Alcoholic Beverage Commission - As introduced, changes from March 1 to February 15 the date by which the executive director of the commission must file an annual report concerning rules promulgated during the prior year with the appropriate standing committees of the general assembly. - Amends TCA Title 57.

114th Regular Session (2025-2026) Introduced by Michele Carringer

HB 642 preserves certain residential covenants from MRTA extinguishment, keeping them enforceable with land unless overridden by their terms or other law.

Taken off notice for cal in s/c Departments & Agencies Subcommittee of State & Local Government Committee

#alcoholicbeveragecommission

Purpose / Intent

HB 642 clarifies and narrows how the Marketable Record Title Act (MRTA) treats recorded restrictive covenants. Specifically, it makes certain residential-use restrictive covenants and covenants tied to common-interest communities immune from extinguishment under the MRTA’s 30‑year marketable-record-title rule, ensuring those covenants continue to run with the land unless otherwise removed by their own terms or other law.

Key provisions

Amends G.S. 47B‑3 (exceptions to marketable record title) to explicitly preserve:

Restrictive covenants that are part of a general or uniform scheme of development and that restrict property to residential use — including single‑family and multifamily development — provided the covenants are otherwise enforceable.
Existing statutory exceptions (e.g., Torrens‑registered property) remain in place.

Adds express protection for covenants contained in declarations applicable to:

Condominiums (Chapter 47A or 47C),
Cooperatives (as defined in Chapter 47F),
Planned communities governed by Chapter 47F — with a caveat that for planned communities created before Jan 1, 1999, the exemption applies only if the community is governed by an owners’ association in existence as of July 1, 2022.

Retains other MRTA exceptions and otherwise leaves the MRTA’s 30‑year extinguishment framework intact for rights not specifically preserved by the bill.

Effective date: the act becomes effective when it becomes law.

Who is affected

Property owners and prospective buyers: certain recorded residential-use restrictions will continue to bind property even if older than 30 years.

Homeowners associations, condominium and cooperative associations, and developers: strengthens long‑term enforceability of many recorded community covenants.

Title examiners and title insurers: may see an expanded set of encumbrances that must be reviewed and insured against; title searches may need to make specific checks for these preserved covenant categories.

Local governments and lenders: potential implications for land use, financing, and resale when covenants survive MRTA extinguishment.

Practical impact and considerations

The bill reduces the risk that long‑standing recorded residential covenants will be lost under the MRTA’s 30‑year rule, supporting predictability for neighborhood controls and community governance.

Buyers should ensure thorough title review for preserved covenants; sellers and HOAs should note continued enforceability.

The limited grandfathering rule for older planned communities (pre‑1999) tied to the existence of an owners’ association as of July 1, 2022 may produce case‑by‑case eligibility questions and potential litigation over applicability.

This bill is primarily procedural/statutory — it changes how recorded covenants interact with the MRTA rather than creating new covenants or enforcement mechanisms.

Bill

Summary — HB 642: Marketable Title Act — Restrictive Covenants

Purpose / Intent

Key provisions

Who is affected

Practical impact and considerations

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