Governor Signs Bill Into Law Amending Residential Property Disclosure Act and Planned Community Act
On June 27, 2011, the Governor signed House Bill 165 into law making changes to both the Residential Property Disclosure Act and Planned Community Act. The legislation makes minor adjustments to a homeowners association’s foreclosure rights and adds additional disclosures to the Residential Property Disclosure Act that a seller of residential real property must make.
Under the new law, effective October 1, 2011, a homeowners association may not begin foreclosure until the assessment has remained unpaid for at least 90 days and unless the executive board has voted to commence the foreclosure against a specific lot or unit. The new law requires the board to vote specifically to commence foreclosure against a particular named property, and such vote should be reflected in the minutes of that meeting. The bill also amends the Residential Property Disclosure Act to gives the purchaser of real property has the right to insist a seller provide the “Owners Association and Mandatory Covenants Disclosure Statement” to be developed by the NC Real Estate Commission. A buyer and seller may opt out of the disclosure statement if both parties agree. A seller also has the option on the form to check the box for “no disclosure” if the seller does not want to provide the requested information. If the seller does choose to provide the disclosure information, the form will require disclosure of the amount of assessments; whether any special assessments are proposed; and whether there are any lawsuits the association is involved in, among other disclosures. For a copy of the bill click here.