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
Tip of the Month
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.
Short Term Rentals
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.
Tip for Annual Meetings
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.
Trend in Court Cases
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
In order to be effective, amendments to the declarations must be recorded in accordance with Section 47F-2-117(e) of the Planned Community Act. Contact Bill Cannon firstname.lastname@example.org or Martha Bradley email@example.com if you need assistance with properly recording an amendment to your declarations.
The Importance of Communication
Many of the problems that face community associations have their origin in poor communications. Many lot owners have little contact or interest in the association until such time as they complain about some activity or lack of service. Community associations that are the most successful make an effort to keep their members informed on a regular basis so that a trusting relationship is developed. In our experience, the biggest challenge to a well-run association does not come from a large number of members opposing the association board but is caused by a complete lack of interest and cooperation by many lot owners. If a substantial number of apathetic lot owners are only contacted when the association needs their approval of some
Court of Appeals Enlarges Association Power
A September 5, 2017 opinion by a panel of the North Carolina Court of Appeals expands the assessment power of associations beyond limits previously set by that court. In Conleys Creek Limited Partnership v. Smokey Mt. Country Club Prop. Owners Ass’n, COA 16-647 (September 5, 2017) the panel dealt with the association’s assessment of dues for a clubhouse owned by the developer. Although acknowledging three prior decisions by other panels of the Court of Appeals holding that an agreement to pay dues for a golf course was a personal covenant between the lot owner and the original developer, this panel of the Court of Appeals greatly expanded the power of associations. The association argued that the Planned Community Act did not
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