For several years the subject of short-term rentals has been a hot topic in planned communities. A North Carolina Supreme Court case had held that an amendment to declarations outlawing short term rentals may not be permissible in area where short term rentals are common. That decision did suggest that while outright prohibition may not be allowed, limitations on rentals were permitted. Planned Communities have been dealing with the issue by amending their declarations in a number of different ways but we have not seen a case reach the Court of Appeals yet that would offer more detailed guidance on what will and will not be permitted. We will update this topic as new decisions are published.
Our Community Association Report has been on hiatus and is now back online. We hope you enjoy this edition of our our Planned Community Report. Let us know of any topics you would like to see addressed in future reports.
Be sure that your notice of the annual meeting contains the time and place of the meeting, the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, or any budget changes, and any proposal to remove a director or officer. N.C.G.S. § 47F-3-108.
Trying to predict how a court will rule on planned community issues can be difficult. Each community has a unique set of covenants and many issues that arise do not impact enough lots or money to reach the Court of Appeals. However, there appears to be a trend developing in that could be harmful to lot owners – application of a contract analysis. The Court of Appeals has approached declarations as a simple contract with lot owners and in some recent cases and upheld provisions that placed a burden on lot owners and/or associations. Some judges are taking the position that if the declarations give the developer an unfair advantage there is no remedy because lot owners agreed to the
Amendments to the Declarations of planned communities subject to the Planned Community Act must have the approval of at least 67% of the votes allocated by the Declarations. In most all circumstances, each lot has one vote meaning that there must be “Yes” votes cast by the owners of at 67% of all lots—not just the lots that vote. A lot that fails to vote is the equivalent of a “No” vote.
In an August 1, 2017 decision, Tanglewood Property Owners’ Ass’n v. Isenhour, et al., the North Carolina Court of Appeals affirmed the duty of a property owner that has the right to use an easement in a subdivision to pay for a share of the cost of maintaining the easement. In this case a voluntary property owners’ association created prior to the Planned Community Act was awarded judgment against a lot owner who claimed that he did not use all of the roadway easement in a subdivision and was not a member of the association. The Court’s opinion restated the principle that the obligation to contribute to road maintenance can be calculated on a pro rata (per lot) basis without
Arbitration and mediation have become more common in recent years. The inclusion of one-sided arbitration clauses in consumer agreements with large businesses has taken away the ability of consumers to obtain legal relief in courts. North Carolina’s requirement that all civil cases in Superior Court be mediated prior to trial has successfully reduced the number of cases going to trial and has shortened the time to conclude these cases. Arbitration and mediation both involve settlement of disputes but are different in one important way. The arbitration process requires a single arbitrator or a panel of arbitrators to hear evidence from the parties and reach a decision that is enforceable just like a judgment obtained in a trial. On the other
Criminals posing as IRS officials continue to bilk unsuspecting citizens out of their money using scam telephone calls threatening to have you arrested for nonpayment of taxes. If you receive a call that you suspect is an IRS impersonation scam, contact the Treasury Inspector General for tax administration (TIGTA) at 800 – 366 – 4484 to report the call. Find additional information on avoiding IRS scam calls here.
Associations subject to the Planned Community Act are required to maintain property insurance on the common elements and liability insurance. If the insurance is not available, the Association is required to give notice of that fact to all lot owners either by hand-delivery or by United States mail. N.C. Gen. Stat. § 47F-3-113.
Disputes sometimes arise when a mountain stream is a boundary line. Even though there may be a recorded plat showing metes and bounds of a stream boundary, the actual location of the stream prevails over the description in a plat.