Within the last several months, community association attorneys in North Carolina have begun to see a new scenario with their clients: the ground lease. Usually, when someone purchases a lot, they own the lot and any structures on that lot, such as a home, outbuildings, or landscaping installations. However, we are now seeing situations where someone purchases a lot, but only leases the home and other structures on the lot (the “Improvements”) for some long period with an option to buy at the end. The duration of these leases is variable, but often extends to periods as long as 99 … Continue reading
Asset Protection in North Carolina (Part 2)
One of the primary strategies for protecting real estate for long-term care and Medicaid purposes involves a special kind of deed converting the real estate to a non-countable asset while also making it non-recoverable from the Medicaid estate recovery laws. Although generally used for Medicaid planning, I often inform clients that, in the event they never need long-term care or to apply for Medicaid, the deed provides a multitude of other benefits including general asset protection and probate avoidance. While changing the character of real estate ownership does not exempt the property from the claims of creditors, it can make … Continue reading
Asset Protection in North Carolina (Part 1)
I strive to write blogs that hit on the most frequent areas my clients inquire about in the first meeting. One of the most common, if not the most common, comments from clients in the first meeting is “we just want make sure things are protected”, “how can I protect what I have?”, or something along those general lines. These are, of course, very general comments so the natural next step is to find out exactly what the client means in order to begin formulating specific estate planning goals. In prior blogs, I have focused on long-term care expenses as … Continue reading
Why Would You Need an Owner’s Title Insurance policy when buying a home?
And is it necessary? The home buying process can be a confusing and hectic experience, with some of the most complex decisions you might ever have to make in your lifetime. One of those decisions may be the choice of whether to purchase an owner’s title insurance policy. Click here for more information about the basics of title insurance. If you’re buying a house with a mortgage, the lender you choose will always require the purchase of a lender’s policy as a condition for the loan, but why would a homeowner also need their own policy? You might ask, if … Continue reading
What’s the Deal with Death Taxes?
In my experience, one of the initial questions from clients is what can I do to minimize estate taxes? In many cases, clients initially express an interest in creating a trust based on the notion that it is needed to minimize taxes. While there are many types of advanced planning trusts which are intended to remove assets or appreciation from a person’s taxable estate, the benefits of a standard revocable living trusts commonly used in estate planning typically does not include avoidance of estate taxes because any assets transferred to a revocable living trust remain in the settlor’s (the person … Continue reading
What Is a Reserve Study and Why Is It Important for My Association?
Community associations play a crucial role in maintaining the quality of life and property values. They oversee a wide range of responsibilities, from maintaining common areas to enforcing community rules and regulations. One often underappreciated but critical aspect of appropriate association management is long-term financial planning. One of the most valuable tools for ensuring a sound financial future for your association is the reserve study. In this article, we will discuss why community associations in North Carolina should prioritize conducting regular reserve studies, and what role the community’s attorney plays in that process. The Importance of Financial Planning for Community … Continue reading
Is It Okay for Our Association to Have a Social Budget?
For many community associations, it is either the middle of budgeting season, or they have just completed this financial review period for the coming year. Budgets include many categories, including maintenance, landscaping, legal, accounting, and management expenses. But what about a line item for social? Is a social budget appropriate or even allowed under the governing documents? I have been told that I like to use the phrase “it depends”, and that would hold true here. If your association is organized for more limited functions, such as maintaining the private road and street lights, there may not be authority to … Continue reading
The Cost of Estate Planning vs the Cost of No Plan
Many people may consider the cost of Estate Planning to be prohibitive. I’d like to dispel that notion, particularly compared to some of the possible alternatives. A reasonable analogy can be made to insurance (health, car, or home)—although we may grumble about paying for insurance, we know that not paying for insurance can be exponentially more expensive! The same is true of Estate Planning. In the following paragraphs I’ll describe the simplest complete Estate Plan commonly used; please note that if your circumstances require more complexity the pitfalls associated would multiply in complexity and ultimately cost as well. An Estate … Continue reading
Support Your South Carolina Community Associations Institute (CAI) Legislative Action Committee
I am sometimes asked about the South Carolina chapter of the Community Associations Institute (CAI) and the Legislative Action Committee. First, to make it easier, we usually refer to it as the “SC-LAC.” The SC-LAC is a diverse group of homeowner leaders, community managers, and business partners who work hard to protect and advance association communities and their interests at the state legislative level in Columbia. Each legislative session there are bills proposed that impact the functioning, operation, and well-being of community associations and their business partners. In the most recent legislative session, the SC-LAC provided testimony at hearings related … Continue reading
Does My Spouse Have to Pay for Half of My Student Loans in North Carolina?
It should come as no surprise that more and more people are going to college. According to the Education Data Initiative (EDI), 40% of 18-24 year olds attend at least some kind of post-high school education. And with higher enrollment rates comes more and more student loan debt, and North Carolina is no exception. Also according to the EDI, borrowers in North Carolina borrow an average of $38,134 to attend college, and the number is even higher for advanced degrees such as law, medical and graduate programs. These ever-increasing student loans are carried into, or taken out during, marriage. One … Continue reading
Property Tax Rates in South Carolina
Congratulations, you have just purchased a home in South Carolina! While most action items related to the closing will be completed prior to and while at the closing table, there is one important step to take following your purchase. In South Carolina, whenever someone buys a piece of real estate property, it is initially assessed at a 6% ratio. However, if you will be using the property as your primary residence, then you are entitled to apply for and receive a 4% assessed ratio. In order to receive the lower assessment for the owner-occupied property, the property owner must submit … Continue reading
Keys to Effective Homeowner Association (HOA) Leadership
I recently facilitated an election at a contentious HOA meeting. The lone board member called a special meeting to fill the vacant board seats and she was concerned it would not go smoothly due to conflict amongst the members. Her first brilliant move was to consult an attorney for advice on how to properly notice and conduct the election and her second smart move was to have us facilitate the meeting. Having a neutral parliamentarian or HOA attorney lead the meeting diminishes any concern about impropriety and also removes the board member(s) from the hot seat. I am happy to … Continue reading
Who Needs to Bring an ID for a Real Estate Closing?
You would be amazed how many people come to closing without a picture ID. A notary public, often the closing attorney, is required to verify the identity of every person listed on a deed, deed of trust, mortgage, title insurance affidavit(s) and/or other document(s) requiring notarization. If you are one of these individuals, please make sure you have at least one form of photo identification with you. This can be a state-issued driver’s license or ID card or U.S. or foreign passport. Sometimes if none of these might be available, alternatives can exist but those would be on a case-by-case … Continue reading
Legislative Update September 25, 2023 – House Bill 542 Adopted by Senate, Now in Conference Committee
The question I’ve been asked most often this summer by association board members and industry professionals has been “What’s going on with House Bill 542?” There’s not been an easy answer. That’s because the provisions in the legislation have been such a moving target. On the NC General Assembly website, you’ll see four editions of the bill. Each adds a host of new requirements for North Carolina homeowner and condominium associations. Not listed on the website are at least eight prior “drafts” of HB 542, as different proposals were floated and either added or dropped from the proposed legislation following … Continue reading
What Is the “Corporate Transparency Act” and Why It Matters to Your Association and Directors
For the past year, community association attorneys have been discussing the impact of the CTA (Corporate Transparency Act). Much of the discussion has been on whether the Act does or does not apply to homeowner and condominium associations. As the effective date of the law is January 1, 2024 (with first reports being due no later than January 1, 2025), the need for clear answers has become more pressing. What Is the CTA? The Corporate Transparency Act was enacted in 2021 as part of the Anti-Money Laundering Act of 2020. In short, the Act is intended to stop foreign actors … Continue reading
5 Law Firm Carolinas Attorneys Recognized in The Best Lawyers in America
Five attorneys at Law Firm Carolinas have been named to the 2024 Edition of The Best Lawyers in America. Carole Albright, who is a Board Certified Specialist in Family Law, has been recognized in the practice of Family Law. Keith Black, who is a Board Certified Specialist in Family Law, has been recognized in the practices of Family Law and Family Law Mediation. Steven Black, who is a Board Certified Specialist in Residential Real Estate, has been recognized in the practice of Real Estate Law and Community Association (HOA and condo) Law. Jim Slaughter has been recognized in the practices … Continue reading
Lights, Camera, Lawsuit! Your Property, Common Property, and Intellectual Property
Movies and music provide immense amounts of joy and entertainment to people all over the world. Collectively, the movie and music industries are worth upwards of twelve figures in revenue in a single year (for those of you counting the zeros on your hands at home . . . that’s north of $100,000,000,000.00 a year!). Much like you may be protective of your property and your homeowner’s association may be protective of its common property, it is understandable that those in the movie and music industry are also extremely protective of their property. When most people hear the word “property” … Continue reading
Fourth Circuit Makes Ruling on Attorneys’ Fees Amount
Under North Carolina law, parties entering into loan agreements may specify an amount for attorneys’ fees, in the event that one of the parties breaches or there is a default. The prescribed amount of attorneys’ fees may be up to 15% of the amount owed under the terms of the loan agreement. Frequently, the loan agreement is silent about the specific amount of attorney’s and the agreement simply states that the breaching party shall be responsible for “all reasonable fees and expenses.” The applicable statute defines “reasonable” as 15%. The United States Court of Appeals for the Fourth Circuit (which … Continue reading
Parliamentarian Pro Tips: Assisting Large Meetings
Large annual meetings and conventions create special demands on the parliamentarian. For example, numerous business items may move very quickly with lightning speed. The large audience and attendees milling about make it difficult to see who wishes to be recognized to speak. Votes by voice or even standing can be hard to judge, and the organization may not have electronic voting capabilities. Larger crowds gathered in one place create problems that are not present in smaller board or membership meetings. That said, Robert’s Rules of Order Newly Revised and other parliamentary manuals tend to focus more on meeting procedure than … Continue reading
Can Boards Make Decisions By Email?
Recently, a question came up on a national nonprofit list serve about whether boards can and/or should make decisions through unanimous consent by email. Here was my response. “Since this is a national question and I’m only licensed in North Carolina, what follows is not specific legal advice. Instead, let me provide a general discussion based on my many years of assisting boards as a parliamentarian and attorney. Most states have adopted some version of the model Nonprofit Corporation Act from the American Bar Association. The most recent is the Fourth Edition, but few states have moved to that. Membership … Continue reading