§ 58-1-20. Real property warranties. - North Carolina Statutes

§ 58‑1‑20.  Realproperty warranties.

(a)        Any warrantyrelating to fixtures to real property issued by a person is a contract ofinsurance, except the following:

(1)        A warranty made by abuilder or seller of the real property;

(2)        A warranty providingfor the repair or replacement of the items covered by the warranty fordefective parts and mechanical failure or resulting from ordinary wear andtear, and excluding from its coverage damage from recognizable perils, such asfire, flood, and wind, that neither relate to any defect in the items coverednor result from ordinary wear and tear.

(b)        It is unlawful forany person to issue a warranty specified in subdivision (a)(2) of this sectionunless that person has posted a surety bond with the Secretary of State in theprincipal sum of not less than one hundred thousand dollars ($100,000). Thebond must be issued by a surety company licensed to do business in this Stateand is subject to the approval of the Secretary of State. Any person to whomthe warranty is issued may institute an action to recover against the warrantorand the surety bond for any breach of warranty.

(c)        Persons issuingreal property warranties shall comply with the requirements of G.S. 66‑373.(1979, c. 773,s. 1; 1987, c. 864, s. 9; 1991, c. 644, s. 43; 2003‑290, s. 1(a); 2007‑95,s. 8.)