North Carolina General Statutes 45-45.3. Trustee in a deed of trust
(a) The following definitions apply in this section:
(1) Secured creditor. – The holder, owner, or assignee of the obligation secured by a deed of trust.
Terms Used In North Carolina General Statutes 45-45.3
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Case law: The law as laid down in cases that have been decided in the decisions of the courts.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Dismissal: The dropping of a case by the judge without further consideration or hearing. Source:
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- property: shall include all property, both real and personal. See North Carolina General Statutes 12-3
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Trustee: A person or institution holding and administering property in trust.
(2) Trustee. – The trustee or substitute trustee then serving as such under the terms of a deed of trust.
(b) Unless the deed of trust provides otherwise, all of the following may be done without the knowledge, consent, or joinder of the trustee:
(1) Pursuant to N.C. Gen. Stat. § 45-36.23, an obligation may be declared by the owner and holder of the obligation to be no longer secured by the deed of trust.
(2) Property may be released from the lien of a deed of trust by the secured creditor.
(3) The lien of a deed of trust may be released or subordinated by the secured creditor.
(4) The terms of a deed of trust may be modified by the secured creditor and the then record owner of the property encumbered by the lien of the deed of trust.
(5) The deed of trust may be satisfied of record by the secured creditor.
(c) Except in matters relating to the foreclosure of the deed of trust or the exercise of a power of sale under the terms of the deed of trust, the trustee is neither a necessary nor a proper party to any civil action or proceeding involving (i) title to the real property encumbered by the lien of the deed of trust or (ii) the priority of the lien of the deed of trust. Examples of civil actions or proceedings in which the trustee is neither a necessary nor a proper party include, but are not limited to, civil actions or proceedings relating to:
(1) Condemnation.
(2) Bankruptcy.
(3) The establishment or correction of title to real property, including, but not limited to, actions to quiet title, reform land records, or resolve boundary line disputes.
(4) Fraudulent conveyances.
(5) The creation or enforcement of an attachment or judgment lien.
(6) The foreclosure of a lien other than the lien of the deed of trust, regardless of whether the lien is superior or subordinate to the lien of the deed of trust, including, but not limited to, the foreclosure of mortgages, other deeds of trust, tax liens, and assessment liens.
(7) The establishment, perfection, or enforcement of a mechanic’s or materialman’s lien.
(8) The creation or enforcement of a constructive trust, resulting trust, or equitable lien relating to the property.
(9) The partition of real property.
(10) The interpretation or enforceability of a will, trust, or estate.
(11) A subrogation claim or other equitable claim or defense involving the priority or enforceability of a deed of trust.
(12) Determination or enforcement of rights and obligations involving easements or restrictive covenants.
(d) If a trustee is improperly joined as a party to an action or proceeding when this section provides that the trustee is neither a necessary nor a proper party to that action or proceeding, then:
(1) Upon motion duly made by any party to the action or proceeding, the trustee shall be dismissed from the action or proceeding;
(2) Regardless of whether the trustee makes an appearance in the action or proceeding, no entry of a default or default judgment shall be entered against the trustee; and
(3) If the trustee makes an appearance in the action or proceeding, each person who improperly joined the trustee as a party to the action or proceeding shall be jointly and severally liable to the trustee for all the expenses and costs incurred by the trustee in the defense of the action or proceeding or in obtaining the trustee’s dismissal from the action or proceeding, including the reasonable attorneys’ fees actually incurred by the trustee.
(e) Except as expressly provided in this section, this section is not in derogation of case law and statutory provisions that vest legal title to property conveyed by a deed of trust in the trustee named therein. (2011-312, s. 15.)