NORTH CAROLINA GENERAL ASSEMBLY

1979 SESSION

 

 

CHAPTER 773

SENATE BILL 850

 

 

AN ACT SPECIFYING WHICH REAL PROPERTY WARRANTIES ARE CONTRACTS FOR INSURANCE.

 

The General Assembly of North Carolina enacts:

 

Section 1.  Chapter 58 of the General Statutes is amended by adding a new section to read:

"§ 58-3.2.  Real property warranties. — Any warranty relating to tangible personal property or fixtures to real property issued in connection with the sale of real property by a person as defined in this Article shall be a contract of insurance, except the following, which shall not be contracts of insurance:

(1)        a warranty made by a builder or seller of the real property;

(2)        a warranty incidental to the sale of real property providing for the repair or replacement of the items covered by the warranty for defective parts and mechanical failure or resulting from ordinary wear and tear, which warranty excludes from its coverage damage from recognizable perils such as fire, flood, and wind, which perils do not relate to any defect in the items covered nor result from ordinary wear and tear."

Sec. 2.  Any person, firm, or corporation issuing warranties allowed under G.S. 58‑3.2(2) shall post a surety bond with the Secretary of State in the principal sum of not less than seventy-five thousand dollars ($75,000); such bond shall be approved by the Secretary of State and any person to whom the warranty is issued shall have the right to institute an action to recover against the warrantor and the surety bond for breach of warranty.

Sec. 3.  This act shall become effective July 1, 1979.

In the General Assembly read three times and ratified, this the 4th day of June, 1979.