Kirk Palmer & Thigpen
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Please direct inquires to Mike Hunter, Bill Hamel, Keith Nichols or Ben Karb.
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Carolina Common Elements 
Ever since I bought my condo I could not, and still can’t, get my HOA to take responsibility for the poor construction and major water damage to my unit, which was hidden from me when I made the purchase. Members of the HOA keep saying that when the Developer released his claims, and later died, the HOA has no responsibility for the ongoing claims. What is the truth?
______________________
If you’d like to know more of my plight: http://www.facebook.com/edentoncottonmill
I can’t prove it but I believe it was the president of the HOA who reported me to the Sheriff’s Department as a “possible threat” to the safety of the people in our condo because of my protests. This cowardly act was done during heightened tensions due to area school bomb threats.
I really could use a good attorney. LOL!
I cannot comment on the legitimacy of your claims, since there obviously is a lot of history here. I suggest that you find a local attorney with experience in construction defect claims.
I live in Carolina Trace, Hidden Lakes POA. I purchased a home there in 2010. After I moved there I discovered that our POA had common ground around our POA including along Lake Trace. I also discovered that there are home owners in our POA that utilizes the common ground as their own personal property (one property has even cut away the land to make a recessed dock area off the lakefront) when the covenants and bylaws state that common ground is for all home owners to utilize and the POA must provide access. I have approached the POA board on numerous occasions asking them why individual homeowners are allowed to use common ground for their own use and why the POA has not created access for all home owners. The board refuses to do anything to correct this situation. What can I do or other homeowners do in order to make them correct the situation. Thank you.
I agree that a homeowner who occupies or modifies part of the common area for his exclusive use is a violation, and the board should take immediate action to address that issue. If they refuse, you should consider hiring a lawyer and suing the board to obtain an injunction requiring them to perform their fiduciary duty to protect and preserve the common areas for all members of the HOA. Beyond that, is there anything stopping you from using the common areas as you wish?
Yes, they do not maintain any paths leading to the common areas. The only way to get there safely is using a 4 wheeler to access the common ground. I have went to board meetings and asked them to improve & provide better access to the common ground and also asked them to do their fiduciary duties concerning homeowners in violation of our covenant’s & by-laws who our utilizing the common ground for personal use. The board refused to confront the home owners and said they did not want to hurt the feelings of those using the common ground. I asked that they consider the feelings of the rest of the homeowners who can’t utilize the common ground as stated in the covenants and they refused to pursue the matter and do anything about it. I would like to note than 2 of the home owners who used the common ground as part of their property were board members.
Are HOAs nonprofits? I am not that familiar with NC HOA laws. Can an HOA board of directors rent out the neighborhood common area and streets to a movie production company and accept payments to be used for various improvements to the neighborhood
Most every HOA is established as a nonprofit corporation. I am not a tax attorney, so I will preface my response by suggesting you discuss this issue with the HOA’s CPA. That being said, many HOAs have limited activities that generate some income in addition to their annual assessments. Examples include leasing high-rise tower space for cell phone towers; renting out the pool/clubhouse for private functions; or renting common areas to movie production companies (though I’ll admit the latter example is rare). I do not believe that the occasional profit-making endeavor will jeopardize your tax-exempt status, but this will likely be considered taxable income to the HOA (and yes, even nonprofit HOAs do have to file tax returns).
I moved to North Carolina about 18 months ago and am now in a 20 home HOA. As you might imagine, if only one homeowner fails to stay current with dues it causes undue concern for others and there really is not much of a reserve fund. Does NC law require that an attorney file a lien with the Court? We came from Texas where an officer of the HOA board could do this. Thanks for any response, I enjoy the info I receive from your site.
NC law does not “require” a board to file liens, but it certainly is the prudent thing to do in most cases. If one delinquency can have such a profound impact on your HOA’s finances, perhaps the board should have a reserve study performed to establish what the proper amount of reserves the HOA should keep, and develop a plan for funding the reserves. I recommend Peter Miller of Miller Dodson Associates, http://www.mdareserves.com .
While it might be possible for a board member to prepare and file a Claim of Lien, I do not recommend it. There have been many changes to the law over the last several years, and there are several requirements that must be met before you can even file the lien; and unless your board member knows how to perform a title search, preparing and filing the lien properly is going to be very difficult. To the uninitiated, this area of the law is a minefield.
We were caught in middle of being in an HOA. When we signed papers we were told by Agent and closing Attorney we had no HOA That they knew of . Hind site should have gotten in writing . We moved to county from city in our home of 44 years to our dream home for retirement . To be near our children and in quite environment . We have no money in out fixed income budget for HOA fees . May be forced to sell our dream home . Is there any help you know of ? We are on backside of neighborhood that are custom built homes . Then years later a developer came in and built huge box ugly homes and formed this neighborhood that we had no clue was coming . We have been forced into a lot of HOA BILLS . These new people fight all the time . Keep gossip up and unrest that we at 65 want no part of .Everyone on this back circle street that was nit built by the developer Live Well was told same . Can we get just our few houses excluded from HOA
Unless you have something in writing from the developer, homebuilder, real estate agent or closing attorney that say there is no HOA, I’m afraid I don’t have any good suggestions for you. The restrictive covenants should have appeared in the title search performed by the closing attorney, and they should appear somewhere in your settlement paperwork.
Our HOA has always been very punctual with the quarterly billing of our maintenance fees. If we did not receive them on the last day of a quarter, we’d certainly receive them on the first day of the new quarter.
For this quarter, we received our maintenance fees on April 10, and they were postmarked April 9. No explanation for the late billing was included but the usual disclaimer for late payment was there: Payment is due within 30 days of billing, after which it will be considered delinquent. After 30 days, interest will be assessed at the rate of 1% monthly. A $150 penalty will be assessed to accounts that are over 60 days in arrears. Property liens will be filed for accounts that are over 90 days in arrears. Related legal fees will be assessed to the Owner and added to the lien. This policy is consistent with our Covenants and Bylaws.
As I mentioned, we received our bills on April 10, but the BILLING DATE is posted as March 20… NOT March 31, which would have been the end of the last quarter. So, according to their “Covenants and Bylaws,” we have a week to come up with around $1400?! That’s not easy on someone like me depending on a disability check.
I know this is not ethical, but is this legal to back-date maintenance fees? Shouldn’t they be dated on or near the mailing date?
Thanks…
Technically, there’s nothing in NC law that even requires the HOA to send out invoices, but I don’t know of any HOA that doesn’t and expect owners to simply figure out when assessments are due. It certainly makes sense that owners would be given 30 days from the date of billing, if that’s what your governing documents say. What also should concern you is the $150 late fee – by statute, late fees are limited to $20 per month, or a one-time fee of 10% of the unpaid assessment. If the assessment is $1,400, then the maximum late fee would be $140, based on what you have said.
What options are available to an HOA when the number of rental/non-resident owner units increases so much that getting enough owners (members) to volunteer for the Board or HOA committees is no longer possible?
This issue was the topic of my “Association Answers” column in the Charlotte Observer in October, 2012. It can be found here: http://www.horacktalley.com/uploads/news/files/259.pdf
This is for Mike Hunter:
My question is: Is this vote to make changes to the Declaration and By-laws legal under NC law?
Our apartment condominium Association is holding an important mail-in vote, in progress, on 10 Amendments and 2 new Articles to the Declaration, and 2 Amendments and 1 new Article to the By-laws. Approval of 67% of owners is required to amend our Declaration and By-laws.
Under the North Carolina Nonprofit Corporation Act, 55A – 7- 08 Action by written ballot, the Statute says : (b) A written ballot shall: (2) Provide an opportunity to vote for or against each proposed action.
However, we are not being afforded the opportunity to do that. The solicitation letter, the cover letter sent with the voting package, by the Manager states:
“Please bear in mind that some of the Amendments are grouped because they are dependent upon each other, this is the reason why there are several amendments on some ballots versus individual votes for each.”
In our voting package, we received only 4 ballots. Each ballot requires a single yes or no vote for all of the stated proposed actions listed on that ballot.
Each of 2 ballots requires a single vote, for or against, 2 proposed amendments to the Declaration. 1 ballot requires a single vote for or against 3 proposed amendments to the Declaration, 1 new Article to the Declaration, and 1 new section to the By-Laws. The remaining ballot requires a single vote, for or against, 3 Amendments to the Declaration, and 2 Amendments to the By-laws.
After the voting started, the Manager put out an electronic notice to the community stating that one of the Amendments to the Declaration would not occur because what it proposed was not an option with our insurer, but all other amendments were important.
Your reply is time sensitive. Thanks.
Can a mail-in vote return date be extended beyond its initial stated return date?
Our Association has an important mail-in vote, in progress, on proposed changes to our Declaration and By-laws.
Under the North Carolina Nonprofit Corporation Act, 55A – 7- 08 Action by written ballot, the Statute says : (d) All solicitations for votes by written ballot shall indicate the time by which a ballot shall be received by the corporation in order to be counted.
The solicitation letter, from Management, that accompanied our voting package does state votes must be returned “no later than 24 April 2014”. However, it does not state returns later than that date will not be counted. Must it do so to comply with the law? Is the given date established as a deadline without doing so?
On April 22, the Manager put out a notice to the community asking them to return their votes “as soon as possible”.
On April 24, I asked the Manager, by e-mail, if the vote had closed. He replied: “It will go on until we have the results back. We now have a quorum, as the mail ballot emulates a meeting but can go past the initial date.”
Is this correct? If not, would you please refer me to text in the NCAA, the NCNCA or any other NC statute, or combination of them, that addresses conditions under which a deadline for a written vote can be extended. I have been unable to find a reference to a mail ballot emulating a meeting.
Thanks.
Unless your bylaws have some other provision for voting by written or absentee ballot, you are correct that NCGS 55A-7-08 requires that written ballots must have a stated deadline by which they must be returned. Without knowing the particulars of the situation, I cannot comment on your specific case – my comment is meant to be a general statement of the law.
Thank you. I am just wondering if the NCGS addresses extending written ballots past the initial deadline anywhere within it at all. I don’t expect any comment on my specific case.
NCGS 55A-7-08 is silent on the issue of whether or not the deadline for submitting written ballots (for action taken by members without a meeting) can be extended. My position has always been that since the statute doesn’t provide for an extension, it’s not allowed.
Can a Board vote to extend the return date for written ballots past the original deadline?
I read your May 5th response to the question of extending deadlines for written ballots, with great interest. I would like to know if your opinion on this would be altered in any way if the Board votes to extend the deadline to a later date, or votes to extend it indefinitely until some condition is met.
I stand by my previous reply on this issue. The statute doesn’t mention any extension of the deadline. If I was an HOA board member, I wouldn’t want to rely on the legal validity of a written ballot initiative that was approved only through the use of an extension of the voting deadline. But we have no clear answer.
Mike Hunter I have an additional questions Is there a difference between a temporary assessment and a special assessment?
If your CCR and by-laws do not refer to either of these assessments can we have them.
The laws in NC only refer to assessments in general. There is no mention of special or temporary assessments. Answering your specific question would require an analysis of your governing documents and the facts of your HOA’s situation.
This query is regarding the post which talks about restriction on percentage of units that can be rented. When we purchased the town home the limit had not yet reached. But some time after purchase the required limit has reached. Is there a rule that allows owners to rent the home, who purchased before the limit has reached? There is a law in CA which allows this. Is there something similar in North Carolina?
See below for California law:
From the CAR website:
[Quote]
SB 150 (Correa) CID Right-to-Rent “ There has been a trend among some homeowner associations to adopt restrictions that limit the ability of unit owners to rent their dwellings in Common Interest Developments (CIDs). The imposition of these rental restrictions diminishes an owner’s property rights by removing options that were available when the unit was purchased. C.A.R. sponsored SB 150, a re-introduction of C.A.R.’s AB 2259 (Mullin) of 2008, to protect the right of a CID owner to rent his or her unit, if that right existed at the time the owner purchased the unit.
Status: Signed by the Governor on July 8, 2011 (Chapter 62, 2011 Statutes)
[End Quote]
For an analysis of the Bill, see:
http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0101-0150/sb_150_cfa_20110624_112556_sen_floor.html
Here’s the text of the Bill as signed into law:
http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0101-0150/sb_150_bill_20110708_chaptered.html
The leasing restrictions were in place when you bought your unit. The fact that the rental cap had not yet been reached at that time does not exempt you from those restrictions.
Specific to your recent article about HOA rules, would you provide guidance specific to pool no smoking vs. smoking vs. designated smoking areas including means of enforcement, recent court rulings, and inclusion of rules in covenants.
I’m not aware of any court rulings on the subject of designated (non)smoking areas in common area pools. However, in North Carolina HOA and condo boards have the statutory authority to “regulate the use, maintenance, repair, replacement, and modification of common elements” and to “adopt and amend bylaws and rules and regulations.” There likely is no case law because the statutes are so clear on this issue. In general, rules/regulations governing the use of common areas do not have to be included in the covenants, nor recorded with the Register of Deeds.
Is it legal for an unelected Board of a voluntary POA to have an attorney prepare a new set of Declarations without input from property owners and then present that document to the property owners for an up/down vote while insisting changes, modifications or amendments will not be accepted?
See my column in the Charlotte Observer on this topic (the second reader question), which can be found here: http://www.charlotteobserver.com/2014/08/19/5115650/do-homeowners-need-to-pay-for.html#.VE63K4vF_5k
Just read the blog on the differences between HOA laws in NC & SC. I’m in SC in an older neighborhood that had a voluntary club to take donations to pay for entrance landscaping. Now a new neighbor wants to change it to a formal neighborhood association with new rules. Is it mandatory that we join if a simple majority votes it in? We specifically moved here because there was no HOA.
Unless there was a Declaration of restrictions recorded for your community that authorized the establishment of an HOA and spelled out it’s duty and authority, before the developer started selling lots, an HOA cannot be “forced” upon you later. Membership in and adherence to the rules of any such neighborhood association would be purely voluntary.
Do HOA boards have to allow access to minutes of the meetings? And is there a time requirement that they would need to do this by?
See this post and the comments following it:http://carolinacommonelements.com/2013/03/04/hoa-audits-and-open-board-meetings/
There is no stated time limit in the statutes, but presumably members would be entitled to the minutes as soon as they are completed by the corporate secretary.
I live in a very small development of single family homes in SC. The legal validity and legal authority of a secondary HOA that was formed by some residents (not by the original declarant) after our home purchase is questionable. Until the matter is legally resolved we have stated that we are not willing to commit to membership to this “new HOA”. (A new builder has bought remaining lots and been assigned declarant rights and they are at odds with him about legalities too.) Their president has told us we must be members of their organization. We have asked for them to provide us with proof we that must join, they have not. So this matter is unsettled as of now.
They have provided some maintenance to the common area/entrance sign. We have agreed to their request for money to pay our share of common area maintenance. They refuse to accept our money unless we also agree to full membership into their association. They have threatened to put a lien on our property despite the fact that we have never refused to pay them. My question is if they will not accept our money/payment because we won’t agree to their terms, how can they place a lien on us? Would it be legal for them to file a lien on us under these circumstances? Our thinking is that a lien used to collect a money that someone refuses to pay (which we have not) and that our disagreement about whether membership can be forced on us would be a separate legal issue?
The only way to answer your question is to have a South Carolina licensed attorney perform a title search, and analyze the recorded governing documents for your community.
We have an odd situation, we have an HOA that the developer was in control of since there were too few residences and the first 6 years we weren’t billed HOA dues since the development they deemed wasn’t ready, instead they paid the maintenance fees as the HOA. For the past three years we have been paying our annual dues. Now that there are enough residents the HOA has reverted to the homeowners and the board is now trying to collect for those years when we weren’t billed.
Can they do that? It seems that the window has long gone that they can collect past annual dues, especially since those fees have long been covered.
Providing you with a definitive answer would require a review and analysis of your community’s governing documents. But in general, the statute of limitations for bringing an action for breach of a restrictive covenant is six years, and in some cases ten years. Failing to pay assessments required by the Declaration would be considered a breach of the covenant.
I’m the current President of the small HOA of 28 owners, in the Low Country of SC. We are a small rural, farm community, and all “own” our one mile private road to state HWY.
HOA fees maintain one-lane, gravel road and road lighting. The HOA fees are $300.00 per year and they have maintained that rate for years.
Almost 30% not paying HOA fees, many owe for 5 or more years. How can I help my neighbors reduce our annual burden. Our annual budget approaching $10,000, and our balance is less than $100.
Everybody says we cant really do anything. Is that right? HELP!!!
You need to hire a SC-licensed HOA attorney. The remedies available to you depend almost completely on what your community’s governing documents say about the HOA’s authority to levy and collect assessments.
A HOA approves plans submitted by a homeowner to make structural changes to the exterior of his residence. The HOA states in its application for approval that the homeowner is to identify the contractor who will do the work and is to comply with local ordinances and regulations governing the construction work. If the HOA approves the application and turns a blind eye to the fact that a building permit was not secured and that the work done by the contractor was never inspected by the local building permit department, what liability might the HOA have if the improvements were to fail and cause damage to an adjacent property?
It depends on the language in the Declaration regarding architectural changes and approvals, BUT. . . the HOA has no authority to enforce building codes anyway. Only the local municipality can do that.
My question is can a husband or wife serve on the board if they are not on the deed? And secondly do residents vote who their board members will be?
The answers to your questions can probably be found by reading your association’s bylaws. There should be a section describing the qualifications of board members, which will reveal whether or not directors have to be members of the association – which usually means lot owners. And yes, board members are typically elected at the association’s annual meeting of members. Officers (president, vice president, treasurer and secretary) are appointed by the board. It is rare for boards to appoint officers who are not also board members.
Our board directors is in dispute over bylaws, since the original declarants turned everything over to the homeowners, some are at odds over the original bylaws. Are the original bylaws legal and binding? Or may they be changed?
Again, check your bylaws. There is probably a section towards the end that describes the process for amending the bylaws. The bylaws as originally adopted by the original board of directors would be binding unless and until they are amended.
It depends on what your governing documents say about assessments. Some documents allow common expenses that benefit only certain units to be assessed back against only those units benefitted. If your documents don’t have such a provision, then most likely it must be treated as a general common expense.
In NC, does the contracted property manager for a HOA have to be present for there to be a board meeting? Our manager has told us this.
How can we meet to evaluate their performance or consider changing?
There is no law in NC or SC that requires that a property manager be present at all board meetings, but the contract between the HOA and the management company may require it (though I’ve never seen that). You simply need to tell the manager that the board needs to go into executive session, at which no one but the directors may be present.
What % of HOA members must approve the spending of HOA dues on homeowner’s private property. There is no provision in the CCR for the HOA to spend money on private propoerty
There’s really no way to give you a meaningful answer. In general, HOA funds are to be used to maintain, repair and replace common property. There are circumstances under which HOA funds can be used for private property, but the analysis is very fact-dependent – and even if I had all the facts, I can’t provide legal advice to individuals through our blog. Thanks for reading.