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
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
Too often we represent property owners who are surprised to find a lien on their property after hiring a contractor for new construction or renovations. Chapter 44A, Article 2 of the general statutes of North Carolina gives construction contractors, design professionals and suppliers the right to place a lien upon property that has benefited from their service or material and to foreclose the lien if they are not paid. There are two types of liens commonly used against property owners: (1) liens upon property and (2) liens upon funds. A construction lien upon property is a direct claim on the real estate improved that can result in the real estate being sold to pay the claimant. Liens upon funds enable
Every amendment to the Declarations shall be recorded in every county in which any portion of the Planned Community is located and is effective only upon recordation. N.C. Gen. Stat. § 47F-2-117.
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.
An Association subject to the Planned Community Act shall not be liable for maintenance, repair, and all other expenses in connection with any real estate which has not been incorporated into the planned community. N.C. Gen. Stat. § 47F-3-107(e).
The death or incapacity of a member appointing a proxy does not affect the right of the corporation to accept the proxy’s authority, unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment. N.C. Gen. Stat. § 55A-7-24.
Filing a lien and pursuing a civil action are two options available to associations for collecting unpaid assessments and fines from delinquent lot owners. It is also critical that you carefully evaluate the costs and benefits to the association before electing to pursue foreclosure. Many associations attempt to file their own liens without the assistance of an attorney, but because there are very technical statutory requirements involved, many miss the mark. These mistakes are critical because filing an invalid lien can constitute slander of title for which an association may be sued, in addition to creating a permanent obstacle to collecting the unpaid assessments. Mistake #1: Not waiting long enough before filing the lien. General Statute section 47F-3-116 governs the
Filing a lien and pursuing a civil action are two options available to associations for collecting unpaid assessments and fines from delinquent lot owners. For associations that elect to file a lien, the next step when the owner continues to refuse to pay is foreclosure. Foreclosures can be expensive and time-consuming if the lot owner contests the proceedings or appeals the orders entered by the Clerk of Court to Superior Court. Therefore, it is critical that association boards carefully evaluate this option before electing to pursue this remedy. If there is a deed of trust, judgment lien, or other encumbrance on the property prior in time to the recorded association lien, the decision becomes more difficult. Foreclosure of the association
An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes. An appointment of a proxy is valid for 11 months unless a different period is expressly provided in the appointment form. N.C. Gen. Stat. § 55A-7-24.