Problems with Short-Term Rentals? Call a Town Hall Meeting. This column was authored by my colleague Allen Norwood.  Allen is a retired columnist and home editor for the Charlotte Observer.  He currently writes a column for the Observer’s weekly Home/Design section. If you’re concerned about short-term rentals in your neighborhood — and lots of you are, judging from my email inbox — it’s a good idea to call everybody in the community together for a meeting. No, not an official …

Can my HOA charge me for copies of financial records? Question:  I asked permission to review my homeowners’ association’s financial records for the past three years. I literally had to show the board where in the North Carolina statutes it said I had that right to these records before they would provide them to me. I understand that the law allows the HOA to impose a “reasonable charge” for producing and/or copying the HOA’s records for my review. However, …

Spotting and Stopping Fraud and Embezzlement in Your HOA This week’s column was written by my colleague Courtney R. LaLone, CPA, with LBA Haynes Strand, PLLC in Matthews, North Carolina. His practice focuses on financial and tax advice to community and condominium associations. Fraud and embezzlement can cause a homeowners’ association’s (“HOA”) board of directors a lot of time, money, and energy. So how can the board prevent potential fraud or embezzlement before it occurs? The solutions are simple but …

Can HOA board members be required to sign a Code of Conduct? Question:  Our HOA board has developed a code of conduct policy for board members. It specifically states that board members who violate it can be removed. Our bylaws include a specific process for removal of board members, based on a percentage vote of the members of the HOA. Can the board adopt a policy that conflicts with the bylaws? Answer:  I occasionally have HOA boards ask me to provide …

To Pay or Not to Pay. . . HOA fees Question:  I live in a subdivision with recorded deed restrictions that address the use of the property, but the restrictions have no provisions for the establishment of an HOA, maintenance assessments, dues, or fines. The developers recorded a letter of authority to the HOA that states that the homeowners “may” join the HOA.  The HOA has created bylaws that purport to automatically make every homeowner in the community a member, and …

What’s the difference between HOA officers and directors? Question:  The developer of our community has sold all of the lots and turned control of the homeowners’ association (“HOA”) over to the homeowners. The bylaws for our HOA refer to “officers” and also to “directors” and “the board of directors.” Aren’t they the same thing?  How are they elected? Answer:  Almost all HOAs are established as nonprofit corporations that are created under state law. For-profit corporations have shareholders, whereas nonprofit corporations have …

HOA Fines – Revenue or Enforcement? Question:  Can a North Carolina homeowners’ association impose a recurring fine for a violation of the restrictive covenants (CCRs) after the violation has been cured? In short, are fines permissible as a revenue stream instead of just to force compliance with the CCRs? Answer:  By statute (N.C.G.S. § 47F-3-107.1) in North Carolina, daily fines can be imposed only after written notice to the owner and a hearing, and only for as long as an ongoing …

The Annual Budget Ratification for Homeowner Associations with Outdated Budgets Question: My homeowners’ association (“HOA”) board presented members an outdated budget for us to ratify for the current year. How can an outdated budget, not previously seen or discussed, be legal? Answer: Most HOAs in North Carolina are organized as non-profit corporations. North Carolina law requires that HOAs hold an annual budget ratification meeting in advance of each fiscal year (though the law doesn’t apply to planned communities formed prior to …

HOA Fines – Revenue or Enforcement? Question:  Can a North Carolina homeowners’ association impose a recurring fine for a violation of the restrictive covenants (CCRs) after the violation has been cured? In short, are fines permissible as a revenue stream instead of just to force compliance with the CCRs? Answer:  By statute (N.C.G.S. § 47F-3-107.1) in North Carolina, daily fines can be imposed only after written notice to the owner and a hearing, and only for as long as an ongoing …

North Carolina Community Association Legislative Wrap-Up – July 2017 Courtesy of Greensboro attorney Jim Slaughter of Black, Slaughter, Black, following is a summary of the status of various legislative bills in the North Carolina legislature that could affect condominium and community associations.  Jim always has his ear to the ground for the legislative goings-on in Raleigh, and I appreciate him allowing me to reprint his article here. The General Assembly adjourned its 2018 regular session this month, so questions have …