North Carolina General Statutes 39-6.6. Subordination agreements
(a) A subordination agreement shall be given effect in accordance with its terms and is not required to state any interest rate, principal amount secured, or other financial terms.
(b) The trustee of a deed of trust shall not be a necessary party to a subordination agreement unless the deed of trust provides otherwise.
(c) For purposes of N.C. Gen. Stat. § 1-47, a subordination agreement is deemed a conveyance of an interest in real property.
(d) This section is not exclusive. No subordination agreement that is otherwise valid shall be invalidated by this section.
(e) This section applies to a subordination agreement regardless of when the agreement was signed by the party or parties thereto, except that this section does not apply to an agreement that (i) is the subject of litigation pending on the effective date of this subsection, and (ii) was filed or recorded before October 1, 2003.
(f) In this section:
(1) “Interest in real property” includes all rights, title, and interest in and to land, buildings, and other improvements of an owner, tenant, subtenant, secured lender, materialman, judgment creditor, lienholder, or other person, whether the interest in real property is evidenced by a deed, easement, lease, sublease, deed of trust, mortgage, assignment of leases and rents, judgment, claim of lien, or any other record, instrument, document, or entry of court.
Terms Used In North Carolina General Statutes 39-6.6
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- 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.
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3
- Trustee: A person or institution holding and administering property in trust.
(2) “Subordination agreement” means a written commitment or agreement to subordinate or that subordinates an interest in real property signed by a person entitled to priority. (2003-219, s. 1; 2005-212, s. 1.)