North Carolina Purchase Money Deed of Trust
This Deed of Trust, hereinafter sometimes called the Security Instrument is made
__________________ (date) . This Deed of Trust is being given to secure the Promissory Note
described below, the proceeds of which were used to purchase the property covered by this
Deed of Trust. The Trustor is ___________________ (Name of Borrower) of ______________
___________________________________________________________________ (street
address, city, state, zip code) , hereinafter called Borrower. The Trustee is
________________________ (Name of Trustee) of __________________________________
_________________________________________________ (street address, city, state, zip
code) , hereinafter called Trustee. The beneficiary is ____________________ (Name of
Beneficiary) of _______________________________________________________________
__________________ (street address, city, state, zip code) , hereinafter called Beneficiary or
Lender .
Borrower owes Lender the principal sum of $____________. This debt is evidenced by
Borrower's Promissory Note (the Note ), dated the same date as this Security Instrument. The
Note provides for monthly payments, with the full debt, if not paid earlier, due and payable on
__________________ ( date) . This Security Instrument secures to Lender: (a) the repayment of
the debt evidenced by the Note, with interest, and all renewals, extensions, and modifications;
(b) the payment of all other sums, with interest, advanced under Section 7 to protect the
security of this Security Instrument; and (c) the performance of Borrower's covenants and
agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably
grants and conveys to Trustee, in trust, with power of sale, the following-described property
located in ____________ County, North Carolina:
The condominium unit designated as Apartment _______ (number) in the building
commonly known as ________ (number) at ___________________________________
_______________________________________ (street address, city, county, state,
zip code) , which unit is so designated in a certain _______________________ ( title of
condominium declaration) which establishes a plan for condominium ownership of the
building and the land on which it stands (said building and land being hereafter jointly
and severally referred to as Property ), which Declaration is dated _________________
(date) , and was recorded in the (specify recording office) _______________________
of ____________ County , in Book _________ (number) , Page ___________ (number) ,
on _______________ (date) .
The land upon which the building stands is bounded and described as follows:
(Legal description of land)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
A. An undivided _____ % interest, in common with the other unit owners, in the
common elements of the Property, as the same are described in the Declaration:
1. Together with and subject to an easement, as long as the building shall
stand, for the maintenance of any and all encroachments by or upon the unit,
upon or by any other unit or units or common elements, now existing as a result
of construction of the building, or which may later come into existence as a result
of settling of the building or in any other way save deliberate act of the owner or
owners of the encroaching unit or units.
2. Together with and subject to an easement in common with the other unit
owners, to use all pipes, ducts, conduits, wires, cables, utility lines and the like,
and other common elements, located in any of the other units or elsewhere on
the property, which serve the unit here contracted to be sold.
3. Together with an exclusive easement for the use of the terrace to which
the unit here contracted to be sold has exclusive access.
To have and to hold to Trustee and Trustee's successors and assigns, forever, together with all
the improvements now or to be erected on the property, and all easements, rights,
appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock
and all fixtures now or to become a part of the property. All replacements and additions shall
also be covered by this Security Instrument. All of the foregoing is referred to in this Security
Instrument as the Property .
Borrower covenants that Borrower is lawfully seized of the estate conveyed by this
Security Instrument and has the right to grant and convey the Property and that the Property is
unencumbered, except for encumbrances of record. Borrower warrants and will defend
generally the title to the Property against all claims and demands, subject to any encumbrances
of record.
Borrower and Lender covenant and agree as follows:
1. Payment of Principal, Interest, Late Charges, Prepayment and Late Charges
Borrower shall promptly pay when due the principal of and interest on the debt
evidenced by the Note and any prepayment and late charges due under the Note.
2. Funds for Taxes and Insurance
A. If Lender gives notice to Borrower in writing, Borrower shall pay to Lender on the
day that monthly payments are due under the Note, until the Note is paid in full, a sum
(the Funds ) equal to _____________ (one-twelfth) of: (a) yearly taxes and
assessments that may attain priority over this Security Instrument; (b) yearly leasehold
payments or ground rents on the Property, if any; (c) yearly hazard insurance premiums;
and (d) yearly mortgage insurance premiums, if any. These items are called Escrow
Items. Lender may estimate the funds due on the basis of current data and reasonable
estimates of future Escrow Items.
B. The funds shall be held in an institution the deposits or accounts of which are
insured or guaranteed by a federal or state agency (including Lender if Lender is such
an institution). Lender shall apply the funds to pay the Escrow Items. Lender may not
charge for holding and applying the funds, analyzing the account, or verifying the escrow
items, unless Lender pays Borrower interest on the funds and applicable law permits
Lender to make such a charge. Borrower and Lender may agree in writing that interest
shall be paid on the funds. Unless an agreement is made or applicable law requires
interest to be paid, Lender shall not be required to pay Borrower any interest or earnings
on the funds. Lender shall give to Borrower, without charge, an annual accounting of the
funds showing credits and debits to the funds and the purpose for which each debit to
the funds was made. The funds are pledged as additional Security for the sums secured
by this Security Instrument.
C. If the amount of the funds held by Lender, together with the future monthly
payments of funds payable prior to the due dates of the Escrow Items, shall exceed the
amount required to pay the Escrow Items when due, the excess shall be, at Borrower's
option, either promptly repaid to Borrower or credited to Borrower on the monthly
payments of funds. If the amount of the funds held by Lender is not sufficient to pay the
Escrow Items when due, Borrower shall pay to Lender any amount necessary to make
up the deficiency in one or more payments as required by Lender.
D. On payment in full of all sums secured by this Security Instrument, Lender shall
promptly refund to Borrower any funds held by Lender. If under Section 19 , the property
is sold or acquired by Lender, Lender shall apply, no later than immediately prior to the
sale of the Property or its acquisition by Lender, any funds held by Lender at the time of
application as a credit against the sums secured by this Security Instrument.
3. Application of Payments
Unless applicable law provides otherwise, all payments received by Lender under
Sections 1 and 2 shall be applied: first, to late charges due under the Note; second, to
prepayment charges due under the Note; third, to amounts payable under Section Two; fourth,
to interest due; and last, to principal due.
4. Charges and Liens
A. Borrower shall pay all taxes, assessments, charges, fines, and impositions
attributable to the property that may attain priority over this Security Instrument, and
leasehold payments or ground rents, if any. Borrower shall pay these obligations in the
manner provided in Section 2 , or if not paid in that manner, Borrower shall pay them on
time directly to the person owed payment. Borrower shall promptly furnish to Lender all
notices of amounts to be paid under this Paragraph. If Borrower makes these payments
directly, Borrower shall promptly furnish to Lender receipts evidencing the payments.
B. Borrower shall promptly discharge any lien that has priority over this Security
Instrument unless Borrower: (a) agrees in writing to the payment of the obligation
secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien
by, or defends against enforcement of the lien in, legal proceedings which in the
Lender's opinion operate to prevent the enforcement of the lien or forfeiture of any part
of the Property; or (c) secures from the holder of the lien an Agreement satisfactory to
Lender subordinating the lien to this Security Instrument. If Lender determines that any
part of the Property is subject to a lien that may attain priority over this Security
Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall satisfy
the lien or take one or more of the actions set forth above within Ten (10) days of the
giving of notice.
5. Hazard Insurance
A. Borrower shall keep the improvements now existing or to be erected on the
Property insured against loss by fire, hazards included within the term extended
coverage, and any other hazards for which Lender requires insurance. This insurance
shall be maintained in the amounts and for the periods that Lender requires. The
insurance carrier providing the insurance shall be chosen by Borrower subject to
Lender's approval which shall not be withheld unreasonably.
B. All insurance policies and renewals shall be acceptable to Lender and shall
include a standard mortgage clause. Lender shall have the right to hold the policies and
renewals. If Lender requires, Borrower shall promptly give to Lender all receipts of paid
premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to
the insurance carrier and Lender. Lender may make proof of loss if not made promptly
by Borrower.
C. Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall
be applied to the restoration or repair of the Property damaged, if the restoration or
repair is economically feasible and Lender's Security is not lessened. If the restoration or
repair is not economically feasible or Lender's Security would be lessened, the insurance
proceeds shall be applied to the sums secured by this Security Instrument, whether or
not then due, with any excess paid to Borrower. If Borrower abandons the Property, or
does not answer within _____ (e.g. thirty) days a notice from Lender that the insurance
carrier has offered to settle a claim, then Lender may collect the insurance proceeds.
Lender may use the proceeds to repair or restore the Property or to pay sums secured
by this Security Instrument, whether or not then due. The _____ ( 30 ) day period will
begin when the notice is given.
D. Unless Lender and Borrower otherwise agree in writing, any application of
proceeds to principal shall not extend or postpone the due date of the monthly payments
referred to in Sections 1 and 2 or change the amount of the payments. If under Section
19 the Property is acquired by Lender, Borrower's right to any insurance policies and
proceeds resulting from damage to the property prior to the acquisition shall pass to
Lender to the extent of the sums secured by this Security Instrument immediately prior to
the acquisition.
6. Preservation and Maintenance of Property
Borrower shall not destroy, damage, or substantially change the Property, allows the
Property to deteriorate, or commit waste.
7. Protection of Lender’s Rights in the Property
A. If Borrower fails to perform the covenants and agreements contained in this
Security Instrument, or there is a legal proceeding that may significantly affect Lender's
rights in the property (such as a proceeding in bankruptcy, probate, for condemnation, or
to enforce laws or regulations), then Lender may do and pay for whatever is necessary
to protect the value of the Property and Lender's rights in the Property. Lender's actions
may include paying any sums secured by a lien that has priority over this Security
Instrument, appearing in court, paying reasonable attorney's fees, and entering on the
Property to make repairs. Although Lender may take action under this Paragraph,
Lender does not have to do so.
B. Any amounts disbursed by Lender under this Section 7 shall become additional
debt of Borrower secured by this Security Instrument. Unless Borrower and Lender
agree to other terms of payment, these amounts shall bear interest from the date of
disbursement at the Note rate and shall be payable, with interest, on notice from Lender
to Borrower requesting payment.
C. If Lender required mortgage insurance as a condition of making the loan secured
by this Security Instrument, Borrower shall pay the premiums required to maintain the
insurance in effect until such time as the requirement for the insurance terminates in
accordance with Borrower's and Lender's written agreement or applicable law.
8. Inspection
Lender or its agent may make reasonable entries on and inspections of the property.
Lender shall give Borrower notice at the time of or prior to an inspection specifying reasonable
cause for the inspection.
9. Condemnation
The proceeds of any award or claim for damages, direct or consequential, in connection
with any condemnation or other taking of any part of the property, or for a conveyance in lieu of
condemnation, are now assigned and shall be paid to Lender. In the event of a total taking of
the property, the proceeds shall be applied to the sums secured by this Security Instrument,
whether or not then due, with any excess paid to Borrower. In the event of a partial taking of the
property, unless Borrower and Lender otherwise agree in writing, the sums secured by this
Security Instrument shall be reduced by the amount of the proceeds multiplied by the following
fraction: (a) the total amount of the sums secured immediately before the taking, divided by (b)
the fair market value of the property immediately before the taking. Any balance shall be paid to
Borrower. If the property is abandoned by Borrower, or if, after notice by Lender to Borrower
that the condemnor offers to make an award or settle a claim for damages, Borrower fails to
respond to Lender within ______ (e.g., 30) days after the date the notice is given, Lender is
authorized to collect and apply the proceeds, at its option, either to the restoration or repair of
the property or to the sums secured by this Security Instrument, whether or not then due.
Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal
shall not extend or postpone the due date of the monthly payments referred to in Sections 1
and 2 or change the amount of those payments.
10. Borrower not Released; Forbearance by Lender not a Waiver
Extension of the time for payment or modification of amortization of the sums secured by
this Security Instrument granted by Lender to any successor in interest of Borrower shall not
operate to release the liability of the original Borrower or Borrower's successors in interest.
Lender shall not be required to commence proceedings against any successor in interest or
refuse to extend the time for payment or otherwise modify amortization of the sums secured by
this Security Instrument by reason of any demand made by the original Borrower or Borrower's
successors in interest. Any forbearance by Lender in exercising any right or remedy shall not be
a waiver of or preclude the exercise of any right or remedy.
11. Successors and Assignors Bound; Joint and Several Liability; Co-Signers
The covenants and agreements of this Security Instrument shall bind and benefit the
successors and assigns of Lender and Borrower, subject to the provisions of Section 17 .
Borrower's covenants and agreements shall be joint and several. Any Borrower who cosigns
this Security Instrument but does not execute the Note: (a) is cosigning this Security Instrument
only to mortgage, grant, and convey that Borrower's interest in the property under the terms of
this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security
Instrument; and (c) agrees that Lender and any other Borrower may agree to extend, modify,
forbear, or make any accommodations with regard to the terms of this Security Instrument or the
Note without that Borrower's consent.
12. Loan Charges
If the loan secured by this Security Instrument is subject to a law which sets maximum
loan charges, and that law is finally interpreted so that the interest or other loan charges
collected or to be collected in connection with the loan exceed the permitted limits, then: (a) any
such loan charge shall be reduced by the amount necessary to reduce the charge to the
permitted limit; and (b) any sums already collected from Borrower that exceeded permitted limits
will be refunded to Borrower. Lender may choose to make this refund by reducing the principal
owed under the Note or by making a direct payment to Borrower. If a refund reduces principal,
the reduction will be treated as a partial prepayment without any prepayment charge under the
Note.
13. Legislation Affecting Lender’s Rights
If the enactment or expiration of applicable laws has the effect of rendering any provision
of the Note or this Security Instrument unenforceable according to its terms, Lender, at its
option, may require immediate payment in full of all sums secured by this Security Instrument
and may invoke any remedies permitted by Section 19 . If Lender exercises this option, Lender
shall take the steps specified in the second paragraph of Section Seventeen.
14. Notices
Any notice to Borrower provided for in this Security Instrument shall be given by
delivering it or by mailing it by first class mail unless applicable law requires the use of another
method. The notice shall be directed to the property address or any other address Borrower
designates by notice to Lender. Any notice to Lender shall be given by first class mail to
Lender's address stated in this Security Instrument or any other address Lender designates by
notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have
been given to Borrower or Lender when given as provided in this Paragraph.
15. Governing Law and Severability
This Security Instrument shall be governed by federal law and the law of the jurisdiction
in which the property is located. If any provision or clause of this Security Instrument or the Note
conflicts with applicable law, the conflict shall not affect other provisions of this Security
Instrument or the Note which can be given effect without the conflicting provision. To this end
the provisions of this Security Instrument and the Note are declared to be severable.
16. Borrower’s Copy
Borrower shall be given one conformed copy of the Note and of this Security Instrument.
17. Transfer of the Property
If all or any part of the property or any interest in it is sold or transferred without Lender's
prior written consent, Lender may, at its option, require immediate payment in full of all sums
secured by this Security Instrument. However, this option shall not be exercised by Lender if its
exercise is prohibited by federal law as of the date of this Security Instrument. If Lender
exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide
a period of not less than thirty (30) days from the date the notice is delivered or mailed within
which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay
these sums prior to the expiration of this period, Lender may invoke any remedies permitted by
this Security Instrument without further notice or demand on Borrower.
18. Borrower’s Right to Reinstate
If Borrower meets certain conditions, Borrower shall have the right to have enforcement
of this Security Instrument discontinued at any time prior to the earlier of: (a) five (5) days (or
such other period as applicable law may specify for reinstatement) before sale of the property
pursuant to any power of sale contained in this Security Instrument; or (b) entry of a judgment
enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums
that then would be due under this Security Instrument and the Note had no acceleration
occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses
incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorney's
fees; and (d) takes such action as Lender may reasonably require to assure that the lien of this
Security Instrument, Lender's rights in the property, and Borrower's obligation to pay the sums
secured by this Security Instrument shall continue unchanged. On reinstatement by Borrower,
this Security Instrument and the obligations secured by it shall remain fully effective as if no
acceleration had occurred. However, this right to reinstate shall not apply in the case of
acceleration under Sections 13 or 17 .
19. Acceleration and Remedies
A. Lender shall give notice to Borrower prior to acceleration following Borrower's
breach of any covenant or agreement in this Security Instrument (but not prior to
acceleration under Section Thirteen and Seventeen unless applicable law provides
otherwise). The notice shall specify: (a) the default; (b) the action required to cure the
default; (c) a date, not less than thirty (30) days from the date the notice is given to
Borrower, by which the default must be cured; and (d) that failure to cure the default on
or before the date specified in the notice may result in acceleration of the sums secured
by this Security Instrument and sale of the property. The notice shall further inform
Borrower of the right to reinstate after acceleration and the right to assert in the
foreclosure preceding the nonexistence of a default or any other defense of Borrower to
acceleration and sale. If the default is not cured on or before the date specified in the
notice, Lender at its option may require immediate payment in full of all sums secured by
this Security Instrument without further demand and may invoke the power of sale and
any other remedies permitted by applicable law. Lender shall be entitled to collect all
expenses incurred in pursuing the remedies provided in this paragraph, including, but
not limited to, reasonable attorney's fees and costs of title evidence.
B. If Lender invokes the power of sale, and if it is determined in a hearing held in
accordance with applicable law that Trustee can proceed to sale, Trustee shall take such
action regarding notice of sale and shall give such notices to Borrower and to other
persons as applicable law may require. After the time required by applicable law and
after publication of the notice of sale, Trustee, without demand on Borrower, shall sell
the property at public auction to the highest bidder at the time and place and under the
terms designated in the notice of sale in one or more parcels and in any order Trustee
determines. Lender or its designee may purchase the property at any sale.
C. Trustee shall deliver to the purchaser Trustee's deed conveying the property
without any covenant or warranty, express or implied. The recitals in the Trustee's deed
shall be prima facie evidence of the truth of the statements made in them. Trustee shall
apply the proceeds of the sale in the following order: (a) to all expenses of the sale,
including, but not limited to, Trustee's fees of ______% of the gross sale price; (b) to all
sums secured by this Security Instrument; and (c) any excess to the person or persons
legally entitled to it.
20. Lender in Possession
On acceleration under Section 19 , or abandonment of the property, Lender (in person,
by agent, or by judicially appointed receiver) shall be entitled to enter on, take possession of,
and manage the property and to collect the rents of the property including those past due. Any
rents collected by Lender or the receiver shall be applied first to payment of the costs of
management of the property and collection of rents, including, but not limited to, receiver's fees,
premiums on receiver's bonds, and reasonable attorney's fees, and then to the sums secured
by this Security Instrument.
21. Release
On payment of all sums secured by this Security Instrument, Lender or Trustee shall
cancel this Security Instrument without charge to Borrower. If Trustee is requested to release
this Security Instrument, all Notes evidencing debt secured by this Security Instrument shall be
surrendered to Trustee. Borrower shall pay any recordation costs.
22. Substitute Trustee
Lender may from time to time remove Trustee and appoint a successor Trustee to any
Trustee appointed under this Security Instrument by an Instrument recorded in the county in
which this Security Instrument is recorded. Without conveyance of the property, the successor
Trustee shall succeed to all the title, power, and duties conferred on Trustee in this Security
Instrument and by applicable law.
23. Subject to Laws and Regulations
This Deed of Trust and the rights and obligations of the parties are subject to the North
Carolina Condominium Act , the Declaration of Condominium, the Code of Regulations and the
Declaration Plan; and in the event of conflict between the terms of this Deed of Trust and the
terms of the Act and those other documents, the Act and other documents shall prevail.
24. Compliance with Law and Regulations
The Borrower shall fully and faithfully comply with the North Carolina Condominium Act ,
Declaration of Condominium, the Code of Regulations, the Declaration Plan, and any other
rules and regulations of the Condominium Association, and in the event of Borrower’s failure to
do so within a period of thirty (30) days after notice from either the Association or from the
Beneficiary, or in the case of any such default that cannot, with due diligence, be cured or
remedied within such thirty (30)-day period, if the Borrower fails to proceed promptly after such
notice to cure or remedy the same with due diligence, then in any such case, the Beneficiary
may, from time to time, at its option, but without any obligation to do so, cure or remedy any
such default of the Borrower, and all sums expended by the Beneficiary for such purpose,
including reasonable counsel fees, shall be added to the debt secured by this Deed of Trust,
shall become due and payable, and shall bear interest until repaid at the rate provided in the
obligation secured by this Deed of Trust; provided, however, that the failure of the Borrower to
keep or to perform any such covenant, agreement, or provision for thirty (30) days after any
such notice shall, at the election of the Beneficiary, constitute a breach of covenant under this
Deed of Trust entitling the Beneficiary or Trustee to accelerate the indebtedness secured by this
Deed of Trust.
25. Payment of Condominium Assessments
Borrower shall pay before they shall become delinquent or shall procure the discharge or
release of, all assessments for common expenses assessed against the Property by the
Association. If Borrower fails to pay any assessment for common expenses, the Beneficiary
may, at its option, pay the assessment. All sums so paid by the Beneficiary shall immediately
and without demand be repaid by the Borrower to the Beneficiary, together with interest at the
rate provided in the obligation; provided, however, failure of the Borrower to make any such
payment of an assessment for common expenses shall constitute an event of default under this
Deed of Trust entitling the Borrower of Trustee to accelerate the indebtedness secured by this
Deed of Trust. The production of a receipt by the Beneficiary shall be conclusive proof of a
payment authorized by this Section, in the amount and validity of the receipt.
26. Amending Declaration, Plan, or Code of Regulations
The Borrower shall not vote to amend the Declaration, the Declaration Plan, or the Code
of Regulations, without the Beneficiary’s prior written consent, which consent shall not be
withheld unreasonably.
27. Unanimous Consent or Vote of the Owners
In each instance in which, under the provisions of North Carolina Condominium Act , the
Declaration, or the Code of Regulations, the unanimous consent or the unanimous vote of the
owners of condominium units is required, the Borrower shall not so vote or give such consent
without, in every case, the prior written consent of the Beneficiary, which shall not be withheld
unreasonably.
28. In this Security Instrument, any reference to a party includes that party's heirs,
executors, administrators, successors and assigns, singular includes plural and masculine
includes feminine.
WITNESS my signature as of the day and date first above stated.
_________________________
(P rinted name)
_________________________
(Signature of Borrower)
State of North Carolina
County of _____________
I, __________________ ( name of officer) , a Notary Public, do hereby certify that
_____________________ (Name of Borrower) , personally appeared before me this day and
acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this ____________________ (date of execution) .
______________________________
(Name of officer)
______________________________
(Title of officer)
My commission expires on __________________ (date) .
( Seal)
