North Carolina HOA Dispute Resolution: Mediation Under G.S. 7A-38.3F

Updated for 2026

This page is part of AMG’s Guide to North Carolina HOA laws. It describes how disputes between a North Carolina community association and its owners are commonly resolved, including the hearing that precedes a fine or suspension, voluntary mediation under North Carolina’s HOA mediation statute, arbitration, and litigation.

In this guide, the term governing documents refers collectively to the association’s plat, articles of incorporation, bylaws, declaration, rules and regulations, and all policies adopted by the board or the membership.

Common HOA disputes in North Carolina

In AMG’s experience, most community association disputes in North Carolina involve architectural decisions, rule enforcement that an owner considers mistaken or selective, disputed assessments or charges, disagreement over who is responsible for a repair, access to association records, or concerns about how the board held meetings or made decisions.

The dispute resolution framework

North Carolina law provides a hearing before a fine or suspension, a voluntary mediation process, enforcement of agreements to arbitrate, and rules on attorneys’ fees in litigation. The Planned Community Act and the Condominium Act are referred to on this page as “the Acts,” and the governing documents may add procedures of their own.

For many disputes, the first formal step is the hearing that generally precedes a fine or suspension, for which the owner receives notice of the charge, an opportunity to be heard and to present evidence, and notice of the decision. AMG’s guide to unenforceable HOA rules in North Carolina covers fines, suspensions, and the hearing in more detail.

Dispute resolution at a glance

The Condominium Act’s fine-hearing section has the same section number in Chapter 47C. The hearing and attorneys’ fees rules on this page generally also apply to older communities, and North Carolina’s HOA mediation statute applies regardless of when the community was created.

Mediation

A mediator is a neutral person who helps the parties reach their own agreement and does not decide the dispute. North Carolina’s HOA mediation statute encourages, but does not require, an association and an owner to mediate a dispute arising under the Acts or the association’s declaration, bylaws, or rules before filing a lawsuit. Disputes solely about unpaid assessments, or the fines and fees tied to collecting them, are not covered and typically follow the collection process described in AMG’s guide to North Carolina HOA lien and foreclosure laws.

Either side may request mediation and either may decline. Unless the parties agree otherwise, they share the costs of mediation equally, and each pays its own attorney. With limited exceptions, statements and conduct in the mediation cannot be used in a later lawsuit over the same dispute.

Information about CAI-NC mediation is available at www.cai-nc.org/mediation.

Arbitration

An arbitrator, unlike a mediator, decides the dispute, and the decision can bind both parties. North Carolina law generally enforces a written agreement to arbitrate, such as an arbitration provision in the declaration or bylaws, and a court decides whether such an agreement exists and whether it covers a particular dispute.

Litigation and attorney involvement

Litigation is generally the last resort, since it is slow, public, and expensive, and it can strain relationships among neighbors. Once a lawsuit is pending in superior court, the court may order a mediated settlement conference unless both parties already mediated under the HOA mediation statute and the mediator’s certificate has been filed.

The association’s attorney represents the association itself rather than any individual owner or director. Whether the prevailing side can recover attorneys’ fees depends on the type of community and, for a planned community, on whether the declaration allows it.

Preventing disputes

Associations that enforce rules the same way for every owner, explain decisions by reference to the governing documents, and give owners a genuine opportunity to be heard generally encounter fewer formal disputes.

How AMG supports the board

AMG can receive owner concerns and requests and forward them to the board, which decides how to respond. At the board’s direction, AMG can prepare and send hearing notices and related correspondence, help organize a hearing before the board or an adjudicatory panel, and attend as scheduled by the board. The association is the party to any dispute with a member, and decisions on violations, fines, mediation, arbitration, and litigation remain with the board.

When to involve legal counsel

Matters that commonly warrant the involvement of the association’s attorney include, but are not limited to, a dispute in which an owner has retained counsel or threatened legal action, a request to mediate or a proposed mediated agreement, an arbitration provision in the declaration or bylaws, a request to resolve a dispute through arbitration, a contested fine or suspension, and any decision to bring or defend a lawsuit. Whether and when to involve counsel is the board’s decision. At the board’s direction, AMG can help coordinate communications with the association’s attorney and assist in gathering the information counsel requests.

Frequently Asked Questions

Is mediation required before an owner or an association files a lawsuit in North Carolina?

No. North Carolina’s HOA mediation statute encourages mediation before a lawsuit is filed but allows either party to decline. Once a case is pending, a court may order a mediated settlement conference unless both parties already mediated under the statute and the mediator’s certificate has been filed.

Which HOA disputes does North Carolina’s mediation statute cover?

The statute covers disagreements between an association and an owner that arise under the Planned Community Act, the Condominium Act, or the association’s declaration, bylaws, or rules. A dispute that concerns only unpaid assessments, or the fines and fees tied to collecting them, falls outside it and follows the collection process instead.

Who pays for HOA mediation in North Carolina?

Unless the parties agree otherwise, each side pays half of the mediation costs, including the mediator’s fees, and each side pays its own attorney. No costs are assessed if either party declines before the first mediation meeting.

Related Resources

• Guide to North Carolina HOA laws
• NC Planned Community Act
• North Carolina HOA meeting rules
• North Carolina HOA voting and election rules
• North Carolina HOA lien and foreclosure laws

Have questions about your own community?

Boards of AMG-managed communities are encouraged to begin with their community manager, who can help the board locate the relevant governing documents and other available information and, at the board’s direction, liaise with the association’s attorney when a legal question arises. Associations that are not currently AMG clients may contact AMG’s client services team for information about AMG’s management services or for referrals to qualified professionals.

AMG provides administrative management services to associations and is not a law firm. AMG acts on behalf of the associations it manages rather than individual owners, and an owner involved in a dispute with an association may wish to consult independent counsel.

About AMG

This guide was prepared by Association Management Group (AMG) community managers, including managers who hold the PCAM®, AMS®, and CMCA® credentials. AMG is an AAMC®-accredited firm serving more than 30,000 property owners across the Carolinas. The information is intended to assist community association members and leaders in understanding the statutory framework in which their associations operate.

Learn more at www.amgworld.com. Additional governance discussion appears in the Lessons from the Neighborhood series at www.LessonsFromTheNeighborhood.com.