GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 849

 
 
Short Title:	Judicial & Execution Sales/Revise Procedure.	()	
Sponsors:	Representative Culpepper.	
Referred to:	Judiciary II.	
March 29, 2001

A BILL TO BE ENTITLED
AN ACT to amend the law governing judicial sales and execution sales to provide for a rolling upset bid procedure and to conform the time periods for posting and publishing notice of sale to the law governing foreclosure sales under a power of sale.

The General Assembly of North Carolina enacts:
part i.  judicial sales.
SECTION 1.  G.S. 1‑339.3(b) reads as rewritten:
"(b)	The procedure prescribed by this Article applies to all sales ordered by a judge of the superior or district court, except that the  judge having jurisdiction may, upon a finding and a recital in the order of sale of the necessity or advisability thereof, vary the procedure from that herein prescribed, but not inconsistently with G.S. 1‑339.6 restricting the place of sale of real property."
SECTION 2.  G.S. 1‑339.8 reads as rewritten:
"§ 1‑339.8.  Public sale of separate tracts in different counties.
(a)	When an order of public sale directs the sales of separate tracts of real property situated in different counties, exclusive jurisdiction over the sale remains in the superior or district court of the county where the proceeding, in which the order of sale was issued, is pending, but there shall be a separate advertisement, sale and report of sale with respect to the property in each county. In any such sale proceeding, the clerk of the superior court of the county where the original order of sale was issued has jurisdiction with respect to upset bids submitted for separate tracts of property situated in other counties as well as in the clerk's own county. When the public sale is by auction an upset bid may be filed only with that clerk.
(b)	The report of sale with respect to all sales of separate tracts situated in different counties shall be filed with the clerk of the superior court of the county in which the order of sale was issued, and is not required to be filed in any other county.
(c)	When the public sale is by auction, the sale  of each separate tract shall be subject to separate upset bids. To the extent deemed necessary by the judge or clerk of court of the county where the original order of sale was issued, the sale of each tract shall be treated as a separate sale.
(d)	When real property is sold in a county other than the county where the proceeding, in which the sale was ordered, is pending, the person authorized to hold the sale shall cause a certified copy of the order of confirmation to be recorded in the office of the register of deeds of the county where such property is situated, and it shall not be necessary for the clerk of court to probate said certified copy of the order of confirmation."
SECTION 3.  G.S. 1‑339.17 reads as rewritten:
"§ 1‑339.17.  Public sale; posting and publishing notice of sale of real property.
(a)	Subject to subsection (d) of this section, notice of public sale of real property  shall:
(1)	Be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the property is situated, for at least 20 days immediately preceding the sale; and
(2)	Be published once a week for at least two successive weeks:
a.	In a newspaper qualified for legal advertising  published in the county; or
b.	If no newspaper qualified for legal advertising is published in the county,  in a newspaper having general circulation in the county.
(b)	When the notice of public sale is published in a newspaper:
(1)	The period from the date of the first publication to the date of the last publication, both dates inclusive, shall not be less than seven days, including Sundays; and
(2)	The date of the last publication shall be not more than 10 days preceding the date of the sale in a sale by auction or the date on which sealed bids are opened in a sale by sealed bid.
(c)	When the real property to be sold is situated in more than one county, the provisions of subsections (a) and (b) of this section shall be complied with in each county in which any part of the property is situated.
(c1)	When the public sale is a sale of timber by sealed bid, the notice shall also be given in writing, not less than 21 days before the date on which bids are opened, to a reasonable number of prospective timber buyers, which in all cases shall include the timber buyers listed in the office of the Division of Forest Resources for the county or counties in which the timber to be sold is located.
(d)	In addition to the other requirements of this section, the notice of public sale shall be  posted or the sale shall be  advertised as may be required by the judge or clerk pursuant to the provisions of G.S. 1‑339.13(b)(2).
(e)	If the sale is a sale of timber by sealed bid, the person holding the sale shall include in the report required by G.S. 1‑339.24 an affidavit showing that the requirements of this section have been complied with and listing all the persons notified pursuant to subsection (c1) of this section."
SECTION 4.  G.S. 1‑339.25 reads as rewritten:
"§ 1‑339.25.  Public sale; upset bid on real property; compliance bond.
(a)	An upset bid is an advanced, increased, or raised bid in a public sale by auction whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price or the last upset bid by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). Subject to the provisions of subsection (b) of this section, an upset bid shall be made by delivering to the clerk of superior court, with whom the report of the sale or the last notice of upset bid was filed, a deposit in cash or by certified check or cashier's check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court with whom the report of sale or the last notice of upset bid was filed, by the close of normal business hours on the tenth day after the filing of the report of sale or the last notice of upset bid, and if the tenth day falls upon a Sunday or legal holiday or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the notice of upset bid may be filed on the day following when the office is open for the regular dispatch of its business. Except as provided in G.S. 1-339.27A and G.S. 1-339.30, there shall be no resales; however, there may be successive upset bids, each of which shall be followed by a period of 10 days for a further upset bid. When an upset bid or a motion for resale under G.S. 1-339.27A is not filed within 10 days following a sale, resale, or prior upset bid, the rights of the parties to the sale or resale become fixed.(b)	The clerk of the superior court may require an upset bidder or the highest bidder at a resale held under G.S. 1-339.30 also to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond, approved by the  clerk. The compliance bond shall be in the amount the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond, less the amount of any required deposit. The compliance bond shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor's compliance with the bid.		(d1)	At the time that an upset bid on real property is submitted to the court as provided in subsection (a) of this section, together with a compliance bond if one is required, the upset bidder shall file with the clerk a notice of upset bid. The notice of upset bid shall:
(1)	State the name, address, and telephone number of the upset bidder;
(2)	Specify the amount of the upset bid;
(3)	Provide that the sale shall remain open for a period of 10 days after the date on which the notice of upset bid is filed for the filing of additional upset bids as permitted by law; and
(4)	Be signed by the upset bidder or the attorney or the agent of the upset bidder.
(d2)	When an upset bid is made as provided in this section, the clerk shall notify the person holding the sale who shall thereafter mail a written notice of upset bid by first-class mail to the last known address of the last prior bidder and the current record owners of the property.
(d3)	When an upset bid is made as provided in this section, the last prior bidder, regardless of how the bid was made, shall be released from any further obligation on account of the bid, and any deposit or bond provided by the last prior bidder shall be released.
(d4)	Any person offering to purchase real property by upset bid as permitted in this Article shall be subject to and bound by the terms of the original notice of sale except as modified by court order or the provisions of this Article.
(d5)	The clerk of superior court shall make all orders as may be just and necessary to safeguard the interests of all parties and may fix and determine all necessary procedural details with respect to upset bids in all instances in which this Article fails to make definite provisions as to that procedure.
(e)	The provisions of this section do not apply to public sales of timber by sealed bid."
SECTION 5.  G.S. 1‑339.26 reads as rewritten:
"§ 1‑339.26.  Public sale by auction; separate upset bids when real property sold in parts; subsequent procedure.
When real property is sold at public sale by auction in parts, as provided by G.S. 1‑339.9, the sale of any part shall be subject to a separate upset bid; and, to the extent the judge or clerk of court having jurisdiction deems advisable, the sale of each part shall thereafter be treated as a separate sale for the purpose of determining the  applicable procedure."
SECTION 6.  G.S. 1‑339.27 is repealed.
SECTION 7.  Article 29A of Chapter 1 of the General Statutes is amended by adding a new section to read:
"§ 1-339.27A.  Ordering resale of real property after upset bid.
Upon motion of an interested person and for good cause, the judge or clerk having jurisdiction may order a resale of real property when an upset bid is submitted as provided in G.S. 1-339.25. If the motion is granted, the procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale. If the motion is denied, the 10-day period for subsequent upset bids begins upon the entry of the order."
SECTION 8.  G.S. 1‑339.30 reads as rewritten:
"§ 1‑339.30.  Public sale; failure of bidder to make cash deposit or to comply with bid; resale.
(a)	If an order of public sale by auction requires the highest bidder to make a cash deposit at the sale, and the highest bidder fails to make the required deposit, the person holding the sale shall at the same time and place again offer the property for sale.
(a1)	If an order of public sale of timber by sealed bid requires the highest bidder to make a cash deposit and the bidder fails to make the required deposit within the time specified in the order, the judge or clerk having jurisdiction may direct that the timber be sold to the person who submitted the next highest bid or may order a resale. The procedure for a resale is the same in every respect as is provided by this Article in the case of an original public sale.
(b)	When the highest bidder at a public sale of personal property not required to be confirmed fails to make the cash payment, if any, required by the terms of the sale, the person holding the sale shall at the same time and place again offer the property for sale. In the event no other bid is received, a new sale may be advertised in the regular manner provided by this Article for an original sale.
(c)	When the highest bidder at a public sale of personal property required to be confirmed fails to comply with his bid within 10 days after notice given by the person holding the sale or after a bona fide attempt to give such notice that the sale has been confirmed, the judge or clerk having jurisdiction may order a resale. The procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale of personal property.
(d)	When the highest bidder at a public sale or resale of real property by auction or any upset bidder fails to comply with the bid within 10 days after the tender to the bidder of a deed for the property or after a bona fide attempt to tender the deed, the judge or clerk having jurisdiction may order a resale. The procedure for a resale of real property is the same in every respect as is provided by this Article in the case of an original public sale of real property. 
(d1)	When the highest bidder at a public sale or resale of timber by sealed bid fails to comply with the bid within 10 days after the tender to the bidder of a deed for the timber or after a bona fide attempt to tender a timber deed, the judge or clerk having jurisdiction may direct that the timber be sold to the person who submitted the next highest bid or may order a resale. The procedure for a resale is the same in every respect as is provided by this Article in the case of an original public sale.
(e)	A defaulting bidder at any sale or resale or any defaulting upset bidder is liable on the bid, and in case a resale is had because of the default, the defaulting bidder remains liable to the extent that the final sale price is less than the bid, and for all costs of the resale or resales. Any deposit or compliance bond made by the defaulting bidder shall secure payment of the amount, if any, for which the defaulting bidder remains liable under this section.
(f)	Nothing in this section deprives any person of any other remedy against the defaulting bidder."
SECTION 9.  G.S. 1‑339.36(b) reads as rewritten:
"(b)	When an upset bid is made for property sold at private sale, subsequent procedure with respect to the upset bid is the same as for upset bids submitted in connection with real property sold at public sale."
SECTION 10.  	G.S. 1‑339.37 reads as rewritten:
"§ 1‑339.37.  Private sale; confirmation.
If no upset bid for property sold at private sale is submitted within 10 days after the report of sale or the last notice of upset bid is filed, the sale may then be confirmed, and the provisions of G.S. 1‑339.28(a) and (b) are applicable to such confirmation whether the property sold is real or personal. Unless otherwise provided in the order of sale, no confirmation is required of any sale held as provided by G.S. 1‑ 339.34."
part ii.  execution sales.
SECTION 11.  G.S. 1‑339.52 reads as rewritten:
"§ 1‑339.52.  Posting and publishing notice of sale of real property.
(a)	The notice of sale of real property shall:
(1)	Be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the property is situated, for at least 20 days immediately preceding the sale; and
(2)	Be published once a week for at least two successive weeks:
a.	In a newspaper qualified for legal advertising  published in the county; or
b.	If no newspaper qualified for legal advertising is published in the county,  in a newspaper having general circulation in the county.
(b)	When the notice of sale is published in a newspaper:
(1)	The period from the date of the first publication to the date of the last publication, both dates inclusive, shall not be less than seven days, including Sundays; and
(2)	The date of the last publication shall be not more than 10 days preceding the date of the sale.
(c)	When the real property to be sold is situated in more than one county, the provisions of subsections (a) and (b) shall be complied with in each county in which any part of the property is situated."
SECTION 12.  G.S. 1‑339.53 reads as rewritten:
"§ 1‑339.53.  Posting notice of sale of personal property.
The notice of sale of personal property, except in the case of perishable property as specified in G.S. 1‑339.56, shall be posted, in the area designated by the clerk of superior court for the posting of notices in the county in which the sale is to be held, for 10 days immediately preceding the date of sale."
SECTION 13.  G.S. 1‑339.58 reads as rewritten:
"§ 1‑339.58.  Postponement of sale.
(a)	The sheriff may postpone the sale to a day certain not later than six days, exclusive of Sunday, after the original date for the  sale:
(1)	When there are no bidders, 
(2)	When, in the sheriff's judgment, the number of prospective bidders at the sale is substantially decreased by inclement weather or by any casualty, 
(3)	When there are so many other sales advertised to be held at the same time and place as to make it inexpedient and impracticable, in the sheriff's judgment, to hold the sale on that day, 
(4)	When the sheriff is unable to hold the sale because of illness or for  other good reason, or
(5)	When other good cause exists.
(b)	Upon postponement of a sale, the sheriff  shall:
(1)	At the time and place advertised for the sale, publicly announce the postponement  of the sale; and
(2)	On the same day, attach to or enter on the original notice of sale or a copy  of the notice, posted as provided by G.S. 1‑339.52 in the case of real property or G.S. 1‑339.53 in the case of personal property, a notice of the postponement.
(c)	The posted notice of postponement shall:
(1)	State that the sale is postponed,
(2)	State the hour and date to which the sale is postponed,
(3)	State the reason for the postponement, and
(4)	Be signed by the sheriff.
(d)	If a sale is not held at the time fixed for the sale and is not postponed as provided by this section, or if a postponed sale is not held at the time fixed for the sale, the sheriff shall report the facts with respect thereto to the clerk of the superior court, who shall thereupon make an order for the sale of the property to be held at such time and place and upon such notice to be given in the manner and for the length of time as the clerk of the superior court deems advisable, but nothing in this section relieves the sheriff of liability for the nonperformance of the sheriff's official duty. 
SECTION 14.  G.S. 1‑339.64 reads as rewritten:
"§ 1‑339.64.  Upset bid on real property; compliance bond.
(a)	An upset bid is an advanced, increased, or raised bid whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price or last upset bid by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). Subject to the provisions of subsection (b) of this section, an upset bid shall be made by delivering to the clerk of superior court, with whom the report of sale or the last notice of upset bid was filed, a deposit in cash or by certified check or cashier's check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court, with whom the report of sale or the last notice of upset bid was filed, by the close of normal business hours on the tenth day after the filing of the report of sale or the last notice of upset bid and if the tenth day falls upon a Sunday or legal holiday or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the notice of upset bid may be filed on the day following when the office is open for the regular dispatch of its business. Except as provided in G.S. 1-339.66A and G.S. 1-339.69, there shall be no resales; however, there may be successive upset bids, each of which shall be followed by a period of 10 days for a further upset bid. When an upset bid or a motion for resale under G.S. 1-339.66A is not filed within 10 days following a sale, resale, or prior upset bid, the rights of the parties to the sale or resale become fixed.
(b)	The clerk of the superior court may require an upset bidder or the highest bidder at a resale held under G.S. 1-339.69 also to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond, approved by the clerk. The compliance bond shall be in the amount the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond, less the amount of any required deposit. The compliance bond shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor's compliance with the bid.
		
(e)	At the time that an upset bid on real property is submitted to the court as provided in subsection (a) of this section, together with a compliance bond if one is required, the upset bidder shall file with the clerk a notice of upset bid. The notice of upset bid shall:
(1)	State the name, address, and telephone number of the upset bidder;
(2)	Specify the amount of the upset bid;
(3)	Provide that the sale shall remain open for a period of 10 days after the date on which the notice of upset bid is filed for the filing of additional upset bids as permitted by law; and
(4)	Be signed by the upset bidder or the attorney or the agent of the upset bidder.
(f)	When an upset bid is made as provided in this section, the clerk shall notify the person holding the sale who shall thereafter mail a written notice of upset bid by first-class mail to the last known address of the last prior bidder and the current record owners of the property.
(g)	When an upset bid is made as provided in this section, the last prior bidder, regardless of how the bid was made, shall be released from any further obligation on account of the bid, and any deposit or bond provided by the last prior bidder shall be released.
(h)	Any person offering to purchase real property by upset bid as permitted in this Article shall be subject to and bound by the terms of the original notice of sale except as modified by a court order or the provisions of this Article.
(i)	The clerk of superior court shall make all orders as may be just and necessary to safeguard the interests of all parties and may fix and determine all necessary procedural details with respect to upset bids in all instances in which this Article fails to make definite provisions as to that procedure."
SECTION 15.  G.S. 1‑339.65 reads as rewritten:
"§ 1‑339.65.  Separate upset bids when real property sold in parts; subsequent procedure.
When real property is sold in parts, as provided by G.S. 1‑ 339.46, the sale of any part shall be subject to a separate upset bid; and to the extent the clerk of the superior court having jurisdiction deems advisable, the sale of each part shall thereafter be treated as a separate sale for the purpose of determining the  applicable procedure."
SECTION 16.  G.S. 1‑339.66 is repealed.
SECTION 17.  Article 29B of Chapter 1 of the General Statutes is amended by adding a new section:
"§ 1-339.66A.  Ordering resale of real property after upset bid.
Upon motion of an interested person and for good cause, the clerk of superior court may order a resale of real property when an upset bid is submitted as provided in G.S. 1-339.64. If the motion is granted, the procedure for the resale is the same in every respect as is provided by this Article in the case of an original public sale. If the motion is denied, the 10-day period for subsequent upset bids begins upon the entry of the order."
SECTION 18.  G.S. 1‑339.69 reads as rewritten:
"§ 1‑339.69.  Failure of bidder to comply with bid; resale.
(a)	When the highest bidder at a sale of personal property fails to pay the amount of the bid, the sheriff shall at the same time and place immediately resell the property. In the event no other bid is received, a new sale may be advertised in the regular manner provided by this Article for an original sale.
(b)	When the highest bidder at a sale or resale of real property or any upset bidder fails to comply with the bid within 10 days after the tender to the bidder of a deed for the property or after a bona fide attempt to tender such deed, the clerk of the superior court who issued the execution may order a resale. The procedure for such resale is the same in every respect as is provided by this Article in the case of an original sale of real property.
(c)	A defaulting bidder at any sale or resale or any defaulting upset bidder is liable on the bid, and in case a resale is had because of the default, the defaulting bidder remains liable to the extent that the final sale price is less than the bid plus all costs of the resale or resales. Any deposit or compliance bond made by the defaulting bidder shall secure payment of the amount, if any, for which the defaulting bidder remains liable under this section.
(d)	Nothing in this section deprives any person of any other remedy against the defaulting bidder."
part iii.  conforming amendments to other sections of the general statutes.
SECTION 19.  G.S. 46‑28.1(e) reads as rewritten:
"(e)	If the court revokes its order of confirmation under this section, the court shall order a resale. The procedure for a resale is the same as is provided for an original public sale under Article 29A of Chapter 1 of the General Statutes."
part iv.  effective date and applicability.
SECTION 20.  This act becomes effective January 1, 2002, and applies to judicial sales when the original order of sale is issued on or after that date and to execution sales when the execution is originally issued on or after that date.  This act does not apply to any judicial sale when the original order of sale is issued prior to the effective date of this act or to any execution sale held pursuant to any execution originally issued prior to the effective date of this act.