North Carolina legislators look at HOA laws

Angie's List member Julie Tuggle's HOA threatened to fine her up to $100 a day because her mailbox post skewed to the side. (Photo courtesy of Julie Tuggle)

Angie's List member Julie Tuggle's HOA threatened to fine her up to $100 a day because her mailbox post skewed to the side. (Photo courtesy of Julie Tuggle)

Since 1999, homes built in planned communities of more than 20 houses must have a homeowners association to maintain common property under North Carolina law. As a result, HOAs govern most new homes in subdivisions within the state. The same laws also give those associations, or management companies they hire, rights to protect property values by fining homeowners who don’t follow covenant and deed restrictions up to $100 a day. If fines go unpaid, the association can place liens, sue or even force foreclosure to collect the money.

Responding to public outcry, the N.C. legislature in 2011 voted to require sellers to disclose additional information about the HOA prior to a home sale. As of January, sellers must share information about association fees, services, board leadership and management when buyers make a purchase offer, long before settlement.

Julie Tuggle, owner of highly rated Carolina Buyer’s Agent in Charlotte, supports the change, but thinks it may not go far enough. Many of her clients avoid homes with HOAs, due to concerns about dues and restrictions. “You don’t know if it’s a good or bad association,” Tuggle says, noting some boards quibble over trivial items. She personally wrote to the legislature this year about the issue after receiving a letter threatening fines if she failed to correct a slight tilt of the mailbox in front of a home she owns. “Theoretically — and legally — they could foreclose because the mailbox wasn’t straight,” she says.

After hearing comments earlier this year, a legislative study committee on homeowners associations concluded: “The current laws governing community associations ... do not offer sufficient protection for the rights of owners of property.” In its final report, the committee proposed several changes to the law, including allowing in-person or absentee voting and limiting proxy voting during board meetings, and requiring licenses and training for association managers. Legislators debated several bills this session aimed at those changes; none had been ratified as of press time.

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