PREPARED
BY THE LAW FIRM OF FORMAN ROSSABI BLACK, PA. P.O. BOX 41027, GREENSBORO, NC 27404 (336) 378-1899
THIS DOCUMENT PROVIDES GENERAL INFORMATION AND IS NOT LEGAL ADVICE OR A LEGAL
OPINION. ANY SPECIFIC QUESTIONS SHOULD BE DIRECTED TO A LAWYER AT FORMAN
ROSSABI BLACK OR TO ANOTHER ATTORNEY. Summary of Planned Community Act Provisions, Page 1 of 4
SUMMARY OF IMPORTANT PLANNED COMMUNITY ACT PROVISIONS
The
following provisions apply to most residential planned communities in
North Carolina, including those created before January 1, 1999:
• Unless Articles of Incorporation or Declaration
state otherwise, the Association may:
a. Adopt and amend bylaws, rules, and regulations;
b. Adopt and amend budgets for revenues, expenditures,
and reserves and collect assessments for common expenses;
c. Hire and discharge managing agents, employees,
agents, and contractors;
d. Institute, defend, or intervene in litigation or
administrative proceedings;
e. Make contracts and incur liabilities;
f. Regulate the use, maintenance, repair, replacement,
and modification of common areas;
g. Impose reasonable charges for late payment of
assessments, not to exceed the greater of $20 per month or 10% of any
assessment installment unpaid and, after notice and an opportunity to be heard,
suspend privileges or services provided by the Association (except access to
lots) during any period that assessments or other amounts remain unpaid for 30
days or longer;
h. After notice and an opportunity to be heard, impose
reasonable fines or suspend privileges or services provided by the association
(except access to lots) for reasonable periods for violations of the
Declaration, Bylaws, or rules and regulations of the association;
i. Impose reasonable charges in connection with the
preparation and recordation of documents;
j. Provide for indemnification of and maintain
liability insurance for officers, Board, employees, and agents;
k. Assign right to future income, including the right
to receive common expense assessments; and
l. Exercise any other powers necessary and proper for
the governance and operation of the association.
• Board and officers’ names and addresses must be
published within 30 days of election.
• Unless Declaration provides otherwise, the
Association is responsible for causing common areas to be maintained, repaired,
and replaced when necessary. The Association may assess lot owners as necessary
for such maintenance, repair, or replacement.
• A lot owner is responsible for damage caused to
common area.
PREPARED
BY THE LAW FIRM OF FORMAN ROSSABI BLACK, PA. P.O. BOX 41027, GREENSBORO, NC 27404 (336) 378-1899
THIS DOCUMENT PROVIDES GENERAL INFORMATION AND IS NOT LEGAL ADVICE OR A LEGAL
OPINION. ANY SPECIFIC QUESTIONS SHOULD BE DIRECTED TO A LAWYER AT FORMAN
ROSSABI BLACK OR TO ANOTHER ATTORNEY. Summary of Planned Community Act Provisions, Page 2 of 4
• Association is responsible for damage to a lot
caused by its agents.
• Lot owners may be fined or planned community
services or privileges suspended due to late payment of assessments or
violations of the Declaration, Bylaws, or rules and regulations. Unless the
Declaration provides otherwise, a hearing must be held before the Board or an
adjudicatory panel of no Board members. The owner must be given notice of the
charge, an opportunity to be heard and to present evidence, and notice of the
decision. Fines may not exceed $100 per day beginning five days after decision.
An adjudicatory panel decision may be appealed to the Board within 15 days.
• At least one Association meeting must be held per
year.
• Special meetings may be called by the President,
Board, or 10% of lot owners.
• Association meetings must be noticed with not less
than 10 nor more than 60 days by hand-delivery, U.S.
Mail, or electronic means (if designated by the owner).
• Notice of Association meetings must include the
agenda, including any proposed amendment to the Declaration or Bylaws, any
budget changes, and any proposal to remove a Board member or officer.
• At regular intervals, Board must allow lot owners an
opportunity to attend a portion of Board meeting to speak about issues or
concerns, subject to reasonable time restraints.
• Meetings of the Association and Board must follow Robert’s
Rules of Order Newly Revised (10th Edition).
• Unless Declaration provides otherwise, the Declarant must pay all common expenses until the
Association makes a common expense assessment.
• Any assessment remaining unpaid for 30 days
constitutes a lien on the lot when the claim of lien is filed with the Clerk of
Superior Court.
• Assessment liens of fines or attorneys’ fees only
must be enforced by judicial foreclosure.
• Service, collection, consulting, or administration
fees can only be collected if permitted in the Declaration.
• A judgment or order for assessments shall include
costs and reasonable attorneys’ fees for the prevailing party. Attorneys’ fees
on any collection action for delinquent
PREPARED
BY THE LAW FIRM OF FORMAN ROSSABI BLACK, PA. P.O. BOX 41027, GREENSBORO, NC 27404 (336) 378-1899
THIS DOCUMENT PROVIDES GENERAL INFORMATION AND IS NOT LEGAL ADVICE OR A LEGAL
OPINION. ANY SPECIFIC QUESTIONS SHOULD BE DIRECTED TO A LAWYER AT FORMAN
ROSSABI BLACK OR TO ANOTHER ATTORNEY. Summary of Planned Community Act Provisions, Page 3 of 4
assessment
are limited to $1,200 in uncontested cases.
• Association must keep sufficient financial records.
An annual income and expense statement and balance sheet must be available to
lot owners within 75 days after the fiscal year. A more extensive compilation,
review, or audit may be required by a vote of the Board or by a majority vote
of lot owners present and voting at the annual meeting or a special meeting
called for that purpose.
• No financial payments, including goods or services,
may be made to any officer or Board member or to a business, business
associate, or relative of an officer or Board member except as expressly
provided in the Bylaws or in payment for services or expenses of the
Association approved in advance by the Board.
• In an action to enforce the Articles of
Incorporation, Declaration, Bylaws, or rules and regulations, the court may
award reasonable attorneys’ fees to the prevailing party if allowed in the
Declaration.
• Members generally may fly U.S. or N.C. flag or
display political signs.
The
following provisions apply to most residential planned communities in
North Carolina created on or after January 1, 1999:
• Provisions of the Act may not be varied by
agreement, unless allowed by the statute.
• Zoning and building codes may not prohibit/discriminate
against planned communities.
• Eminent domain issues are addressed.
• Other state statutes are made supplemental to the
Act.
• Procedures for creating, altering, terminating,
merging or consolidating planned communities provided.
• The Declaration prevails over the Bylaws in the
event of a conflict.
• Unless Declaration provides otherwise, the
Declaration may be amended by the affirmative vote or signed written agreement
of 67% of Association votes.
• An adopted, recorded Declaration amendment cannot be
challenged after one year.
• Associations must be incorporated as nonprofit
corporations.
PREPARED
BY THE LAW FIRM OF FORMAN ROSSABI BLACK, PA. P.O. BOX 41027, GREENSBORO, NC 27404 (336) 378-1899
THIS DOCUMENT PROVIDES GENERAL INFORMATION AND IS NOT LEGAL ADVICE OR A LEGAL
OPINION. ANY SPECIFIC QUESTIONS SHOULD BE DIRECTED TO A LAWYER AT FORMAN
ROSSABI BLACK OR TO ANOTHER ATTORNEY. Summary of Planned Community Act Provisions, Page 4 of 4
• Unless Articles of Incorporation or Declaration
provide otherwise, the Association may:
a. Cause additional improvements to be made as part of
the common area;
b. Acquire, hold, encumber, and convey any real or
personal property, provided that common elements can only be conveyed or
subjected to a security interest with 80% written approval (or higher if
required by Declaration);
c. Grant easements, leases, licenses, and concessions
over common areas; and
d. Impose and receive payments, fees, or charges for
the use, rental, or operation of the common areas and for services provided to
lot owners.
• Unless otherwise provided, Board may act on behalf
of the Association.
• Within 30 days after adoption of proposed budget,
Board must provide a summary and notice of the meeting to consider ratification
of the budget, including a statement that the budget may be ratified without a
quorum. The meeting must be held not less than 10 nor
more than 60 days after the notice. The budget is ratified, even without a
quorum, unless a majority of all lot owners reject the budget.
• Lot owners must elect a Board of at least 3 by
termination of Declarant control.
• Any contract or lease entered into by the Declarant that is not bona fide or was unconscionable to
the lot owners may be terminated after the Board elected by owners takes office
with not less than 90 days’ notice.
• Liability of any party causing damage to common
areas can be determined by an adjudicatory panel, and any award of monies is a
lien on the owner’s property.
• Unless otherwise provided in the Bylaws, a quorum of
10% must be present at the beginning of a membership meeting and of 50% at the
beginning of a Board meeting.
• In the event a quorum is not present at the
beginning of a meeting, the meeting may adjourn to a later date by majority
vote, at which time the quorum is halved. Quorum continues to reduce by 50%
until a quorum is present.
• If only one owner is present at a meeting, that
owner may cast all the votes of the lot.
• Some statutes of limitation are tolled until Declarant control terminates.
• Unless otherwise provided in the Declaration,
surplus funds after payment of common expenses, funding of reserves, and
prepayment of reserves are to be paid or credited to lot owners.
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