NORTH CAROLINA GENERAL ASSEMBLY
1967 SESSION

CHAPTER 861
HOUSE BILL 907

AN ACT TO PROVIDE FOR THE EFFECTIVENESS OF AFTER-ACQUIRED PROPERTY CLAUSES AFFECTING REAL ESTATE.

The General Assembly of North Carolina do enact:

Section 1.  Chapter 47 of the General Statutes is hereby amended by inserting therein, immediately after § 47-20, the following Section:
"§ 47-20.1.  Real Property; Effectiveness of After-Acquired Property Clause. (a) As used in this Section, 'after-acquired property clause' means any provision or provisions in an instrument which create a security interest in real property acquired by the grantor of the instrument subsequent to its execution.
"(b)	As used in this Section, 'after-acquired property', and 'property subsequently acquired' mean any real property which the grantor of a security instrument containing an after‑acquired property clause acquires subsequent to the execution of such instrument, and in which the terms of the after-acquired property clause would create a security interest.
"(c)	An after-acquired property clause is effective to pass after-acquired property as against lien creditors or purchasers for a valuable consideration from the grantor of the instrument containing the after-acquired property clause only from the time of registration of the instrument as provided in this Article. It is then effectively registered as to real property subsequently acquired for a period of not more than five years from such registration, unless there is an extension as provided in subsection (d); provided, however, that such five-year limitation shall not apply to an after-acquired property clause in an instrument which creates a security interest made by a public utility as defined in G.S. 62-3(23) or by electric or telephone membership corporations incorporated or domesticated in North Carolina.
"(d)	The effectiveness of the registration of an after-acquired property clause may be extended by the registration of a notice of extension. A notice of extension may be registered within six months prior to the expiration of the five-year period specified in subsection (c). Upon the timely registration of a notice of extension, the effectiveness of the registration of the after-acquired property clause is continued for five years after the last date to which the registration was effective, whereupon it becomes ineffective as provided in subsection (c) unless another notice of extension is registered.
"(e)	The notice of extension shall
(1)	Show that effective registration of the after-acquired property clause is extended,
(2)	Include the names of the parties to the instrument containing the after-acquired property clause,
(3)	Refer to the book and page where the instrument containing the after-acquired property clause is registered, and
(4)	Be signed by the grantee or the person secured by the instrument containing the after-acquired property clause or his successor in interest.
"(g)	The Register of Deeds shall index the notice of extension in the same manner as the instrument containing the after-acquired property clause."
Sec. 2.  All laws and clauses of laws in conflict with this Act are hereby repealed.
Sec. 3.  This Act shall become effective at midnight on June 30, 1967. It applies to all instruments registered after that date.
In the General Assembly read three times and ratified, this the 21st day of June, 1967.