions
(b) This Article shall not apply to the following:....
(1) Any real estate resale transaction exempted from the preemption provisions of the due on sale clause prohibitions pursuant to 12 U.S.C. ? 1701j 3(d).
which besides other exemptions states... "a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property"
In addition, NC has a new article regarding land trusts (THEY ARE ABSOLUTELY LEGAL IN NORTH CAROLINA):
SESSION LAW 2005-192
SENATE BILL 679
AN ACT to adopt a revised version of the uniform trust code for north carolina.
The General Assembly of North Carolina enacts:
SECTION 1. Article 1 of Chapter 36A of the General Statutes is recodified as Article 7 of Chapter 32 of the General Statutes. G.S. 36A‑63, G.S. 36A‑66.1, and Article 6 of Chapter 36A are recodified in Article 14 of Chapter 53 of the General Statutes as G.S. 53‑163.1 through G.S. 53‑163.7. The remainder of Chapter 36A of the General Statutes is repealed.
SECTION 2. The General Statutes are amended by adding a new Chapter to read:
"Chapter 36C.
"North Carolina Uniform Trust Code.
"Article 1.
"General Provisions and Definitions.
"? 36C‑1‑101. Short title.
This Chapter may be cited as the North Carolina Uniform Trust Code.
"? 36C‑1‑102. Scope.
This Chapter applies to any express trust, private or charitable, with additions to the trust, wherever and however created. The term "express trust" includes both testamentary and inter vivos trusts, regardless of whether the trustee is required to account to the clerk of superior court. This Chapter also applies to any trust created for or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. This Chapter does not apply to constructive trusts, resulting trusts, conservatorships, estates, trust accounts as defined in G.S. 53‑146.2, 54‑109.57, 54B‑130, and 54C‑166, trust funds subject to G.S. 90‑210.61, custodial arrangements under Chapter 33A of the General Statutes and Chapter 33B of the General Statutes, business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind, or any arrangement under which a person is nominee or escrowee for another.
Secrecy in and of itself is not fraud unless intended to defraud. Fraud is based upon intent. Using a Trust to deceive the lender is fraud.
[addsig]
John,
Show me one case where a Land Trust has ever violated the DOSC. One case. You admit you know nothing about them and you are proving it.
John,
You already knew this:
The NC house bill 725 provides exemptions
(b) This Article shall not apply to the following:....
(1) Any real estate resale transaction exempted from the preemption provisions of the due on sale clause prohibitions pursuant to 12 U.S.C. ? 1701j 3(d). which besides other exemptions states... "a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property"
Quote: This Article shall not apply to ... Any real estate resale transaction [protected by] 12 U.S.C. ? 1701j 3(d).
ALSO:
SESSION LAW 2005-192
SENATE BILL 679
AN ACT to adopt a revised version of the uniform trust code for north carolina. The General Assembly of North Carolina enacts:
SECTION 1. Article 1 of Chapter 36A of the General Statutes is recodified as Article 7 of Chapter 32 of the General Statutes. G.S. 36A‑63, G.S. 36A‑66.1, and Article 6 of Chapter 36A are recodified in Article 14 of Chapter 53 of the General Statutes as G.S. 53‑163.1 through G.S. 53‑163.7. The remainder of Chapter 36A of the General Statutes is repealed.
SECTION 2. The General Statutes are amended by adding a new Chapter to read:
"Chapter 36C.
"North Carolina Uniform Trust Code.
"Article 1.
"General Provisions and Definitions.
This Chapter may be cited as the North Carolina Uniform Trust Code.
"? 36C‑1‑102. Scope.
This Chapter applies to any express trust, private or charitable, with additions to the trust, wherever and however created. The term "express trust" includes both testamentary and inter vivos trusts, regardless of whether the trustee is required to account to the clerk of superior court. This Chapter also applies to any trust created for or determined by judgment or decree under which the trust is to be administered in the manner of an express trust. This Chapter does not apply to constructive trusts, resulting trusts, conservatorships, estates, trust accounts as defined in G.S. 53‑146.2, 54‑109.57, 54B‑130, and 54C‑166, trust funds subject to G.S. 90‑210.61, custodial arrangements under Chapter 33A of the General Statutes and Chapter 33B of the General Statutes, business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts, dividends, interest, salaries, wages, profits, pensions, or employee benefits of any kind, or any arrangement under which a person is nominee or escrowee for another.
North Carolina law makes land trusts exempt from that act, John. They have to. Rich people use trusts. Politicians use trusts. Yes they do so for privacy reasons and because they have the money and money is power, the land trust will NEVER be a DOSC violation. Banks owe their loyalty to their biggest depositors.
Da Wiz
Once case, John. One case. Stand to Post.
mtnwizard,
I not only agree with your methods, but have used land trusts here in California for over ten years.
However in my experience/opinion,since the seller/co-beneficiary holding 10% beneficial interest in the trust, has no INTENTION of dealing with the property whatsoever, and is sort of going along with the transaction in order to make a few bucks, the transaction may be construed by some as a violation of the DOSC.
[ Edited by Darryle-CA on Date 03/11/2006 ]
mtnwizard
Did you know that it is possible to successfully avoid paying (pre- recorded) federal, state , child support and judgement liens against the former owner when utilizing a land trust?
Darryle-CA,
Sorry then let me rephrase, if you put your house in a Land Trust then we do not need NASA, because it is "possible" to fly to the Moon all on your own.
Anything is possible but I would like to see you say "here is how it is done, so you do not have to pay the liens or encumbrances (espeicially IRS and Federally regulated Child support attachments), which attached to a property prior to a Land Trust you do this...
John $Cash$ Locke
[addsig]
John $Cash$ Locke,
For a second time, I said that it is possible to avoid paying liens recorded against the owner. I did not say that it is possible to avoid paying liens which have been recorded and have attached to a property prior to putting said property in a Land Trust.
Example:
Lets say you’ve come across a seller who,
1. Owns a property worth $400,000.00
2. It has a first loan recorded against it in the amount of $150,000.00
3. It has a second loan recorded against it in the amount of $30,000.00
4. There is a judgement recorded against the seller in the amount of $500,000.00
In the above example most investors would walk away from the deal, believing that there is no equity to work with.
This is how I would use two land trusts to avoid paying the $500,000.00 judgement.
1. I would create two land trusts, one for my benefit and one for the seller’s benefit. Let’s call mine’s Trust “A” and the seller’s Trust “B”.
2. Then, I would have the seller transfer his property to Trust “B”.
3. Next, I would have the seller assign (for a fee of course) 100% beneficial interest in his Trust “B” to my Trust “A”.
4. Finally I would sell the property from my Trust “A” to a subsequent buyer.
Why do all this?
Because here in California title companies only run checks on the current owner and the most recent previous owner. Therefore since Trust “B” would be the most recent previous owner prior to my interest, no liens would appear against Trust “B” and I as beneficiary of Trust”A” would take title to the subject property free from any liens against the afore-mentioned seller.
I am locking this topic. As I think we have all the information we need on what ideas we have on the topic.