Mediation and Arbitration Study for HOAs and Condos

Senate Bill 16 was vetoed by Governor Cooper on August 15, 2017, for reasons other than the proposal described below. The proposed study of a mediation and arbitration board by the Legislative Research Commission below is on hold until the legislature votes on whether or not to override the veto. The General Assembly met yesterday (August 3) to consider several issues remaining from the legislative session. Bills that would impact North Carolina’s homeowner and condominium associations weren’t really on the agenda, but one proposal was adopted that has a provision concerning community associations. Senate Bill 16: Business & Agency Reg. … Continue reading

Can My South Carolina HOA or Condominium Charge a Transfer Fee?

I often receive questions from managers and board members about fees that homeowners associations and condos can and can’t charge to homeowners and to prospective purchasers in their communities.  One of the most common questions goes something like this: “Our covenants say that we can charge a capital contribution fee / transfer fee / some other similar fee at each closing.  Can we charge this fee?” The answer will depend on several factors, including the age of the fee covenant, which party is entitled to receive the fee, and whether the original developer is still selling property in a community. … Continue reading

NC Community Association Legislative Wrap-Up – July 2017

The General Assembly adjourned its 2018 regular session this month, so questions have arisen about what happens to proposals that would have directly impacted North Carolina’s homeowner and condominium associations (see NC Community Association Legislative Update-June 22, 2017), but weren’t adopted. The clear answer: “It depends.” Although legislators left town, they haven’t really left for good. The adjournment resolution provided that special legislative sessions will be held in August, September, and again by November. While these sessions are intended to be focused on legislative redistricting and other major issues, the General Assembly can consider what it wishes. While it is unlikely … Continue reading

NC Community Association Legislative Update – June 22, 2017

I’m asked frequently about the status of  proposals filed this session in the General Assembly that, if adopted, would directly impact North Carolina HOAs and condominium associations. The “crossover deadline” (the date on which a bill must have cleared one chamber to move forward) has passed, which means this a good time to check in on various bills. (FYI, while the crossover deadline is a big deal, keep in mind the News & Observer’s warning several years ago: “[Legislative] rules are made to be circumvented, so there are many ways to keep legislation alive.”) UNDERSTAND THAT ALL OF THESE ARE PROPOSALS, … Continue reading

Communities for Those 55 Years of Age or Older

Recently we have been approached by multiple associations inquiring about making their housing community one that is restricted to those residents that are 55 years of age or older.   The ability and requirements for establishing or becoming a housing community for those 55 years of age or older is governed by the federal Housing for Older Persons Act (HOPA).  The Act applies to homeowners associations and condominium associations that wish to impose this type of age requirement.  HOPA is an exemption to the Fair Housing Act (FHA) which prohibits discrimination in housing-related transactions based on race, color, religion, sex, national … Continue reading

Challenging the Chairman of a Meeting

Have you ever been at a meeting that you did not believe was being run properly?  Is the chair ruling every motion out of order?  Were you unsure on what you could do or did you feel like there was nothing you could do?  Fortunately, there are actions that you can take in these situations.  If your group utilizes Robert’s Rules of Order Newly Revised, then there are several procedures that allow you to challenge the chair if you believe the meeting is not being run properly. One procedure some people might not be aware of to challenge the ruling … Continue reading

Do You Know Who Your Registered Agent Is?

North Carolina corporations, whether for-profit or nonprofit, must have a registered agent name filed with the NC Secretary of State. Planned communities (i.e., homeowner associations) created on or after January 1, 1999 by statute must be incorporated. And almost all homeowner and condominium associations in North Carolina ARE incorporated, regardless of when they were created. So an important question is, “Do you know who your registered agent is?” Finding Your Registered Agent The process of determining your current registered agent is fairly straightforward. Just visit the Secretary of State’s corporate search page and search for your corporate name (be careful, as different corporations often … Continue reading

NC Community Association Legislative Update – Community Association Property Management Act

While most NC General Assembly bill filing deadlines have passed, legislation considered appropriations or finance can be filed through next week. A bill introduced yesterday would, if adopted, significantly impact North Carolina’s HOA/condo associations as well as community managers. House Bill 865: Community Association Property Management Act was filed April 20, 2017 by Rep. Jonathan Jordan (Ashe, Watauga), Rep. John Blust (Guilford), and Rep. Rodney Moore (Mecklenburg) and provides that: beginning October 1, 2017, all community association managers must have an NC real estate broker license association community managers would not be permitted to exercise control over (a) the reserves or investment … Continue reading

NC Community Association Legislative Update – April 19, 2017

Several important legislative deadlines have passed in recent weeks. Tuesday, April 4 marked the NC Senate deadline for filing public bills and resolutions. Tuesday, April 11 marked the NC House deadline for filing public bills and resolutions (other than appropriations or finance bills). While there are a still a few ways for bills impacting HOAs or condos to be introduced in the General Assembly this session, now is an appropriate point to look at the filed bills that, if adopted, would directly impact North Carolina’s community associations. (1) Senate Bill 491/House Bill 625: HOA/Condo Crime & Fidelity Insurance Policies. Senate Bill 491: … Continue reading

NC Community Association Legislative Update – Fidelity Coverage & Audits

While there are still several weeks for legislative proposals to be introduced in the General Assembly, one bill introduced yesterday (March 29) would directly impact North Carolina condominium and homeowner associations: Senate Bill 491: HOA/Condo Crime & Fidelity Insurance Policies filed by Sen. Norman Sanderson (Carteret, Craven, Pamlico). The bill’s purposes are to (1) require more financial transparency in community associations, and (2) help ensure associations recover monies in the event of financial wrongdoing by an association leader or community manager. In short, SB 491 takes a different approach than some prior proposals on how to address concerns about financial … Continue reading

HOAs/Condominiums Want to Know: What is a Transfer Fee in North Carolina?

A common question that we get from developers, managers, and HOA Boards is “what exactly is a transfer fee?” Although the term “transfer fee” is often used loosely to mean several different things, state statute defines the term generally to mean “a fee or charge payable upon the transfer of an interest in real property.” In other words, it is a fee charged when property is transferred from one party to another.  North Carolina law now prohibits transfer fee covenants.  Specifically prohibited are covenants that require the payment of a transfer fee to a developer or other person upon a … Continue reading

Lesson Learned: What North Carolina Management Companies Should be Thinking About

In a recent post on a South Carolina Supreme Court case from just a few weeks ago I provided a quick breakdown of things that management companies in South Carolina must not do. As always, lessons learned from different jurisdictions can be instructive to neighboring jurisdictions.  North Carolina and South Carolina share many things, including a border.  They also share a similar approach to making sure that the practice of law in each state is limited to only licensed attorneys. Here are some specific things that the Supreme Court in South Carolina mentioned that constitute the unauthorized practice of law … Continue reading

HOA / Condo Budgets and Increased NC Sales Taxes

Benjamin Franklin said that “in this world nothing can be said to be certain, except death and taxes.” As community association attorneys, we’re not CPAs. And every association has different circumstances. Having said that, it is almost certain that due to a shift in how North Carolina taxes certain services, association budgets will need to be increased. North Carolina has traditionally relied heavily upon income taxes as a revenue stream. Without getting into any pro or con political discussions, the NC General Assembly over the past several years has begun shifting to a model of lower personal and corporate income … Continue reading

Things Community Management Companies Should Not Do in South Carolina

We often are asked by managers and Board members what duties are appropriate to delegate to a property manager. First, a property manager is almost always going to be considered an agent of the homeowners association. As an agent, what authority does the property manager have?  In general, an association manager has whatever power is granted by the Board of Directors for the HOA.  It is common for management companies to manage the day-to-day running of the association, leaving the decision-making for the Board.  Some common duties include collection of assessments, helping to enforce restrictions, helping with the annual budget, … Continue reading

Short-Term Rentals in North Carolina and South Carolina HOAs and Condominiums

We live in an increasingly sharing world and culture. For a small fee we share rides to get to work, can leave our pets at someone’s house while on vacation, or we can rent our neighbor’s car, high-end household items like cameras or kitchenware, and even musical instruments (although I’m not sure I would want to share some of those).  With the explosion in our sharing economy, it should come as no surprise that owners in homeowners associations and condominiums have found ways to take advantage of technology to market their homes to those in need of lodging on a … Continue reading

2017 National Community Association Law Seminar

The national Community Association Law Seminar is by far the best HOA or condo legal program I attend each year. The year’s Law Seminar, sponsored by the Community Associations Institute (CAI) and the College of Community Association Lawyers (CCAL), is the 38th annual and will be held January 18-21 in Las Vegas, NV. While the Law Seminar provides about 13-20 hours of CLE and is mostly attended by attorneys, it’s not only for attorneys. Attendees include community association managers, bankers, other industry professionals and even homeowners who want to learn about HOA/condo law changes and trends. For insurance professionals who work … Continue reading

NC-CAI Chapter 2016 Year-End Update

New Year’s Day begins a new CAI-NC Chapter year. As this is my last Chapter update, I’d like to look back at some of our Chapter’s 2016 accomplishments and look forward to upcoming changes in 2017. The Chapter has accomplished much this year, including: a redesigned annual sponsor program with new benefits and greater value one of our largest and most successful Annual Conferences ever two Chapter Achievement and Excellence Awards from national CAI (a record!) a successful 7th Annual Community Law Day for homeowners and community managers a CAI-NC Golf Tournament to help fund the work of the Legislative … Continue reading

NC Community Association Legislative Update – December 15, 2016

Well, this is a first—I’ve never done a community association legislative update just before Christmas. After all, the General Assembly doesn’t meet in December. But what’s been normal about politics in 2016? Earlier this week the General Assembly convened for a special legislative session to deal with issues related to hurricane disaster relief. At the end of that session, legislators issued a proclamation convening a new special session to deal with other unnamed issues. A number of bills have been filed, ith many dealing with restructuring aspects of state government following the recent elections. However, at least one proposal has … Continue reading

Ham it Up – HAM Radio in Your Community Association

A recent topic that we have been following is the congressional bill to permit HAM radio towers in community associations. We learned today that H.R. 1301 regarding HAM radio operation in planned communities failed to pass the Senate. The Community Associations Institute (CAI) opposed the original version of H.R. 1301, which would have required homeowners associations to allow installation of HAM radio antennas regardless of any prior restrictions or architectural requirements. With CAI’s support, H.R. 1301 was amended to require that antennas be approved prior to installation. The new Congress will be sworn in on January 3, 2017 and it … Continue reading