Most associations have faced lot owners who refuse to “play by the rules.” Those owners may ignore limits on pets, attempt to build non-permitted structures, or create nuisances on their property. While injunctions can often require the lot owner to follow property restrictions, Associations have another tool that is less expensive and often makes sense as a first step in resolving the problem. N.C. Gen. Stat. § 47F-3-102(12) and §107.1 applies to all planned communities subject to the Planned Community Act regardless of their date of creation. It gives associations the power to fine and suspend privileges of lot owners for failure to comply with the declarations, bylaws and rules and regulations of the community. Notice and an opportunity to
N.C. Gen. Stat. § 47F-3-121 contains restrictions on the ability of associations to regulate or prohibit American and state flags and political signs. Be sure to check your declarations to make sure they are in compliance with this statute.
An association board of directors may take over operation of a planned community and discover that the declarant or declarant-controlled board entered into contracts that the board wishes to end. N.C. Gen. Stat. § 47F-3-105 provides that an association’s contract that began while the declarant controlled the association can be terminated without penalty. The contract must not be a bona fide contract or it must be unconscionable to the lot owners at the time the contact began. The board must give at least 90 days’ notice before terminating the contract. If your association has had discussions with your declarant regarding a turnover of the association to an elected board, it is important to have a properly prepared document spelling out
Associations, planned communities, and condominiums subject to all of the provisions of the Planned Community Act and the Condominium Act are required to permit proxy voting. Planned Communities and condominiums formed after the effective date of those statutes are permitted proxy voting unless the articles of incorporation or bylaws prohibit or limit proxy voting. One owner of a lot may execute a proxy, but if a lot is owned by more than one person, each owner of the lot may vote or register a protest to the casting of votes by the other owners through a proxy. It is important to make sure that proxies are dated. A proxy is void if not dated. A proxy terminates eleven (11) months
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
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.
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
Incorporated associations must prepare an alphabetical list of the names of its members entitled to notice of a meeting, showing the address and number of votes each member is entitled to cast. N.C. Gen. Stat. § 55A-7-20(a). The list must be made available for inspection prior to the meeting and during the meeting. N.C. Gen. Stat. § 55A-7-20(b).
So far in our series we have outlined the general nature of those rights and how long they can last, the requirements of transferring those rights from one person or company to another, and what happens when your declarant’s lender forecloses. In our last part of the series, we discuss what you can do when disputes arise between the declarant and the owners. An association and its members under the control of the declarant have few options to resist a declarant who is abusing control. Board members have a fiduciary duty to the association and this fiduciary duty must be met even if it conflicts with the desires of the declarant who appoints board members. If the board ignores its