Homeowners’ Associations in NC are required to be incorporated. Most community associations decide to file as nonprofit and are therefore subject to the North Carolina Nonprofit Corporation Act. Homeowners’ associations must also follow the Planned Community Act which provides more specific regulations regarding HOA management.

The Planned Community Act applies to all HOAs created after January 1st, 1999. Communities created before the date and containing fewer than 20 units are exempt unless homeowners agree to follow the regulations with a 67% vote.

 

Homeowners Association’s Rights and Responsibilities

HOAs in North Carolina are responsible for the maintenance and care of all common elements within the community. Regular assessments may be charged to homeowners to create a budget for maintenance expenses. For limited common elements, areas that are not accessible to all homeowners, assessments may only be charged to the homeowners that have access to the common element.

 

Aesthetic Properties Of Units

The homeowners’ association may also impose regulations on the use and aesthetic properties of units. Associations may impose fines for violations of the HOA regulations. Before any fines are charged, the homeowner must be given a hearing before the board of directors or a hearing committee chosen by the board. After the hearing, the committee then has the power to enforce or forgive any fines. Fines may not exceed $100 without a second hearing.

 

Delinquency

If an account becomes delinquent, the HOA has the right to impose late fees and/or liens on the property. In extreme cases, they may even foreclose on the property despite on-time mortgage payments.

It is the responsibility of the association board of directors to maintain at least detailed financial records, minutes of all meetings, and a list of current members. Community documents must be made available to association members upon request.

Property and liability insurance is mandatory and must be maintained by the community association. Property insurance must cover at least 80% of the replacement cost of all common elements.

 

Homeowner Rights

Homeowners’ power comes from their right to vote at member meetings. The board of directors cannot make any amendments to the declaration or bylaws without consent, homeowners reserve the power to elect and/or remove executive board members, and any budgetary changes must be approved by unit owners at budget meetings.

Member meetings must be held at least annually, if not more frequently as described by community bylaws. Special meetings may be called by the association president, a majority of the board of directors, or 10% of the allocated homeowner votes.

Any association member may attend the board of directors’ meetings and reserves the right to speak. The board may impose reasonable restrictions on the time allotted for members to speak but may not prohibit it entirely.

Unit owners also have the right to inspect all community documents, including financial documents, upon written request to the board of directors. An HOA may be terminated with agreement from 80% of the voting power.

 

North Carolina Planned Community Act

To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at help@csmhoa.com.