Carolinian
TUG Member
Most of the out of state t/s closing companies use laymen to prepare deeds, and seem to do so based on forms that are adequate in the states where they are located but may or may not be adequate elsewhere. Some claim to be ''attorney reviewed'' but again, this is invaribly an out of state attorney and the level of ''review'' may be questionable. The only exception I have seen is a new closing firm, PCS Holdings (which I have no connection to and do not know the owners) which says it uses licensed attorneys from the state in which the timeshare is located, and on its website limits the states in which it will do a closing which tells me they are probably truthful in that statement.
There are several extremely common errors on deeds filed by out of state closing companies in North Carolina which completely void deeds, even if they get recorded and recognized by ts management. I will not deal with those, but with another very common error that can cause problems even if the rest of the deed is proper and valid.
Many people want to hold a timeshare as a joint tenancy, the most important feature of which is that if one party dies, his/her interest automatically passes to the other joint tenant(s) by operation of law. Otherwise, in a tenacy in common, the interest of the deceased party passes under their will or if there is no will under the intestate succession statutes. Usually those seeking a joint tenancy status are husband and wife.
The out of state timeshare closing companies simply plug in the standard joint tenancy language applicable in their state. The kicker in North Carolina is that in a past century, the legislature adopted a statute that is still on the books that abolished joint tenancy in the state. So the language that the closing company uses does nothing, and their clients who think they have a joint tenancy really end up with a tenancy in common. A North Carolina attorney would have advised them that there are two ways they could have accomplished what they wanted. In the 19th century, the state Supreme Court did an end run around the legislature and ruled that one could still in effect create a joint tenancy by contract if they used very specific language in the deed (the closing company language doesn't comply) in spite of the statute. The other simpler thing to do is create a tenancy by the entirety, which can only be between a married couple but only takes insertion of one word (and, no it is not ''entirety'') in the deed, and has the same key attibutes as a joint tenancy.
What problems could having a tenancy in common present? If one party dies, and leaves no will, their interest passes under NC Intestate Succession laws to their spouse and children in undivided interests. To get the property back to the surviving spouse or to sell to a third person would require collecting the signatures of all of the children and their spouses on a deed. Yeah, a little extra work, you may say, but doable. However, if one of more of the children is under 18, they cannot execute a valid deed. To convey their interest will require a special proceeding before the Clerk of Superior Court and review by a Superior Court judge. That is going to create more hassles and costs, especially if said child, as likely in a t/s situation, lives outside the state.
Using an out of state closing company that does not use local attorneys for drawing legal documents is just asking for trouble down the road. This example also assumes the deeds prepared by the out-of-state closing company are valid in the first place, which from my own observation, they are often not. Often a call to the t/s manager can obtain a reference to a local attorney who will handle the transaction properly in full compliance with local law.
There are several extremely common errors on deeds filed by out of state closing companies in North Carolina which completely void deeds, even if they get recorded and recognized by ts management. I will not deal with those, but with another very common error that can cause problems even if the rest of the deed is proper and valid.
Many people want to hold a timeshare as a joint tenancy, the most important feature of which is that if one party dies, his/her interest automatically passes to the other joint tenant(s) by operation of law. Otherwise, in a tenacy in common, the interest of the deceased party passes under their will or if there is no will under the intestate succession statutes. Usually those seeking a joint tenancy status are husband and wife.
The out of state timeshare closing companies simply plug in the standard joint tenancy language applicable in their state. The kicker in North Carolina is that in a past century, the legislature adopted a statute that is still on the books that abolished joint tenancy in the state. So the language that the closing company uses does nothing, and their clients who think they have a joint tenancy really end up with a tenancy in common. A North Carolina attorney would have advised them that there are two ways they could have accomplished what they wanted. In the 19th century, the state Supreme Court did an end run around the legislature and ruled that one could still in effect create a joint tenancy by contract if they used very specific language in the deed (the closing company language doesn't comply) in spite of the statute. The other simpler thing to do is create a tenancy by the entirety, which can only be between a married couple but only takes insertion of one word (and, no it is not ''entirety'') in the deed, and has the same key attibutes as a joint tenancy.
What problems could having a tenancy in common present? If one party dies, and leaves no will, their interest passes under NC Intestate Succession laws to their spouse and children in undivided interests. To get the property back to the surviving spouse or to sell to a third person would require collecting the signatures of all of the children and their spouses on a deed. Yeah, a little extra work, you may say, but doable. However, if one of more of the children is under 18, they cannot execute a valid deed. To convey their interest will require a special proceeding before the Clerk of Superior Court and review by a Superior Court judge. That is going to create more hassles and costs, especially if said child, as likely in a t/s situation, lives outside the state.
Using an out of state closing company that does not use local attorneys for drawing legal documents is just asking for trouble down the road. This example also assumes the deeds prepared by the out-of-state closing company are valid in the first place, which from my own observation, they are often not. Often a call to the t/s manager can obtain a reference to a local attorney who will handle the transaction properly in full compliance with local law.
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