NC GENERAL STATUTES HOMEOWNER PRIMER -Part 2
21. Does a Member have a right to audio- or video-records meetings of the Board? Under what circumstances or conditions?
There is no statutory right for a member to audio or video-record meetings of the executive board.
22. Can Non-Members attend Board Meetings?
Both the NC Planned Community Act (NCGS § 47F-3-108(b)) and the NC Condominium Act (NCGS § 47C-3-108(b)) provide as follows:
At regular intervals, the executive board meeting shall provide lot owners an opportunity to attend a portion of an executive board meeting and to speak to the executive board about their issues or concerns. The executive board may place reasonable restrictions on the number of persons who speak on each side of an issue and may place reasonable time restrictions on persons who speak.
These two statutes apply retroactively to older associations.
23. Does a Member have a right to review books and records of the Association?
1. If so, what books and records can be reviewed?
2. Can the Member obtain copies of the books and records requested?
3. Does a Member have to pay for copies of the books and records?
4. Are there books and records which the Association can withhold or otherwise prevent a Member from reviewing?
Both the NC Planned Community Act (NCGS § 47F-3-118(a)) and the NC Condominium Act (NCGS § 47C-3-118(a)) provide that all financial and other records, including records of meetings of the association and executive board, shall be made reasonably available for examination by any lot owner and the lot owner’s authorized agents as required in the bylaws and Chapter 55A (the Nonprofit Act). The Nonprofit Act provides greater detail on the rights of members as to records, distinguishing between those records available upon request (i.e., governing documents, actions adopted by the members, minutes of membership meetings, written communications to the members, names and addresses of board members) and other records which may be available depending on the circumstances. (NCGS § 55A-16-01 through § 55A-16-01) A corporation may impose a reasonable charge, covering the costs of labor and material, for producing for inspection or copying any records provided to the member; however, the charge may not exceed the estimated cost of production or reproduction of the records. NCGS § 55A-16-03.
24. What are the Reserve requirements in the State? Are Reserve Studies mandated?
What reporting requirements does the Association have with respect to the status of the Reserves, the Reserve Accounts or the funding of the Reserves?
There is no statutory reserve or reserve study requirement in the NC Planned Community Act. The NC Condominium Act provides that the public offering statement must include a statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement. NCGS § 47C-4-103(a)(5).
25. What are the resale disclosure requirements?
The Residential Property Disclosure Act (NCGS § 47E) requires owners of residential real estate to furnish potential purchasers a Residential Property and Owners’ Association Disclosure Statement. The Disclosure Statement is not required on the first sale of a dwelling that has never been inhabited. Several questions on the Disclosure Statement concern associations the property is subject to and any outstanding financial obligations, among other things.
26. Does the Membership by Vote or the Board of Directors establish the Assessment?
Varies. (See Question #27)
27. Is a budget required?
For planned communities created on or after January 1, 1999, and governed by the NC Planned Community Act:
Within 30 days after adoption of any proposed budget, the executive board shall provide to all the lot owners a summary of the budget and a notice of the meeting to consider ratification of the budget, including a statement that the budget may be ratified without a quorum. The executive board shall set a date for a meeting of the lot owners to consider ratification of the budget, such meeting to be held not less than 10 nor more than 60 days after mailing of the summary and notice. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the lot owners in the association or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified by the lot owners shall be continued until such time as the lot owners ratify a subsequent budget proposed by the executive board. NCGS § 47F-3-103(c)
For condominiums (regardless of when created):
Within 30 days after adoption of any proposed budget for the condominium, the executive board shall provide a summary of the budget to all the unit owners, and shall set a date for a meeting of the unit owners to consider ratification of the budget not less than 14 nor more than 30 days after mailing of the summary. There shall be no requirement that a quorum be present at the meeting. The budget is ratified unless at that meeting a majority of all the unit owners or any larger vote specified in the declaration rejects the budget. In the event the proposed budget is rejected, the periodic budget last ratified shall be continued until such time as the unit owners ratify a subsequent budget proposed by the executive board. NCGS § 47C-3-103(c)
28. Is an annual audit required?
There is no statutory annual audit requirement. However, both the NC Planned Community Act (NCGS § 47F-3-118(a)) and the NC Condominium Act (NCGS § 47C-3-118(a)) provide that notwithstanding the bylaws, a more extensive compilation, review, or audit of the association’s books and records for the current or immediately preceding fiscal year may be required by a vote of the majority of the executive board or by the affirmative vote of a majority of the owners present and voting in person or by proxy at any annual meeting or any special meeting duly called for that purpose. These two statutes apply retroactively to older associations.
29. Does the State regulate the collection of assessments?
1. What happens if a Member is delinquent in the payment of assessments?
2. How can an association increase annual assessments?
3. Under what circumstances can my association levy special assessments?
4. Are there provisions related to additional assessments or adjustments in the budget or assessment level in the event of a deficit?
Both the NC Planned Community Act (NCGS § 47F-3-116) and the NC Condominium Act (NCGS § 47C-3-116) detail the process for collection of delinquent assessments. Generally, any assessment levied against a lot/unit remaining unpaid for a period of 30 days or longer constitutes a lien on the lot/unit when a claim of lien is filed of record in the office of the clerk of superior court of the county in which the lot is located in the manner provided by statute. Certain statutory steps are required both before and following the filing of the lien. The statutes governing collection of assessments apply retroactively to older associations.
There are no statutory requirements for the levying of annual or special assessments. However, see Question #27.
30. What authority does the association have to access a Unit or Lot? Under what circumstances?
For all planned communities, each lot owner shall afford to the association and when necessary to another lot owner access through the lot owner’s lot or the limited common element allocated to the lot owner’s lot reasonably necessary for any such maintenance, repair, or replacement activity. NCGS § 47F-3-107(a). This statute applies retroactively to older planned communities. For condominium associations created on or after October, 1, 1986, each unit owner must afford to the association access through his unit as reasonably necessary for the maintenance, repair, or replacement of common elements. NCGS § 47C-3-107(a).