This column was submitted by my partners, Cynthia Jones and Chris Gelwicks.
Q. Does a copy of the CC&R’s have to be given to the buyer by an attorney at closing? A friend says that’s the law and if they aren’t provided they can sue to get out of the contract. Is that true?
A: CC&R’s is the common abbreviation used to describe the recorded Declaration of Covenants, Conditions and Restrictions for a planned community or condominium. The CC&R’s contain the covenants that can restrict what a person can or cannot do on their own property and usually contain the foundation for the forming of a homeowners association and provided for the collection of assessments or dues.
These CC&R’s “run with the land,” which means that each owner of the property is subject to the restrictions. Since these restrictions are recorded at the Register of Deeds, they provide constructive notice to the entire world of their existence. This means that every buyer of property is deemed to know of the CC&R’s existence and contents, even if that buyer has never read them or has never been told of their existence.
There is no statutory requirement that the seller or closing attorney disclose the existence or content of the CC&R’s to a new buyer. The standard North Carolina contract contains a provision whereby this information may be disclosed to new owners; however, nothing on that form requires disclosure of the CC&R’s.
While there are addendums to the standard contract that provide the seller may provide copies to the buyer, there is no requirement for them to do so. The responsibility for obtaining this information is on the buyer. If you are purchasing property and you suspect you may be a part of a planned community or condominium, you should specifically discuss this with your closing attorney during due diligence. The closing attorney can get a fully recorded copy of the CC&R’s for you to review.
While there are some protections offered by contract to at least inform you of whether the property is subject to CC&R’s, the general rule of “buyer beware” still controls these transactions. Buyers and their attorneys should be thorough during the due diligence period to obtain and carefully review all the CC&R’s and related information.
Charlotte attorney Michael Hunter represents community and condominium associations for the firm of Horack Talley. Email questions to firstname.lastname@example.org. Not every question receives a reply. Find his blog at www.CarolinaCommonElements.com.