Few things are more polarizing than people’s feelings towards homeowners associations. Some people love them. Some people hate them. Few people are indifferent.
Now North Carolina lawmakers are considering measures that could severely limit how HOAs can operate in the state, including limits their powers to put liens on properties of residences who don’t follow the rules.
The House Select Committee on Homeowners’ Associations have been meeting this year to investigate claims that HOAs have abused their power throughout North Carolina. The committee is expected to publish a list of recommended changes to HOA-related laws later this month, and then introduce their ideas as legislation in April.
One proposed measure would stop HOAs from foreclosing on people’s homes over just a few dollars in unpaid fines or fees. Such a bill passed the state House of Representatives unanimously last year but was almost entirely gutted and rewritten by the state Senate, and ultimately went nowhere. If enacted into law this year, the restrictions would slow down the foreclosure process significantly. Under one proposal, HOAs would be required to enter mediation with homeowners before filing a civil action.
Many HOAs raise dues, often as part of the annual budget. Another committee proposal would give homeowners more control over those due hikes. Under the preliminary recommendations: If an HOA wants to pass a budget that would raise dues by more than 10%, it would need a majority of all owners to approve it. And if an HOA wants to raise dues outside of the budget process, it would need a majority of owners to approve hikes of more than 5%.
With the anticipated release of recommended changes this month and subsequent legislative proposals in April,the JFB team will be closely monitoring the state lawmakers’ decisions. The impact of these potential reforms on the future of HOAs in North Carolina is a topic that will continue to capture our interest, and we will stay vigilant in observing how these developments unfold.