§ 47-20.5. Real property; effectiveness of after-acquired property clause.
§47‑20.5. Real property; effectiveness of after‑acquired propertyclause.
(a) As used in thissection, "after‑acquired property clause" means any provisionor provisions in an instrument which create a security interest in realproperty acquired by the grantor of the instrument subsequent to its execution.
(b) As used in thissection, "after‑acquired property," and "propertysubsequently acquired" mean any real property which the grantor of asecurity instrument containing an after‑acquired property clause acquiressubsequent to the execution of such instrument, and in which the terms of theafter‑acquired property clause would create a security interest.
(c) An after‑acquiredproperty clause is effective to pass after‑acquired property as betweenthe parties to the instrument containing such clause, but shall not beeffective to pass title to after‑acquired property as against liencreditors or purchasers for a valuable consideration from the grantor of theinstrument unless and until such instrument has been registered or reregisteredat or subsequent to the time such after‑acquired property is acquired bysuch grantor and the deed to the grantor of the after‑acquired propertyis registered.
(d) In lieu ofreregistering the instrument containing the after‑acquired propertyclause as specified in subsection (c), such instrument may be made effective topass title to after‑acquired property as against lien creditors andpurchasers for a valuable consideration from the grantor of the instrument byregistering a notice of extension as specified in subsection (e) at orsubsequent to the time of acquisition of the after‑acquired property bythe grantor.
(e) The notice ofextension shall
(1) Show that effectiveregistration of the after‑acquired property clause is extended,
(2) Include the names ofthe parties to the instrument containing the after‑acquired propertyclause,
(3) Refer to the bookand page where the instrument containing the after‑acquired propertyclause is registered, and
(4) Be signed by thegrantee or the person secured by the instrument containing the after‑acquiredproperty clause or his successor in interest.
(f) The register ofdeeds shall index the notice of extension in the same manner as the instrumentcontaining the after‑acquired property clause.
(g) Except as providedin subsection (h) of this section, no instrument which has been heretoforeexecuted or registered and which contains an after‑acquired propertyclause shall be effective to pass title to after‑acquired property asagainst lien creditors or purchasers for a valuable consideration from thegrantor of such instrument unless and until such instrument or a notice ofextension thereof has been registered or reregistered as herein provided.
(h) Notwithstanding theprovisions of this section with respect to registration, reregistration andregistration of notice of extension, an after‑acquired property clause inan instrument which creates a security interest made by a public utility asdefined in G.S. 62‑3(23) or a natural gas company as defined in section2(6) of the Natural Gas Act, 15 U.S.C.A. 717a(6), or by an electric ortelephone membership corporation incorporated or domesticated in North Carolinashall be effective to pass after‑acquired property as against liencreditors or purchasers for a valuable consideration from the grantor of theinstrument from the time of original registration of such instrument. (1967,c. 861, s. 1; 1969, c. 813, ss. 1‑3; 1997‑386, s. 1.)