North Carolina Legislature Adopts Changes to Homeowners Association Statutes

Effective October 1, 2009, townhome communities, planned unit developments and condominiums in North Carolina will be subject to several statutory changes in both the Planned Community Act (Chapter 47F) and the Condominium Act (Chapter 47C).  These changes in the law will require some additional procedures on the part of the homeowners association and on the attorney for collection of delinquent assessments.  The General Assembly also enacted legislative changes affecting the use of solar collector devices, but these changes will not affect the current law for any existing planned communities or condominiums – only subdivisions or condos created after December 1, 2009.

The first piece of legislation, House Bill 806, was signed into law on August 26, 2009.  This bill was designed to insure that all owners receive notice of the filing of the claim of lien prior to the institution of foreclosure proceedings.  Generally under the new law, the Association is now required to make “reasonable and diligent efforts” to ensure that its records contain the owner’s current mailing address.”  While there are some specific requirements, this law also imposes a heightened obligation on the Association to act on any information managers, board members or attorneys may have that the mailing address in the Association’s records is not accurate – this would include knowledge of returned mail from the post office, knowledge that the property is vacant or knowledge that there is a tenant occupying the property rather than the owner.  House Bill 806 also imposes new requirements for the claim of lien document that is filed with the Clerk of Court.  Every claim of lien must now contain a statement in boldface, capital letters, on the front page of the lien that essentially states that the document constitutes a lien against the owner’s property and that if not paid, the lien may be foreclosed.  Your attorney handling such liens should be familiar with the new law.  In addition, the person signing the claim of lien must sign a certificate of service, attached to the lien itself, by which that person verifies that he has mailed a copy of the claim of lien both by regular, first-class mail, and by either certified mail, return receipt requested, or by overnight delivery with a qualified carrier (such as Fed Ex, UPS, DHL, etc.)   The second piece of legislation, House Bill 1387, was signed into law on August 28, 2009.  This bill invalidates any new restrictive covenants, created on or after December 1, 2009, which covenants would prohibit the installation of solar collector devices (solar panels, receptors for solar appliances, etc.)  This law does not apply to any existing restrictions contained in Declarations prior to December 1, 2009, and it does not apply in any event to multi-story “stacked” condominiums.  Managers and developers, however, should be aware of these changes in law as they affect new communities created on or after December 1, 2009.   For a copy of House Bill 806 please click h806.pdf. 

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