Managing Rising HOA Costs: A Guide for Board Members in North Carolina

Managing rising costs is one of the biggest challenges facing HOA board members today. From increasing vendor expenses to higher insurance premiums, communities throughout North Carolina and the Carolinas are feeling the pressure. For many boards, the challenge isn’t just balancing the budget—it’s doing so while maintaining homeowner trust and satisfaction.

So how can HOA boards manage rising costs without upsetting homeowners?

Understanding the Reality: Costs Are Rising Everywhere

Rising costs aren’t unique to your community—they’re impacting homeowner associations nationwide.

Inflation, labor shortages, supply chain challenges, and increased service demands are all contributing to higher expenses. Vendors are adjusting pricing, insurance premiums continue to climb, and routine maintenance costs are higher than they were just a few years ago.

For HOA boards, this creates pressure from both sides:

• Financial obligations are increasing

• Homeowner expectations remain high

That tension is where strong, proactive leadership becomes essential.

The Risk of Avoiding Necessary Increases

It may feel easier in the short term to delay raising assessments or work within an unchanged budget. However, postponing necessary adjustments often leads to more significant challenges over time.

These can include:

• Deferred maintenance that results in more costly repairs

• Underfunded reserves that increase the likelihood of special assessments

• Declining service quality that impacts homeowner satisfaction

• Strain on the long-term financial stability of the association

In many cases, small, well-planned increases are far less disruptive than sudden, larger financial corrections.

Communication Builds Trust

One of the most common sources of homeowner frustration isn’t the increase itself—it’s the lack of clear communication around it.

HOA boards that communicate early and consistently often experience less resistance and greater understanding from homeowners.

This includes:

• Explaining why costs are increasing

• Outlining which expenses are impacted

• Sharing how financial decisions are made

• Reinforcing the board’s responsibility to protect the long-term financial health of the community

Transparency helps reduce confusion, minimize pushback, and build trust across the community.

Focus on Value and Accountability

Homeowners want to feel confident that their assessments are being used responsibly.

Shifting the conversation from “cost increases” to “value and accountability” can make a meaningful difference.

This can include:

• Reviewing vendor options to help identify competitive pricing

• Prioritizing projects based on necessity and long-term impact

• Maintaining common areas to support property values

• Investing in preventive maintenance to help reduce the likelihood of larger expenses later

When boards take a proactive, organized, and financially responsible approach, communities often experience fewer surprises and stronger homeowner confidence.

The Importance of Long-Term Financial Planning

Rising costs are much easier to manage when they’re anticipated—not reacted to.

Tools such as reserve studies, multi-year budgeting, and regular financial reviews support boards in:

• Planning for future expenses

• Reducing the likelihood of special assessments

• Spreading costs more evenly over time

• Making informed, data-driven decisions

This type of planning helps create stability and predictability for both the board and homeowners.

How AMG Supports HOA Boards

At Association Management Group (AMG), we understand that managing rising costs requires both structure and clear communication.

We support HOA boards throughout North Carolina and the Carolinas by helping organize and streamline key processes, including:

• Providing detailed financial reports and supporting the board through the budget preparation process

• Coordinating reserve studies and long-term planning efforts

• Assisting the board in reviewing vendor contracts and comparing options to identify potential cost savings

• Supporting consistent and transparent communication with homeowners

• Helping ensure board decisions are well-documented and aligned with industry best practices

Our role is to support—not replace—the board’s authority, providing the tools and organization needed to make informed decisions with confidence.

Finding the Right Balance

There’s no perfect way to implement cost increases without concern—but there is a more effective approach.

It comes down to three key principles:

• Be proactive, not reactive

• Communicate clearly and consistently

• Focus on long-term financial stability

Boards that follow these principles are better positioned to navigate financial challenges while maintaining homeowner trust.

The Bottom Line

Managing rising HOA costs isn’t just about numbers—it’s about leadership, communication, and planning.

Homeowners may not always welcome increases, but they are more likely to support decisions when they understand the reasoning behind them and see that their board is acting responsibly.

With the right structure and support, boards can approach these challenges with greater clarity and confidence.

Ready for Support?

Looking for support in managing your community’s budget and planning for the future?

Association Management Group (AMG) partners with HOA boards across North Carolina and the Carolinas to simplify financial planning, improve communication, and support long-term success.

Visit www.amgworld.com to learn more about how we can support your community.

North Carolina Closing Costs: Big Savings on Home Sales

Buying or selling a home is one of the biggest financial transactions most people make, and closing costs add important expenses to the process. In North Carolina, closing costs are relatively low compared to many states, averaging about 0.56% of the sale price — around $2,214 on a median-priced $395,400 home. Both buyers and sellers share these costs, with buyers typically paying for items like loan origination fees, title insurance, and inspections, while sellers usually cover real estate commissions, excise taxes, and prorated property taxes. Many of these costs are negotiable, and programs like the NC Home Advantage Mortgage can help first-time buyers reduce expenses, making it essential to work with a knowledgeable local real estate agent.

Read More: Bankrate

Change hits NC real estate

The real estate market is undergoing a major shift, driven by a convergence of economic pressures, regulatory changes, and evolving consumer behavior—especially in North Carolina. A recent conversation with veteran broker Sandy McAlpine revealed that this isn’t just a market slowdown, but a complete transformation requiring real skills, strategy, and resilience. From the NAR commission settlement to high mortgage rates and investor struggles in short-term rentals, many once-thriving agents and homeowners are now facing gridlock and financial strain. The “easy money” era is over, and with new legislation targeting wholesalers, the industry is entering a more regulated, skill-driven phase where only the intentional will thrive.

Read More: CarolinaJournal

6 articles examine how North Carolina homeowners confront HOA regulations

These six articles shed light on growing tensions between North Carolina homeowners and their HOAs. From homeowners nearly losing their properties over small fines to others spending years and thousands of dollars fighting HOA penalties, the stories highlight serious concerns. Issues include limited legal protections, aggressive fee collections, foreclosure threats, and a lack of oversight. The coverage also explores proposed reforms to curb HOA power and improve transparency and accountability. Click the source below to read the articles.

Read More: TheCharlotteObserver

Senate Bill 378 Could Devastate North Carolina’s Community Associations—And Burden Responsible Homeowners

This article was originally published on May 8, 2025 by Jim Slaughter for Law Firm Carolinas Blog.

Senate Bill 378, recently passed by the North Carolina Senate, contains a provision that could unintentionally cause enormous financial harm to North Carolina’s 15,000+ homeowner and condominium associations . If left uncorrected, this language would punish the homeowners who pay their dues on time—while giving a free pass to those who don’t.

A Well-Intentioned Bill With a Deep Flaw

SB 378 was introduced to address concerns about associations overreaching—particularly when it comes to violations of rules and covenants. That’s a fair issue to explore. Many agree that when disputes arise over governing document violations—where facts may be unclear or subjective—a judge should have some discretion in whether to award attorneys’ fees.

But the bill goes far beyond that.

As currently written, SB 378 makes attorneys’ fees discretionary in all association-related legal cases—including lawsuits to collect unpaid assessments. That change may have been an oversight, but its consequences would be serious and far-reaching.

Dues Collection Isn’t Optional—It’s the Lifeblood of a Community

Associations rely entirely on owner assessments to function. There are no profit margins or financial cushions. Assessments cover basic services: power, insurance, maintenance, and trash pickup. Many of these associations don’t even have amenities—just infrastructure to maintain. While some associations charge high assessments and provide numerous amenities, most associations in North Carolina only take care of essential services for owners and have no discretionary funds. There are even Habitat for Humanity associations for first-time home buyers!

Every owner agrees to pay association dues when they purchase a home in the community. The amount is known up front, disclosed by law, and recorded in filed public documents. If assessments aren’t paid, there is no backup funding and only one place the money can come from–the other paying owners.

SB 378 Would Shift Delinquent Owners’ Costs Onto Everyone Else

Under current law, if a homeowner doesn’t pay and the association is forced to sue, the court charges attorneys’ fees to the nonpaying owner. That ensures the cost of enforcement falls on the person who breached their obligation—not on their neighbors.

SB 378 would change that. Even when an association wins in court, it might be unable to recover legal costs. In other words, the association might have to pay an attorney $500 to collect $500—or more. That could make enforcement of assessments irrational and unsustainable.

If SB 378 passes in its current form, many associations will have no choice but to stop pursuing collections. And once word spreads that there’s no real consequence for nonpayment, delinquencies will rise. The result: paying homeowners will be forced to make up the shortfall, or services will be cut.

This Isn’t About Overreach—It’s About Survival

The concerns that prompted SB 378 related to some associations aggressively enforcing minor violations. That’s not the issue here. There’s a major difference between:

• Violations, where facts can be disputed, and

• Assessment nonpayment, which is clear and documented—either the dues were paid or they weren’t.

In violation cases, it may make sense to allow judicial discretion with attorneys’ fees. But applying the same rule to dues collection is a mistake—one that would make it harder for associations to function and easier for owners to ignore their financial obligations.

Associations Are Already Cautious and Transparent

Associations do not rush to collections. The process is deliberately slow and heavily regulated under state law. Multiple notices must be sent—by different methods and to multiple addresses—over the course of several weeks or months. The association’s only goal is to secure payment of the owed assessments, not to pursue legal action. Only after extended nonpayment and repeated outreach does a final “15-day letter” go out, offering one last opportunity for the owner to pay without owing any attorney’s fees. This level of notice and leniency far exceeds what is required of banks, credit card companies, or utility providers.

Associations don’t want to sue their owners. But they must—because they have a fiduciary duty to every other member of the community to pay the association’s bills.

This Can—and Should—Be Fixed

The issue with SB 378 is correctable. The provision about discretionary attorneys’ fees should be limited to violation enforcement cases only. It should not apply to the collection of assessments. That clarification would protect associations without undermining the bill’s broader goals.

The Bottom Line

Without this change, SB 378 would cause real harm. It would:

• Discourage assessment collection.

• Encourage nonpayment.

• Shift costs to other homeowners who must shoulder the non-paying owner’s costs—essentially forcing them to pay twice.

• Threaten the financial viability of entire communities.

This may not have been the legislature’s intent—but that makes it all the more important to fix. North Carolina’s associations, and the millions of homeowners they serve, are counting on it.

NC Community Association Legislative Update – March 20, 2025

This article was originally published on March 20, 2025 by Jim Slaughter for Law Firm Carolinas Blog.

Yesterday, House Bill 444 (the “Homeowners Association Reform Bill”) was introduced. (For details, see What House Bill 444 Would Mean for North Carolina Condominium & Homeowners Associations). Today, the trend continued with the filing of Senate Bill 378 (“HOA Revisions”).

The structure and tone of SB 378 closely resemble last session’s HB 542, though it introduces several new provisions. Some of these proposals have appeared in previous legislative sessions. (For background, see Legislative Update – NC House Select Committee on HOAs Files New Bill and NC Community Association Legislative Update – February 28, 2024)

The bill spans 18 pages, but the key provisions are summarized below. To help navigate the many proposed changes, they are presented in the order they appear in the bill.

1. Management Contracts: Contracts between associations and management companies cannot exceed two years. Additionally, they cannot include an automatic renewal provision requiring more than 60 days’ notice for termination. If a contract does automatically renew, the association retains the right to terminate it for any reason with 90 days’ notice.

2. Prohibited Management Fees: Management companies cannot be compensated based on the amount of fines collected from an association or unit owner. (For context, our firm’s attorneys are not aware of any such business model currently operating in North Carolina.)

3. Parking Restrictions: Without explicit authorization in the declaration, an association may not enforce restrictions on parking personal vehicles on public streets—unless the authority to regulate parking has been expressly delegated by the Department of Transportation (DOT) or local government. (Currently, no such delegation process exists.) The term “personal vehicle” excludes motor homes, self-propelled RVs, and vehicles primarily used for commercial purposes.

4. Restrictions on Home-Based Lessons: Associations cannot impose fines for violations related to tutoring, educational lessons, academic lessons, or music lessons conducted on an owner’s property—provided the group consists of no more than five people at a time. This applies regardless of noise levels or time of day and extends to townhomes and condominiums with shared walls.

5. Lender Questionnaires and Statements of Unpaid Assessments: Fees for preparing a lender’s questionnaire or a statement of unpaid assessments cannot exceed $200 per item. An additional $100 may be charged for expedited requests requiring completion within 10 days. Beyond these charges, neither the association nor its managing agent may impose fees on a unit owner or prospective purchaser in connection with a unit’s conveyance unless the fee is expressly authorized in the declaration and not otherwise prohibited by law. A violation of this provision automatically constitutes an unfair and deceptive trade practice.

6. Copying Costs for Association Records: Costs for providing copies of association records cannot exceed the actual cost of photocopying.

7. Architectural Review Procedures: Architectural review procedures must be established and followed as outlined in the association’s governing documents, which must specify a maximum timeframe for issuing a decision or reconsideration request. A decision must be made within 90 days of submission, and all decisions must be in writing, made in good faith, and not unreasonable, arbitrary, or capricious. If a proposal is disapproved, the decision must include an explanation for the disapproval and, if the determination was not issued by the executive board, a description of the process for reconsideration by the executive board.

8. Violation Hearings and Fines: For violations of governing documents, written notice of a hearing must be sent to the owner at least 10 days in advance and must include a general description of each alleged violation and the required corrective action. Following the hearing, written notice of the decision must be sent, specifying each violation found and the required corrective action. Fines may be imposed at a rate of up to $100 per day but cannot exceed a total of $2,500 per violation, regardless of its duration. Liens related to fines must be filed with the court within 90 days of imposition.

9. Collection of Delinquent Assessments: For the collection of delinquent assessments, notice must be sent to owners via both physical mail and email, if the owner has designated an email address. A copy of any claim of lien or certificate of service must also be sent by email if applicable. A lien related to fines is extinguished unless enforcement proceedings are initiated within one year of filing the claim of lien. Foreclosure for assessment delinquencies cannot be initiated until the delinquency has persisted for 180 days or more. The bill imposes additional notice requirements on foreclosure proceedings, including new rules regarding continuances of hearings. Judicial foreclosure is eliminated as an option for liens related to fines and violations; instead, associations must pursue a civil action to obtain a judgment.

10. Attorney’s Fees in Assessment Collections: The bill modifies the rule on attorney’s fees in assessment collection matters, shifting them from the delinquent homeowner to the association at the court’s discretion.

11. Contract Transparency: Upon proper notice, an owner or their agent may inspect and copy any contract between the association and a management company.

12. Automatic License Plate Readers: Associations must maintain written records of any policy related to automatic license plate reader systems. The bill also amends NCGS 20-183.33 to govern the use of such systems by associations.

13. Mandatory Mediation for Disputes: Mediation would become mandatory before filing lawsuits, except for assessment collection matters, unless both parties agree to waive it. Since North Carolina established voluntary pre-litigation mediation for HOA/condo disputes in 2013, this change may slow the resolution process, particularly for urgent matters. (See New Voluntary Mediation Law for HOAs and Condos and New Mediation Program to Help Resolve North Carolina HOA/Condo Disputes.)

14. DOJ Oversight of Homeowner Complaints: The North Carolina Department of Justice would be tasked with collecting and publishing data on homeowner complaints against associations. While the DOJ would not mediate or arbitrate disputes, it would track complaint trends and report findings to the General Assembly.

FINAL THOUGHTS
While these proposals aim to address homeowner concerns, the bill’s details could lead to unintended consequences. Poorly drafted legislation may create confusion or financial strain for both associations and homeowners. For instance, the six-month foreclosure requirement could allow homeowners to fall significantly behind on dues, forcing others to absorb the financial burden. The shifting of attorneys’ fees from a nonpaying owner to the association will increase costs on paying owners and could lead to inconsistent outcomes even within the same association.

No single solution fits all homeowner and condominium associations, as communities vary widely in size and structure. North Carolina is home to both small, two-home associations and large-scale developments with thousands of members. A one-size-fits-all approach to community association law may have unintended repercussions. Our firm, which represents associations across the state, understands the complexities these communities face and is available to provide guidance and insights to legislators as they evaluate this bill.

The full bill can be found at SB 378.

Source: BlogLawFirmCarolinas

Note From Editor: The proposed legislative updates underscore the importance of balancing homeowner protections with the operational needs of community associations. While thoughtful reforms can promote transparency and accountability, a one-size-fits-all approach may unintentionally burden responsible homeowners and limit a board’s ability to manage effectively. Associations rely on timely assessment payments and clear governance structures to maintain common areas and deliver essential services. As legislation evolves, it is critical that both boards and residents remain informed, communicate openly, and work together to ensure compliance and fairness for all.

Fight over chickens goes to NC Supreme Court for final ruling

Mary Schroeder of Union County has been battling her HOA for years over keeping chickens, which she considers pets. Although initially told by the HOA that chickens were allowed as long as they weren't livestock, the HOA later changed its stance and fined her $100 a day, totaling $31,500. A jury sided with the HOA, forcing the family to pay the fines and move, but an appellate court later ruled the chickens were indeed pets. The final outcome now rests with the North Carolina Supreme Court, which was set to make a ruling on April 22nd.

Source: WCCBCharlotte

Note From Editor: This case highlights the importance of clear communication and consistent enforcement of unambiguously written community covenants and rules. Associations should apply these standards fairly and follow due process as outlined in their governing documents and state law. Ultimately, communities function best when both boards and homeowners have aligned expectations, understand their roles, and work together with mutual respect and transparency.

Trump taps western NC real estate broker as Austrian ambassador

President-elect Donald Trump nominated Art Fisher, a real estate broker from western North Carolina, as the U.S. ambassador to Austria. Fisher, president of Fisher Realty, has been an active supporter of "America First" policies and a donor to multiple Republican campaigns in the 2024 cycle. He is also involved in several organizations, including Brevard College, Pisgah Health Foundation, and the North Carolina Travel and Tourism Board. Fisher holds degrees in business and corporate communications from the College of Charleston and has traveled extensively worldwide.

Trump announced four other ambassadorial nominations: George Glass (Japan), Lou Rinaldi (Uruguay), Stacey Feinberg (Luxembourg), and Leah Francis Campos (Dominican Republic). All nominations require Senate confirmation.

Read More: NC Newsline

Are HOAs allowed to ban street parking in NC neighborhoods? Here’s what legal experts say

Homeowners’ associations (HOAs) in North Carolina are stirring debate over their power to enforce street parking bans, a common rule designed to address safety and aesthetic concerns. Recent discussions on social media platforms like Nextdoor highlight divided opinions, with some residents frustrated by restrictions that limit parking options for families or guests, while others advocate stricter enforcement to avoid street clutter and safety hazards.

Under the North Carolina Planned Community Act, HOAs established after 1999 have the authority to regulate parking, even on public streets, if outlined in their community’s restrictive covenants (CCRs). Legal experts note that these rules aim to maintain order, but they are often contentious among residents.

A proposed bill could change this dynamic by prohibiting HOAs from enforcing parking rules on public roads maintained by the state or local governments, regardless of what is stated in the CCRs. If passed, this legislation would limit HOA authority and potentially resolve ongoing conflicts.

Source: The Charlotte Observer

I’ve owned my North Carolina townhouse since 2023 — but now my HOA is charging me $13K for hailstorm damage that happened 2 years before I bought. What are my legal options?

When buying a home within an HOA, you're responsible for costs, including any special assessments imposed after you move in, even if the damage occurred before your purchase. Homeowners insurance may cover these costs if you have loss assessment coverage, but if not, you could be left paying out of pocket or negotiating a payment plan with the HOA.

Read More: MSN Moneywise

Editors Note: When owning a home in a planned community, even though the association is responsible for certain maintenance duties, other issues, such as storm damage, may fall on the homeowner. In these communities, homeowners typically carry their own insurance and are responsible for making repairs related to covered perils and/or items not designated as the association’s responsibility. Additionally, homeowners may be responsible for costs like special assessments imposed after they move in, even if the damage occurred before their purchase. It’s important to check your covenants and policies carefully, particularly to understand your maintenance responsibilities and to see if you have loss assessment coverage, which may help cover the costs, in some instances. While this may seem onerous, when compared to buying a single-family home, the same or similar risks and responsibilities generally exist in both situations.

North Carolina Hurricane Helene Homeowner Resources

This article was originally published on October 15, 2024 by Community Association Institute in Disaster Recovery Resources webpage for Community Association Institute.

Community Association Institute- Disaster Recovery Resources

The devastation from Hurricane Helene has impacted communities of all sizes and types in North Carolina. CAI supports those communities recovering from this deadly storm and working to remove physical hazards in the way of recovery efforts. CAI has gathered the below information on current state, local, and federal resources to assist with the difficult task of rebuilding and recovering, online at: https://www.caionline.org/disaster-recovery-resources/.

FEMA continues to prioritize recovery efforts, including search and recovery, shelter, power, water, and other critical resources for hospitals, first responders, and those with life-threating circumstances.

IMMEDIATE DEBRIS REMOVAL

North Carolina Updated Disaster Declaration Highlights Debris Removal for Community Associations

Debris removal has been approved for Emergency Protective Measures (Category B)

Emergency protective measures conducted before, during, and after an incident are eligible if the measures:

• Eliminate or lessen immediate threats to lives, public health, or safety; OR

• Eliminate or lessen immediate threats of significant additional damage to improved public or private property in a cost-effective manner.

Community associations must work with the local municipal authorities to coordinate debris removal on public and private roads. All public and private roads should be covered under the local municipal debris removal efforts. It is important to note that community associations will not be reimbursed by FEMA or the locality for debris removal. The community MUST allow the locality to remove the debris (on both private and public roads).

For private roads, communities will be required to:

(a) Authorize the locality to remove the debris

(b) Indemnification FEMA and the locality from claims raised by debris removal.

NOTE: Communities seeking FEMA support for debris removal MUST work with their local municipality. FEMA does not provide money to community associations for debris removal. FEMA provides support and funding to the local municipality.

Common Area Critical Infrastructure Repairs

Community Association Critical Repairs of Common Area Infrastructure: Once communities move to phase II of recovery – following efforts related to life-safety – communities should:

· For removal of debris in and out of the community, that is considered life safety, contact the local municipality and coordinate debris removal.

· For other issues, not life threatening:

o Contact your insurance carrier to explore coverage.

o Contact the U.S. Small Business Association to inquire about low interest disaster loans and/or grant programs - https://www.sba.gov/funding-programs/disaster-assistance/hurricane-helene

o Contact the North Carolina Dept. of Public Safety - https://www.ncdps.gov/our-organization/emergency-management/hurricane-helene#Safety-8279

Individual Homeowner Resources

FEMA can provide individual assistance to condo owners and homeowners of housing cooperatives and single-family homes for their owner-occupied units in federally declared disaster areas.

However, FEMA will not help with damaged common areas or items that are the responsibility of the condominium association, housing cooperative, or homeowners association. Homeowners who rent out their units may not be eligible for FEMA assistance.

To qualify for FEMA assistance, you must:

· Be a U.S. citizen, non-citizen national, or qualified non-citizen

· Provide proof of identity and occupancy

· Provide proof of ownership for your home

· Have a primary residence in a disaster area that you can't access or live in

· Have no insurance or have filed a claim that doesn't cover all your losses

You can apply for FEMA assistance by: Visiting DisasterAssistance.gov, Using the FEMA mobile app, Calling the FEMA helpline at (800) 621-3362, and Visiting a Disaster Recovery Center.

You can expect FEMA assistance to last for up to 18 months after the disaster declaration, but it may be extended in some cases.

State Resources

North Carolina State Information and Resource Pages:

• North Carolina Department of Public Safety Hurricane Helene Resources Page- https://www.ncdps.gov/our-organization/emergency-management/hurricane-helene

• North Carolina Board of Elections Information Page- https://www.ncsbe.gov/voting/upcoming-election/helene-recovery-and-voting

• North Carolina Department of Insurance Hurricane Helene Information Page- https://www.ncdoi.gov/hurricane-helene-response-and-recovery

• North Carolina Department of Health and Human Services Hurricane Helene Resources Page- https://www.ncdhhs.gov/assistance/hurricane-helene-recovery-resources

List of counties included in Governor Cooper’s Major Disaster Declaration (click for designated website with disaster resources/updates, if available): Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Catawba, Clay, Cleveland, Gaston, Haywood, Henderson, Jackson, Lincoln, Macon, Madison, McDowell, Mecklenburg, Mitchell, Polk, Rutherford, Swain, Transylvania, Watauga, Wilkes and Yancey

How to Apply for FEMA Assistance Press Release: https://governor.nc.gov/news/press-releases/2024/09/29/how-apply-fema-assistance-after-hurricane-helene

Federal Resources

FEMA-designated disaster areas in North Carolina: https://www.fema.gov/disaster/4827/designated-areas

FEMA has an information page for each state impacted by Hurricane Helene with a map showing the areas recognized as disaster areas:

• Alabama- https://www.fema.gov/disaster/3618/designated-areas

• Florida- https://www.fema.gov/disaster/3615/designated-areas

• Georgia- https://www.fema.gov/disaster/3616/designated-areas

• North Carolina- https://www.fema.gov/disaster/3617/designated-areas

• South Carolina- https://www.fema.gov/disaster/3619/designated-areas

FEMA also has a general landing page for Hurricane Helene with links to relevant resources and state agencies: https://www.fema.gov/disaster/current/hurricane-helene.

Federal Disaster Assistance Resources: https://www.disasterassistance.gov/

Source: Community Association Institute (CAI)

NC Real Estate Commission’s property flood history disclosure rule started July 1st

Starting July 1st, North Carolina will require sellers to disclose detailed information about their properties' flood risk and history, allowing homebuyers to make more informed decisions. This rule change, finalized by the North Carolina Real Estate Commission, was prompted by a petition from several nonprofit groups seeking greater transparency in real estate transactions. Sellers will now need to provide information on past flood incidents, insurance claims, and existing flood insurance premiums. While the new requirements may affect property values, advocates argue that increased transparency will ultimately benefit the real estate market and improve market efficiency.

Source: PortCityDaily

NC Home Builders Association pushes building code reform, gives maximum donations to local officials

The North Carolina Home Builders Association (NCHBA) is lobbying heavily and donating to legislators to push Senate Bill 166, which aims to expedite regulatory processes and reform the Building Code Council. This bill has raised concerns about weakening safety standards and delaying energy efficiency updates. The NCHBA's significant political spending continues to influence various legislative initiatives, including easing development restrictions on historical sites.

For full article: NC Home Builders Association pushes building code reform, gives maximum donations to local officials. PortCityDaily.com

CAUTION: WHEN NC HOA LAWS CHANGE, PROPERTY VALUES AND MORE ARE AT STAKE

During the 2023 state legislative session, both Democrats and Republicans introduced three bills aimed at enhancing oversight of HOAs in North Carolina, with the primary objective of restricting their authority to foreclose on homeowners. It is anticipated that significant statutory alterations may result in unintended repercussions, potentially causing adverse effects on property values, associations and individual homeowners. Click the link below for additional information.

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DON’T FORGET! NORTH CAROLINA ANNUAL ASSOCIATION ACTION ITEMS

In times of unforeseen challenges, it is beneficial to receive prompts for tackling recurring tasks that might be overlooked. As we navigate through obstacles, prioritize addressing these tasks at the start of the year. Consider this your nudge to revisit North Carolina's annual obligations, allowing you to proactively address them and avoid overlooking crucial steps.

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Fire Damages Several Apartments and Condos in Fayetteville, NC

After a fire damages apartments and condos in Fayetteville, NC at Stewarts Creek Condominiums, people are trying to find a new place to live. Luckily, all tenants and pets were rescued and are safe. Click to read more.

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Are HOAs allowed to ban street parking in NC neighborhoods? Here’s what legal experts say

In Charlotte, NC, homeowners have been in controversy over banning street parking. While some are okay with the enforcement of no street parking for safety reasons, others argue that it leaves no room for visitors or families with multiple drivers. What do you think? Should street parking be banned?

Read more

Two Pending NC Bills Would Significantly Change Association Governance and Practice

Two pending NC bills regarding HOA’s are concerning associations. These two bills enforce rules on collection action for late payments, and landlord-tenant issues. Read more and let us know what you think about these pending bills.

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NC Bill to Restrict HOA/Condo Collections Would Harm Associations & Owners

NC Bill to Restrict HOA/Condo Collections Would Harm Associations & Owners

Posted on April 26, 2023 by Jim Slaughter

https://blog.lawfirmcarolinas.com/bill-to-restrict-hoa-condo-collections-would-harm-associations-homeowners/

As described in my recent NC Community Association Legislative Update, one bill moving through the NC General Assembly is HB 542 “Protect Homeowners’ Rights.” In addition to placing further requirements on associations as to the collection of past due assessments, the proposal would prohibit the filing of a lien against an owner who fails to pay obligatory association assessments unless the amount is $2,500 “or one year of unit owners’ association assessments, whichever is lesser.”

The bill’s attempts to add protections to owners not paying obligatory dues may be well intentioned, but such a dollar cap before a lien can be filed will almost certainly harm all other owners in the association. The association’s expenses do not stop, even if assessments can’t be obtained from certain owners.

NOTE: This is not a bill to prevent foreclosure unless the owner owes $2,500 or one year of assessments–it prevents all even the filing of a lien on the non-paying owner’s property.

While a $2,500 or one-year minimum threshold before assessments can be collected might seem reasonable and charitable to owners, it would almost certainly harm associations and other owners due to the following:

1. Given varying costs of living, assessments tend to be lower in North Carolina than in bigger, more expensive states or northern cities. We have associations with few amenities and limited common area or possibly just insurance on common elements or an entrance sign to maintain. It would take YEARS for owners to accrue $2,500 in assessments. North Carolina is not a super lien state (many states have a provision that if a mortgage is foreclosed, the bank must pay the association so many months of assessments). As a result, in North Carolina the lot could be sold or the property foreclosed upon long before the association could go after the funds.

2. To not even be able to file a lien will mean that owner’s assessments will likely be lost. The property will get sold free and clear or a mortgage will foreclose and all assessments will be lost (as happens in states without a super lien statute). The sometimes-suggested alternative of bringing an actual lawsuit in the courts costing many thousands of dollars and at least a year in litigation to recover $1,000 in assessments is impractical.

3. From a fairness standpoint, putting in such a cap basically means that more affluent associations can go after owners, but less affluent associations will have a deficit. As an example, a downtown condominium that charges $2,500 monthly assessments would reach the limit immediately. On the other hand, we have associations where it would take five years to reach the threshold and would have to get more money from existing owners. The legislators introducing the bill may think it is pro-homeowner, but it is only pro-nonpaying homeowner, as it will certainly be negative for the 95% of owners who are paying timely and must pay more.

4. Dues are not less significant to smaller, less affluent associations. An association is a zero-sum game. There is no means of making up lost funds other than paying owners paying more, which may not be practical. Since the assessments may pay for items such as electricity or insurance on the common elements, those services will get cancelled.

5. Both the obligation for the assessments and the right to lien and foreclose are part of the contract that every owner agreed to when buying into the community.

6. At the end of the day, a lien for nonpayment of property assessments is much like other real estate liens, including materialman’s or mechanic’s liens. We don’t have state laws that prohibit a plumber or contractor from going after an owner for non-payment of work on the property unless it reaches a certain dollar amount. Associations should not be treated differently.

7. If you put a cap, such as $2,500, below which you cannot effectively pursue collections, won’t owners go into arrears just less than that? There would be nothing to do as to the owners who keep their balance at $2,499, but that expected money which is part of the budget will be lost to the association.

8. I’m don’t practice constitutional law, but the proposal as worded when applied to existing associations (versus future ones) seems to run afoul of the Contracts Clause  of the US Constitution (“No state shall pass any Law impairing the obligation of contracts.”). Here, the State would be interfering with the existing contract of the declaration. Rather than protecting private contract rights, this proposal would void them.

HB 542 may be well intended but would have very negative unintended consequences. An overwhelming number of NC community associations have low assessments. To those owners, though, it is significant money, and they should not be forced to pick up the deficit from other owners who fail or refuse to abide by their contractual obligations.

The bill and its current status can be found at https://www.ncleg.gov/BillLookUp/2023/H542.

Proposed NC Law Changing Declaration Amendments Would Harm Associations and Owners

As described in my recent NC Community Association Legislative Update, an HOA/condo bill moving through the NC General Assembly is Senate Bill 553/House Bill 551 “Landlord/Tenant and HOA Changes.”

SB 552 and HB 551 are mainly focused on landlord-tenant issues, but both include a provision that any declaration amendments made by an HOA or condo association would “only affect lot owners whose lots are conveyed or transferred after the amendment takes effect.” Such an outcome impacting ALL declaration amendments would have disastrous consequences on many associations.

As a reminder, amendments to declarations can only be adopted if overwhelming supported by the members. State law provides that a declaration can only be amended by the “affirmative vote or written agreement signed by lot [or “unit”] owners of lots to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies.”

Like all legislation, the bill may yet be amended to limit its scope. However, the bill with its present wording making all declaration amendments prospective would have significant negative repercussions:

• Associations would no longer have common schemes of development, which is a major reason buyers purchase in homeowner and condominium associations. “That lot can have automotive repairs in the yard, but that lot can’t” is a bad outcome. Whether a particular lot is subject to a specific declaration amendment would depend on when the lot was purchased in relation to when the amendment was adopted. For an association to figure that out would require significant research and tracking. Adopted rental restrictions would only apply to owners purchasing after the declaration amendment was adopted, even if a specific owner voted IN FAVOR of the amendment to restrict short term rentals.

• Declaration amendments cover far more than just rental amendments. Associations trying to fix insurance or maintenance issues in an older declaration could not easily do so. We have assisted many older condos or townhomes where the association’s insurance has simply become unaffordable. Members addressed the issue by amending their declaration as to reallocate what the association insures and what the owners insure. How could that possibly work if some owners are impacted by the change to insurance and others not?

• Condominiums are not able to obtain FHA/Fannie Mae/Freddie Mac financing unless they have certain rental restrictions in place. As a result, we are often asked by older condominiums to amend the declaration to align with federal regulations. Saying that current owners are not impacted by a declaration amendment would mean the condominium is out of compliance with federal regulations. This bill as applied to condominiums will make financing for purchases of condos difficult to impossible for some condominiums.

• Some association declarations provide a flat assessment amount to be paid by owners. The bill would mean that changes to dues would only apply to future owners. Different owners being obligated to different assessments depending on when they purchased their property is completely impractical from an association finance perspective.

SB 552 and HB 551 need more consideration and editing before moving forward. Otherwise, they will significantly and negatively impact North Carolina’s almost 15,000 associations and the 2.8 million owners living in them.

The bill and its current status can be found at https://www.ncleg.gov/BillLookUp/2023/H551.