Pending HOA Bill
A Legal Moment

Pending Bill Would Impose New Requirements on Subdivision Developers and Associations

Proposed Amendment to the Planned Community Act Seeks to Hem in Developers, Raise an HOA's Record-keeping Requirements, and Liberalize an Association's Authority to Amend its Declaration

   Manifesting a continuing interest on the part of legislators in tweaking the North Carolina Planned Community Act (PCA), a bill currently pending in the state legislature, if enacted, would impose significant new requirements on Declarants and HOA Leaders.

   First, House Bill 882 would add an entirely new section to the PCA (§ 47F-2-105) that would set forth specific provisions that must be included in every HOA Declaration.  Among the more notable requirements are:

•    The Declarant would be required to state the maximum number of lots that it is reserving the right to create in the planned community;

•    The Declarant would be required to describe all development rights together with a time limit within which to exercise each of those rights; and

•    The boundaries of each lot would have to be described within the Declaration itself.

    Second, the Bill would also cap the maximum threshold that an Association can require to pass an amendment to the Declaration at 80%.  Currently, § 47F-2-117(a) imposes a minimum threshold of 67% while allowing the Declaration to require anything above that percentage.

    Third, the time in which an enacted amendment may be legally challenged under § 47F-2-117(d) would be tripled from the one year to three years.

    Finally, HB 882 would impose upon HOA leadership significantly higher record-keeping requirements including, among others, “detailed records of receipts and expenditures,” all financial statements, audits, and tax returns for the preceding three years, and all records of the Board or Architectural review committee approving or denying requests for design or architectural approval submitted by owners.

    Notably, the “live” version of the Bill replaces an earlier version that would have established a “recovery” fund – funded by new annual HOA fees – to compensate an association or other “aggrieved person” in the event a property manager or executive board commits “certain” but unspecified “acts.”  In addition, the earlier version of the Bill would have required association officers and directors to complete a minimum of four hours of education on the laws related to community associations.  These provisions appear dead for the moment, however.

     Since the enactment of the Planned Community Act in 1999, the Legislature has enacted amendments to it in 2002, 2004, 2005, 2006, 2012, 2013 and 2014.


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Philip Roth is a founding shareholder at Marshall, Roth & Gregory, PC. One of the firm's principal litigators, Philip's practice involves myriad issues involving community associations.

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