HEAR4NC-FIGHTING FOR HOMEOWNERS IN NC
Our target constituencies are communities that are regulated by Homeowners’ Associations that are governed by the following laws:
★G.S. 47F – NC Planned Community Act– G.S. 55A-Non Profit Corporation Act
★G.S. 47C – NC Condominium Act- Unincorporated Non-Profit Associations Act-G.S. 59B
Uniform Common Interest Ownership Act (2008).
As our logo acronym stipulates, we are dedicated to Homeowner Education, Advocacy and Rights. To help you understand our charter, we have assembled several topics to advance your understanding and hopefully seek and obtain your participation in this important endeavor. A collaborative effort dedicated to the advancement of individual Homeowners’ rights in their fight against, of times, despotic HOAs’. Here is a brief snapshot of what we stand for:
Our mission is to provide an open forum for members of an association to discuss issues, provide education, to advocate for reform of amendments to governing documents and of the North Carolina Planned Community Act and Condominium Act, in order to protect their consumer rights, civil rights and constitutional rights of the members.
Our goal is to bring members of an association together as a team to operate their associations in a reasonable manner and in accordance with North Carolina State law and their governing documents, and thereby enhance their lifestyle and their investment in their association.
THE CONCEPT –
An association is a true democracy, the members of the association govern and decide on changes in their declaration and the bylaws and they interpret the bylaws. All of this is done at a duly called meeting of the members.
PROBLEMS – It has become apparent after many meetings and talking with members of associations throughout the State of North Carolina and attending meetings of the past House of Representatives’ Select Committee on HOA’s that many rights of the members have been violated and the NC Non Profit act (55A), NC Condominium Act (47C) and the NC Planned Community Act (47F) (Acts) have not been followed, either deliberately or because of lack of understanding or improper advice to the members.
1. BILL OF RIGHTS-The Acts (47F/47C) should be amended to state that the Bill of Rights in the U.S. Constitution and Article 1 in the North Carolina State Constitution are part of the Acts (47F/47C) and anything placed in the associations’ governing documents contrary to those sections would be null and void. The Acts (47F/47C) should be amended to add the members’ Bill of Rights that are in the Common Interest Ownership Act (2008) as amended. Broadened enforcement powers.
2. DECLARANT IS A LOT OWNER-The NC Planned Community Act (47F) should be amended to clarify that the declarant is a lot owner, and as such, the declarant is only entitled to one vote for each lot and must pay the same assessment as the other lot owners. The NC Planned Community Act (47F) should be amended to be in conformity with the NC Condominium Act (47C) to state that the declarant be required to gradually turn the management of the association over to the members, and after having sold 75% of the lots the declarant must turn the complete management of the association over to the members.
3. BOOKS AND RECORDS REVIEW-The Acts (47F/47C) should be amended to set forth specifically all of the documents that the executive board must make available to the members as set forth in the Uniform Common Interest Ownership Act (2008).
4. RIGHTS OF NON MEMBERS-Although it is part of parliamentary rules, the Acts (47F/47C) should be amended to state clearly that non-members are not permitted to attend the annual or special meeting of members nor address the members or discuss the issues unless the members approve of it by voting on the issue. The Acts (47F/47C) should be amended to state clearly that non-members cannot interpret the governing documents of the association, and the governing documents can only be interpreted by the members at a duly called meeting of the members.
5. LICENSED BROKERS AS COMMUNITY PROPERTY MANAGERS-We support House Bill 871 presently before the NC General Assembly. The Acts (47F/47C) should be amended to state that the association can only hire a licensed real estate broker as a community property manager. In our opinion, the members of an association presently can amend their bylaws to require that the executive board can only delegate property management duties to a licensed broker who is under the control of the NC Real Estate Commission. The rationale for the existence of Common Interest Communities is based on real estate principles, real estate law, and to protect the value of real estate, as such it involves real estate transactions and they must be under the control of the NC Real Estate Commission.
6. EDUCATION OF BOARD MEMBERS – We support House Bill 883 presently before the NC General Assembly. The Acts (47F/47C) should be amended to require that any member of the association elected to the executive board be required to take a course on the Acts (47F/47C). In our opinion, the members have the power to amend their bylaws to require as a qualification to be on the executive board that a member takes such a course or at least certify under penalty of perjury that the member has read and understands their respective Act and their governing documents. The NC Legislature should adopt House Bill 883 that requires any member elected to the executive board to take a course on the Acts (47F/47C) that would be provided by the NC Real Estate Commission. If the NC Real Estate Commission would provide such a course, it would standardize the rules across the State, and reduce the present confusion and reinforce the rights of the members to manage their respective associations.
7. REFUND OF SURPLUS FUNDS-The Acts (47F/47C) should be amended to clarify §47F-3-1 14 and §47C-3-114 titled Surplus Funds, in that if there is any surplus of operating funds at the end of the fiscal year, all of the excess operating funds must be returned to the members. The excess funds are either sent directly to the members or they are carried over to the following year as a credit to the member’s following year’s assessment. The manner of returning the funds is to be determined by the members at a meeting. If the excess operating funds are not returned to the members they then are subject to Federal income tax. (See Revenue Ruling 70-604)
8. MEMBERS RIGHT TO VOTE-The Acts (47F/37C) should be amended to state clearly that the executive board cannot amend the bylaws and cannot take away the member’s right to vote for any reason.
9. OPTION TO AMEND-The NC Planned Community Act should be amended to conform to the NC Condominium Act to allow HOA’s the option to form under the Unincorporated Non-Profit Association Act (G.S. 59B).Members of a Common Interest Community are consumers, and associations are debt collectors, and the NC Attorney General’s Consumer Protection Department must assist members of associations when their rights as consumers are violated.
10. FINANCE/BYLAWS COMMITTEES-The Acts (47F/47C) should be amended to require that each association must have a standing Finance Committee and a standing Bylaws Committee set forth in their bylaws. Presently, some associations have been astute enough to already have them in their bylaws, and members can amend their bylaws to include these committees and other committees they deem necessary. PROHIBIT PROXY VOTING-The Acts (47F/47C) should be amended to prohibit proxy voting. Absentee ballots and/or “quorum” proxies should be used. It is our opinion, that the members can amend their association’s bylaws to prohibit proxy voting but it may be difficult because of the use or misuse of proxies and the amendment would not get passed because the proxy holders would defeat the amendment. They would not want to lose their power and control over the association.
11. LIMITS ON COMMUNITY ASSOCIATION PARTICIPATION-It is our opinion that any association should not pay from association funds for dues or contributions to any private trade or industry organization concerning community associations. It is our position and opinion that any executive board member who is a member of the Community Association Institute has a conflict of interest issue. An executive board member must act in the best interest of the association
12. NON-JUDICIAL FORECLOSURE- We are opposed to non-judicial foreclosure, and the Acts should be amended to prohibit non-judicial foreclosure. Non-judicial foreclosure is not necessary, more expensive and only benefits the attorneys. Any foreclosure in an association reduces the market value of the remaining property in the association. Non-judicial foreclosure is not mandated by the Acts (47F/47C). It is our opinion that the members can amend their declaration to prohibit non-judicial foreclosure, and they can amend their bylaws to limit the power of the executive board to only use the judicial foreclosure procedure to recover assessments and fines due to the association.