Homeowners Association Law Frequently Asked Questions

Fostering great communities across North Carolina

From offices in Raleigh, Hatch, Little & Bunn, LLP proudly protects homeowners associations (HOA) and the individuals who govern and manage them. In the North Carolina Triangle Region (including Wake, Durham, Orange, Alamance and Franklin counties), and across North Carolina, we help new developments become great communities.

Whether you are a member of a board of directors of an HOA, or are responsible for its management, our attorneys can help ensure your community is efficient and well managed.

What is an HOA?

A Homeowner's Association is comprised of two or more homeowners that belong to a mandatory membership organization for the maintenance of commonly owned real estate and improvements and regulations of privately owned property in a given area. New community developments are often required to form a nonprofit corporation charged with maintaining common areas within the development. These are commonly called homeowners or community associations. HOAs typically are responsible for managing community finances and their board’s direction, and enforcing the guidelines in their covenants, conditions and restrictions (CC&R). Collecting unpaid assessments, enforcing the association's governing documents, handling disputes and dealing with contractors are just a few of the issues HOAs face daily.

What are association bylaws?

The bylaws are the guidelines for the operation of the Homeowner's Association. The bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership's voting rights, required meetings and notices of meetings, and the principal office of the association, as well as other specific items that are necessary to run the homeowner's association as a business. The bylaws for the association may be viewed online within the Documents page of this site.

Can a Homeowner's Association require assessment fees?

Homeowner's Associations can assess mandatory fees for common property maintenance.

Can the Homeowner's Association get a lien on a homeowner's property for failure to pay their homeowners assessment?

Under NC law, a homeowner's association can place a lien upon an owner's property for failure to pay assessments, and may foreclose upon that lien if the owner still refuses to pay past homeowners assessments. A lien may also be placed on the property for failure to pay fines properly imposed upon the owner; however the foreclosure process for foreclosing upon a lien for fines is more complicated and cumbersome.

What are Covenants, Conditions & Restrictions?

Commonly called CC&R's the term usually refers to a written recorded declaration which sets forth certain covenants, conditions, restrictions, rules or regulations established by a Homeowner's Association to create uniformity of buildings and use within tracts of land or groups of lots.

What can a Homeowner's Association regulate?

Homeowner's Association rules and regulations can regulate many different things in the homeowner's area such as:

  • Basketball hoops
  • House design sheds
  • Clotheslines, lawns, shingles
  • Exterior paint, mailboxes, swing sets, fences
  • Garages, outdoor lights, TV antennas
  • Garbage cans, views, window coverings

Why retain legal counsel?

Serving on your HOA board of directors, no matter how committed and accomplished you may be, can be time consuming, complicated and exasperating — because you are dealing with peoples’ homes, and the devil is always in the details of the rules. Legal assistance can save your HOA money and many communal (and personal) headaches by improving efficiency and addressing situations before they escalate into expensive problems.

As your legal counsel, Hatch, Little & Bunn, LLP attorneys can help you to better understand the HOA laws, assist in resolving disputes and provide other services including:

  • Development and enforcement of articles of incorporation, bylaws, CC&Rs and other governing documents
  • Counseling on interpretation of governing documents
  • Notification of CC&R violations and application of penalties
  • Collecting delinquent assessments
  • Processing approval of individual home exterior modifications to ensure cohesiveness of community appearance
  • Construction defect litigation

In fact, our collections efforts for recovery of past due assessments from delinquent owners has yielded outstanding results.

Homeowner's Association Articles

Trickle-down tactic: No dues? No water>

http://www.charlotteobserver.com/?template=contentModules/printstory.jsp

Neighbors' covenants could lose some clout

http://www.newsobserver.com/644/story/270622.html

Collecting Delinquent Assessments

Collection of Homeowner's Assessments

In today's economy, Homeowner's Associations are having an increasingly difficult time collecting association dues from its owners. There are many legal avenues and alternatives for associations to use in order to collect past due assessments. In recent years, our firm has developed an extensive practice in homeowner's assessments collections. Following are some of our most frequently-asked questions regarding recovery of past due assessment fees.

How does our association protect its legal right to recover past due assessments from our member owners?

In most cases, unpaid assessments constitute a lien on the homeowner's property. You must review your community's covenants in order to determine your lien rights in this regard. However, you must take certain legal steps to protect your lien and to notify both the owner and any potential buyers of your right to collect upon the lien. Our firm can handle the legal proceedings for you using the following collection process.

How can your firm assist us in the collection of past due assessments?

Once we receive a request for collection, we will open a file and send a Demand Letter to the delinquent owner, which includes the proper debt collection language. If no payment is made in response to the demand letter, inform us of the same and we will file a Claim of Lien against the property. Again, if no response is received, we will either file a Small Claims action or a foreclosure proceeding, based upon your wishes. We will collect the past due assessments, interest, and actual attorney's fees and costs from the debtors based upon the stage of the collection efforts and forward the same to you on a monthly basis.

What are your fees for collection of past due assessments?

We charge for our services on a flat fee basis. That way, there are no "surprise fees" and no unexpected legal expenses. Our fee structure is as follows:

  • Demand Letter - $75.00
  • Claim of Lien - $150.00 (includes filing fee)
  • Small Claims Complaint - $150.00 (+filing & service fee)
    • *Court appearance - $75.00
    • *If goes to trial, then converts hourly fee - $225.00)
  • Filing Foreclosure action - $400.00 (+filing and service fee)
  • Foreclosure Hearing & Sale - $225.00/hour

What if the homeowner declares bankruptcy?

If an owner declares bankruptcy, such matters are generally handled by our bankruptcy attorney, Mr. Douglas Q. Wickham. He charges for bankruptcy matters at an hourly rate of $200.00/hour.

How can we begin to recover our delinquent homeowners dues with your assistance?

You can either e-mail me at tfpace@hatchlittlebunn.com or you may call me at (919) 856-3940. I will be happy to discuss the collection of your past due accounts either in my office or at your next Board meeting.

Case Law and Statutes

North Carolina Legislative Law

Chapter 47F, North Carolina General Statutes

North Carolina Planned Community Act

http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_47F.html

Chapter 47C, North Carolina General Statutes

North Carolina Condominium Act

http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_47C.html

North Carolina Case Law

Homeowner's Association - Debt Collection

Fairview Forest Homeowner's Association, Inc v. Gerald Dean

149 N.C. App. 972, 563 S.E.2d 99 (2002) (Table - Unpublished Opition)

Reid v. Ayers

138 N.C. App. 261, 531 S.E.2d 231 (2000)

Davis Lake Community Association, Inc v. Feldmann

138 N.C. App. 292, 530 S.E.2d 865 (2000)

Serving North Carolina clients for more than 50 years

Hatch, Little & Bunn, LLP has provided comprehensive legal services to individuals and businesses in Raleigh, Durham, Chapel Hill, Research Triangle Park, Wake County and throughout North Carolina from offices by the state capitol for over half a century. Our attorneys are licensed to practice before all North Carolina state and federal courts. Call (919) 899-9827 today, or contact us online to schedule a consultation with one of our attorneys about your concerns.

Hatch, Little & Bunn, LLP
327 Hillsborough St
Raleigh, NC, 27603 USA
919-856-3940