Seyfarth Synopsis: On the heels of the enactment of a similar order in Mecklenburg County, which went into effect Thursday, March 26 at 8:00 a.m.i, the Governor of the State of North Carolina has enacted a statewide Stay-at-Home Order, effective as of Monday, March 30, 2020 at 5:00 p.m. The Order could have a significant impact on real estate activities in and around the state as businesses and individuals are now tasked with finding creative solutions to maintaining their productivity and profitability in the face of new restrictions.

Stay-at-Home Executive Order Issued for North Carolina

The Orderii, which goes into effect on Monday, March 30, 2020 at 5:00 p.m. and remains in place for 30 days, restricts the movement of residents outside their homes and prohibits any gathering of more than 10 people, whether indoors or outdoors. The Order includes exemptions for certain “essential” services and activities, as well as for essential business and governmental services, but all operations, gatherings and travel which are deemed non-essential are prohibited while the Order remains in effect.

Essential Business and Operations

The Order requires businesses and other organizations to close their physical workplaces and facilities to both workers and customers, unless they are classified as “essential”.  The list of businesses and other operations which are deemed essential is somewhat extensive and includes grocery stores, pharmacies, healthcare operations, manufacturing and distributing, restaurants, laundry services, media and others.  Furthermore, certain governmental functions (such as emergency response, law enforcement and public works) are deemed to be essential as well.

Effect on Construction Activities

The Order classifies “Building” and “Construction” as essential, as well as hardware supply stores and all manufacturing and distribution of products which are necessary in order to carry out essential activities. There is no indication in the Order that open construction sites will be forced to shut down, nor is there currently any mandate preventing the commencement of new construction or development projects. However, given the slower pace of most business operations in recent days, there may be some supply chain delays or other impediments to the timely delivery of building materials. Further, the requirement that social distancing be observed at all times, even in the performance of essential job functions, could prove to be an obstacle in the timely completion of certain projects around North Carolina. Certain services related to construction activities, such as governmental site and work inspections, are being performed via video services on smartphones and tablets whenever possible. Third-party inspections are also permitted, but, in many cases, such inspections require approval by local or state governmental agenciesiii.

Considerations for Other Real Estate Businesses

Certain other businesses providing real estate services are also deemed essential and permitted to remain open, but these are limited to legal, accounting and tax services, insurance services, appraisal and title services, land surveying and professional engineering and architectural services (notably, this is broader than the restrictions initially placed on Mecklenburg County by its own order, which did not include surveying, engineering or architectural operations). Other in-person real estate activities, such as home showings and office tours, are generally prohibited and may be conducted only via video or other remote meansiv. County deed registers for most of the largest metro areas in the state remain openv, either in full or for electronic filingsvi, but, as has been observed in many states and counties across the country, this may not be sufficient to prevent certain delays and other complications in connection with real estate closings and issuance of title policies.

In short, real estate service providers must continue to adjust their business operations and general day-to-day activities to comply with the Order and to find creative and safe ways to keep real estate transactions moving forward.