South Carolina Legislative Update: Bill Affecting HOAs and Condos Signed Into Law

A South Carolina bill we have been watching for more than a year was signed into law by the governor yesterday, May 17, 2018.  House Bill 3886 is the first bill specifically directed at homeowners associations and condominiums in South Carolina and will impact how each of these types of communities operates.  Officially titled the “South Carolina Homeowners Association Act,” click here for the text of the law.   Here is a brief summary of some of the key parts of the new law: Disclosure Duty The law creates a new duty to disclose whether real property being sold is … Continue reading

New Appellate Case: “Must Our Condo Association Buy Flood Insurance?”

What insurance must be purchased by an association can usually be determined by reading the governing documents and relevant NC statutes (and consulting an experienced community association insurance professional!).  The NC Condominium Act details what insurance must be purchased by a condominium association created on or after October 1, 1986 (other statutes provide for insurance requirements on older condos or planned communities). NCGS § 47C-3-113 states, among other things: Commencing not later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent available: (1) Property insurance … Continue reading

Proxies & Proxy Voting at Membership or Board Meetings

Proxies and Proxy Voting at Membership Meetings Our attorneys get lots of questions about proxies and proxy voting. And that’s understandable, as proxy issues at meetings can get very confusing. A proxy is similar to a power of attorney as could be used to open a bank account or sell a car for another person. If proxies are permitted at a meeting, the proxy can likely be given to any person or entity. That’s because the person carrying the proxy isn’t really who is at the meeting–the proxy giver is. FYI, most parliamentary books like Robert’s Rules of Order Newly Revised … Continue reading

Dispute Resolution Committee Comments

Last week I was invited to address the Legislative Research Commission’s Committee on Dispute Resolution Options for Homeowners, Associations and Governing Entities. The committee’s charge is to explore the “creation of a mediation or arbitration board” to handle community association disputes, and I was asked to share my thoughts. My comments to the Committee are below. FYI, almost all lawsuits filed in North Carolina’s District or Superior Courts are sent to either mediation or arbitration. And state law currently requires that community associations notify members each year of their right to request mediation. While I am an active proponent of … Continue reading

Can we just enforce the rules we like?

Most board members don’t relish the idea of fining their friends and neighbors for minor infractions of their community’s restrictive covenants. Boards are typically willing to issue fines and citations when an owner has piles of garbage in their front yard, windows and siding falling off the exterior, or nipping dogs running around common areas off leash. But what about the situation with the owner who occasionally has to bring a company work van home overnight and park it in the driveway- and the Declaration of Covenants says no commercial vehicles parked in driveways? Or the environmentally friendly owner who … Continue reading

Transgender Issues in Community Associations

Recently, I had the opportunity to attend the annual Community Association Institute Law Seminar. One of the topics covered at the seminar was transgender issues in community associations.  We all know that community associations are microcosms of the society at large, and transgender issues are no exception. Transgender persons face violence, discrimination in the workplace, educational challenges, and health concerns.  Relevant to community associations, they also face significant hurdles related to housing.  A report of the 2015 U.S. Transgender Survey (USTS), looking at almost 28,000 transgender persons in all fifty states, the District of Columbia, American Samoa, Guam, Puerto Rico … Continue reading

New Charlotte Address & Firm News

We’re excited to announce our new, larger Charlotte office! Note our new Charlotte address: 1927 South Tryon St., Suite 100, Charlotte, NC 28203. The Charlotte phone number at 704-970-1593 remains the same.     This has been a busy and exciting year for our firm, so here are some updates and recent recognitions: Our Greensboro office expanded to take over neighboring office space (but has kept the same address). Four attorneys joined our firm this past year to assist with HOA/condo and real estate matters: Harmony Taylor, Brad Jones, Chris Rivers and Jason Pruett. For more information on any of … Continue reading

Fining For Violations-Proper Process is Key

Our clients often ask us what can be done about homeowners who are clearly violating the Association’s governing documents.  Both the North Carolina Planned Community and Condominium Acts (“Acts”) have mirror provisions and procedures for the imposition of fines.  Imposing fines often causes a great amount of heartburn for Boards as they are tasked with enforcing the Association’s governing documents against a neighbor.  While it can be an uncomfortable position to be in, our advice is that if the Board is not willing to enforce their governing documents, the documents might as well not exist. Furthermore, if Associations ignore violations … Continue reading

2018 Law Seminar Follow-Up & Firm News

Each year several of our HOA/condo attorneys attend the annual community association Law Seminar presented by the College of Community Association Lawyers and the Community Associations Institute. The Law Seminar has excellent HOA/condo speakers and programs, and this year was no exception. There were some 20 education sessions, including discussions of Fair Housing Act developments, the explosion of assistance animal issues in community associations, protecting association names and websites, dealing with hoarders, and the fiduciary obligations of board members. A goal for attorneys who attend the Law Seminar is to come back with a better feel for trends that will … Continue reading

South Carolina Court of Appeals Reiterates Importance of Clear Rental Restrictions

I am often asked by homeowners, property managers, and HOA boards to review restrictive covenants to determine whether their community may restrict leasing in some way.  The usual answer is “it depends,” and the South Carolina Court of Appeals made it clear in Community Services Associates, Inc. v. Wall that restrictive covenants must be clear in order to prevent leasing. Covenants that restrict the free use of property are disfavored by the law.  Therefore, courts in North Carolina and South Carolina require that any restrictive covenant in a homeowners association or condominium be clear and unambiguous.  So long as they … Continue reading

We Buy Unwanted Houses…Or Do They?

The Charlotte area real estate market remains hot and with that comes opportunists looking to make a dollar in real estate.  I receive solicitations from investors who claim to want to buy my house weekly (sometimes, three or more per day in my mailbox).  Telephone posts across the city are adorned with advertisements proclaiming to “Buy Unwanted Houses” or “Pay Cash for Your House”.  No doubt, it is tempting to want to cash in on the appreciating value of homes in the area.  However, homeowners should be cautious if they are approached by persons or companies who “pay cash for … Continue reading

What to Do About Subdivision Roads—The Orphan Road Conundrum

For many homeowners associations roads can be a source of constant consternation. Most homeowners do not make their home-buying decision based on the condition of the roads in the community or on the responsibility of the community to maintain subdivision roads. Where the community is responsible for the roads, it can be one of the largest budget expenses, often taking years of planning and saving to tackle. Even then, it may require special assessments or other methods to raise the funds to handle. When developers or HOA boards are not diligent in getting responsibility for roads turned over to the … Continue reading

New Mediation Program to Help Resolve North Carolina HOA/Condo Disputes

The North Carolina Chapter of the Community Associations Institute (NC-CAI) has a new Community Association Mediation Program for resolving association disputes! Let me tell you about it. A common complaint heard in the community association world is that there should be some place that homeowners or HOAs and condos can go to resolve disputes. However, the governmental costs to create and administer such a program for North Carolina’s almost 15,000 associations would be enormous. (And for that matter, should state government be in the business of regulating disputes over private real estate contracts?) While huge fights may end up with … Continue reading

“Protecting Associations from Liability for Sexual Harassment”

You can’t turn on the news these days, pick up a paper or listen to the radio without hearing about someone else in the entertainment industry being accused of improper sexual behavior towards employees, coworkers or others. Community Associations are microcosms of our culture, and so it should come as no surprise to find that allegations of harassment can and do come up. Recently I received a phone call from a manager dealing with the following scenario: Board President has served for many years, with wide support from the membership. He keeps the budget in check, makes sure the pool … Continue reading

Budget Ratification Meetings Basics – What You Need to Know

The Planned Community Act and the Condominium Act require most homeowners associations and condominium associations to hold budget ratifications meetings.  What are these meetings? A budget ratification meeting is a meeting of the owners of the association to review the proposed budget that has been adopted by the executive board.  The budget ratification meeting has a number of different requirements and provisions that are unlike other meetings of a community association.  Notably, a budget ratification meeting does not have a quorum requirement, which is dramatically different from typical annual or special meetings. In addition, the budget ratification meeting has special … Continue reading

“My Uncle Does That” . . . When is it OK for Condominiums and Homeowners Associations Not to Use a Pro?

I am often asked by HOA & condo Boards a question that looks something like these: Is it OK for the Association to use community volunteers instead of a professional? or My Uncle Sal does that, can’t we use him? / I’m sure he’ll give us a discount! Naturally, in typical lawyer fashion, I tell them that it depends.  There are scenarios where the Board will always want a professional service provider and others where it is perfectly acceptable for volunteers from the community to provide services. The bottom line for the Board is always whether it has met its … Continue reading

Buyer Beware: Foreclosures of Properties with Existing Tenants

The housing market is hot in much of North Carolina, and many local and out of State investors are on the lookout for foreclosure deals that they can turn into quick rental income. In this situation some investors may be inclined to forego traditional due diligence, but they do so at their peril. No investor wants to purchase a property, only to learn after the fact that there is an in-place tenant (often less than desirable) who has no intention of leaving the property or paying reasonable rent. In this situation, the tenant may have more rights than the property … Continue reading

HOA & Condo National Law Seminar and Other Programs

Several HOA/condo association learning opportunities are coming up that you may wish to attend, both in North Carolina as well as nationally. Details for each program can be found below. 2018 National Community Association Law Seminar The national Community Association Law Seminar is the premiere HOA and condo legal program held each year. The year’s Law Seminar, sponsored by the Community Associations Institute (CAI) and the College of Community Association Lawyers (CCAL), is the 39th annual and will be held January 31-February 3 in Palm Springs, CA. The Law Seminar is mostly attended by attorneys, but it’s not just for … Continue reading

Enforcement: Might a Local Ordinance Help Your Community Association?

What can an HOA or condominium association do when activity is occurring within the community that appears to be objectionable, but which is not specifically addressed in the Declaration of Covenants, Conditions, and Restrictions or other association governing documents? The clear answer, if the association wants enforcement power, is to amend the governing documents by following the proper procedure. Vague restrictions are difficult to enforce, and we always recommend amending governing documents to make restrictions as clear as possible. Unfortunately, as most association members are aware, the amendment process can take some time. What if the objectionable activity needs to … Continue reading

Required E-mail Notice of Collection Proceedings?

Lawyers get asked about reported cases all the time, but usually what happens in a specific lawsuit isn’t that relevant to parties not involved in the case. That’s because circumstances are different, facts vary, associations are created at different times, it’s a condo instead of an HOA, etc.  That said, the decision in an appellate case can be instructive, and that’s certainly the case with a decision regarding collections this week from the NC Court of Appeals. In the case In re: Ackah a homeowners association foreclosed on a lot for nonpayment of assessments. The property was eventually sold to … Continue reading