North Carolina HOA Laws

Homeowners associations in North Carolina are bound by certain state laws. Understanding these North Carolina HOA laws is the key to avoiding the risk of liability for your association.

How to Form an HOA in North Carolina

According to Section 47F-2-101 of the North Carolina Planned Community Act, a planned community can be created by executing a declaration in the same manner as a deed. This declaration must be recorded in all the counties where any part of the community is situated.

For Homeowners Associations

The North Carolina Planned Community Act governs the creation, alteration, management, and termination of planned communities established on or after January 1, 1999, in the state. There are some exceptions, though, found under Section 47-1-102 of the Act.

You can find the North Carolina Planned Community Act under Chapter 47F of the North Carolina General Statutes. It consists of four articles, each one divided further into sections.

Article 1 – General Provisions

Article 2 – Creation, Alteration, And Termination Of Planned Communities

Article 3 – Management Of Planned Community

For Condominiums

There are two Acts that govern condominium associations in North Carolina. The first is the North Carolina Condominium Act, which regulates the formation, alteration, and dissolution of condominiums established after October 1, 1986. It also provides guidance on the management and protection of purchasers. The second is the North Carolina Unit Ownership Act, which applies to condominium associations established prior to October 1, 1986.

North Carolina Condominium Act

You can find the North Carolina Condominium Act under Chapter 47C of the North Carolina General Statutes. It consists of four articles, each one divided further into sections.

Article 1 – General Provisions

Article 2 – Creation, Alteration, And Termination Of Condominiums

Article 3 – Management Of Condominium

Article 4 – Protection of Purchasers

North Carolina Unit Ownership Act

You can find the North Carolina Unit Ownership Act under Chapter 47A of the North Carolina General Statutes. It contains only two articles, which are further broken down into sections.

Article 1 – Unit Ownership Act

Article 2 – Renters In Conversion Buildings Protected

North Carolina HOA Laws on Corporate Governance

The North Carolina Nonprofit Corporation Act regulates all non-profit corporations in the state in terms of corporate procedure, structure, and management. In North Carolina, all homeowners associations must be incorporated. And, all associations formed after January 1, 1999, must establish themselves as non-profit corporations. Therefore, such associations must comply with the provisions set forth in the North Carolina Nonprofit Corporation Act. Condominium associations, on the other hand, can choose to form as either non-profit or for-profit corporations.

You can find the North Carolina Nonprofit Corporation Act under Chapter 55A of the North Carolina General Statutes. It contains 18 articles, namely:

• General Provisions.
• Organization.
• Purposes and Powers.
• Names.
• Office and Agent.
• Members and Memberships.
• Members’ Meetings and Voting; Derivative Proceedings.
• Directors and Officers.
• Amendment of Articles of Incorporation and Bylaws.
• Merger.
• Conversions.
• Transfer of Assets.
• Distributions.
• Dissolution.
• Reorganization.
• Foreign Corporations.
• Records and Reports.
• Transition and Curative Provisions.

North Carolina HOA Laws on Mediation for Disputes

According to the HOA laws of North Carolina, associations must inform members of their right to initiate a mediation. These associations must do this at least every year. If a dispute arises, members or HOAs can request a mediator from the Mediation Network of North Carolina. They can also request a mediator from the North Carolina Dispute Resolution Commission. But, if the dispute is exclusively the result of a member’s delinquency, then this section does not apply.

North Carolina HOA Laws on Solar Rights

According to Section 22B-20 of the North Carolina General Statutes, homeowners associations can’t prohibit members from using or installing solar collectors such as solar panels. Any covenants, restrictions, or rules that prevent homeowners from installing such devices are deemed void and unenforceable. However, associations can impose reasonable restrictions, such as screening and placement of such devices.

North Carolina HOA Laws on Records Inspection

Members have a right to inspect association records, such as financial records and minutes of board meetings (including executive session minutes). Associations must make these records reasonably available for review by any lot owner upon their request. The written request must be submitted at least 5 business days in advance. And, the association may charge a fee to produce copies of the records requested, provided it does not exceed the estimated material and labor costs.

North Carolina HOA Laws on Fair Debt Collection

The North Carolina Debt Collection Act protects consumers from unfair, misleading, or abusive debt collection practices. It works somewhat similarly to the federal Fair Debt Collection Practices Act.

Under both the federal and state-level Acts, homeowners are considered consumers, and HOA dues are considered debts. The difference, though, is that the FDCPA does not consider homeowners associations as debt collectors. But, the North Carolina Act also applies to creditors, not just debt collectors, which means it might cover homeowners associations as well.

Victims of prohibited debt collection practices can lodge a complaint with the Federal Trade Commission, the Consumer Financial Protection Bureau, or the Attorney General’s Office.

Fair Housing

The North Carolina State Fair Housing Act protects people from housing discrimination based on national origin, color, race, sex, religion, familial status, or handicapping condition. It functions in the same way as the federal Fair Housing Act.

The state also provides protection to persons with disabilities under the Persons With Disabilities Protection Act. This applies to public accommodations, such as homeowners associations with common areas open to the public. The Act works similarly to the Americans with Disabilities Act.

Housing discrimination victims can report violations to the U.S. Department of Housing and Urban Development or the Housing Discrimination Section of the North Carolina Civil Rights Division. Victims can also file a lawsuit in federal district court.