Real Estate Industry Legislative Priorities Continue to Advance in Raleigh
Despite the ongoing stalemate over the state budget, legislation supported by the real estate and home building industry continues to make progress in Raleigh. Over the past few weeks, Governor Cooper has signed into law a variety of bills supported by the North Carolina Home Builders Association (NCHBA), the North Carolina Realtors®, NAIOP North Carolina, and other trade groups. Here’s a summary of some of the key laws that will benefit the residential and commercial real estate industries in the years ahead:
HB 675 — 2019 Building Code Regulatory Reform, sponsored by Representatives Mark Brody (R-Union), Dennis Riddell (R-Alamance), Jon Hardister (R-Guilford), and Billy Richardson (D-Cumberland). This is the fifth successful bill over the past several sessions of major reforms to the state building code and inspections process Key provisions in this year’s act include:Prohibits local governments from requiring developers/builders to bury existing power lines or bury relocated power lines that are located outside the subdivision.Prohibits local governments from setting minimum square footage requirements for residential structures.Requires the North Carolina Building Code Council to conduct a cost/benefit analysis for all proposed changes to the North Carolina Energy Conservation Code since January 1, 2018.Requires the North Carolina Building Code Council to create an inspection form to be used by engineers and architects and clarifies that they can inspect foundations and underslabs.Adds a new level of inspector, residential changeout inspector, to assist with minor inspections.Requires that a local government chooses to have plan review that the initial review for residential building plans must be performed within fifteen (15) business days after submission.Requires that a local government can issue a temporary certificate of occupancy if the requirements of the NC Building Code are met.HB 492 — Simplify Builder Inventory Exclusion, sponsored by Representatives Mark Brody (R-Union), Julia Howard (R-Davie), and Brian Turner (D-Buncombe), will eliminate the need for a builder to file annually in order to take advantage of an important property tax exclusion.The new law permits a builder to file a one-time application to claim an exemption from higher property taxes on land and houses held for sale by a builder to the extent that the tax increase is attributable to subdivision of the property or improvements made such as the installation of infrastructure or the construction of a single-family or duplex house on the property.HB 620 — Street Database/Manual/Public Record Exemption, requires the North Carolina Department of Transportation to create a “Public Street Information Database”, by 01/10/20 and update it regularly, for the purpose of conveying the status of roads within the State. This publicly-available database will indicate whether the road is (1) federally owned, (2) State-owned with State road number assigned, or (3) State-maintained with a State road number assigned.SB 355 — Land-Use Regulatory Changes, sponsored by Senators Dan Bishop (R-Mecklenburg), Paul Newton (R-Cabarrus) and Sam Searcy (D-Wake), helps level the playing field between landowners and local governments by integrating permit choice and vesting laws to ensure that the rules are not changed in the middle of a development project. In addition, the law:Protects landowners against 3rd party rezoning effortsAllows certain claims to bypass the Board of Adjustment and proceed to Superior Court.Places limits on conditional zoning abuse, while preserving flexibility for developers.SB 523 — Revenue Laws Clarifying & Administrative Changes, requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.