The North Carolina General Assembly passed Senate Bill 16 and presented it to the Governor on August 4th. The act creates a commission to study the process for mediation or arbitration of disputes between property owners and their association. The commission is required to report its findings and recommendations to the 2018 regular session of the General Assembly when it convenes next year.
Litigation of such disputes can be very expensive and the cost of such litigation has discouraged some property owners and associations from pursuing their claims. However, requiring arbitration could likely include a prohibition on the appeal of any decision, leaving property owners and associations stuck with rulings by an arbitrator or arbitration panel that are in direct conflict with state law. The parties to such a dispute can already voluntarily agree to arbitration and/or mediation. Requiring lot owners and associations to give up their right to pursue their claim in court with the opportunity to appeal any errors of law that are made is a valuable right and the proposed study increases the chance of an unfair outcome. We recommend you contact your local State Representative and State Senator to share your concerns about this legislation and advise them that voluntary mediation of such disputes is already permitted and mediation is mandatory when a suit is filed in Superior Court.