Are you hoping to learn more about property owners associations in North Carolina? If that's the case, then you have come to the right place. In this article, we will discuss the relevant state and federal laws that govern these associations.

Understanding the Basics

Before we get to the North Carolina HOA laws, let's first talk about what an HOA is.

Homeowners associations (HOAs) are non-government organizations that are implemented for the betterment of a community. They help to maintain property values by setting certain standards for the community and maintaining and conducting repairs to shared facilities. These planned communities have certain rights and responsibilities and are governed by certain state and federal laws.

They are also regulated by their own governing documents, which comprise their Bylaws, Articles of Incorporation, and Declaration of Covenants, Conditions, and Restrictions (CC&R), among others.

These documents aid in the management of communal spaces, establishing and maintaining community standards, and outlining homeowners' duties within the organization.

State and Federal Laws That Govern HOAs in North Carolina

If you are the manager, executive, or board member of a homeowners association, it's important that you ensure that the organization complies with the relevant legislation. The first step is learning about these laws. In the section below, we provide an overview of the laws and regulations that typically apply to HOAs in North Carolina.

North Carolina Planned Community Act

Chapter 47F of the North Carolina General Statutes contains the North Carolina Planned Community Act. This act establishes the requirements for the formation, administration, and operation of homeowners organizations in North Carolina. Your association must abide by this legislation if it was established on or after the first of January 1999.

However, there's an exception to this rule. Communities with 20 lots or fewer are exempt from this act, but these neighborhoods can choose to be bound by this act's provisions by mentioning it in their official declaration.

Several elements of the legislation may still apply to an exempted HOA if they do not specifically choose to fall under it. Those pertaining to authority, the displaying of political signs and flags, and the issuing of fines are a few examples.

North Carolina Nonprofit Corporation Act

Most HOAs in the state are classified as nonprofit corporations and must abide by the North Carolina Nonprofit Corporation Act, which is outlined in Chapter 55A of the North Carolina General Statutes. The stipulations of this act are more focused on the legal framework and operational practices of HOAs.

Keep in mind that it would be impossible to cover all the laws that address homeowners associations, so it's important to look up local laws.

North Carolina Condominium Act

The North Carolina Condominium Act, which can be found in Chapter 47C of the North Carolina General Statutes, specifies how a condominium association is to be formed and administrated.

It is applicable to associations formed after the first of October 1986, and unless the organization expressly chooses not to be bound by it in its declaration, certain parts of this legislation also apply to condominium associations established before that date.

North Carolina Unit Ownership Act

The North Carolina Unit Ownership Act is the second act that deals with condominium associations. It can be found in Chapter 47A of the North Carolina General Statutes and applies to condominium associations that were established before the first of October 1986. The Unit Ownership Act contains more general provisions pertaining to the ownership of condos than the Condominium Act.

North Carolina Fair Housing Act

Housing providers, such as homeowners associations, are prohibited by this act from discriminating against individuals on the basis of their religion, race, familial status, color, national origin, sex, or physical or mental impairment.

North Carolina Debt Collection Act

Debt collection in the state is governed by the North Carolina Debt Collection Act (NCDCA).

Homeowners, who are considered consumers under the act, are protected by this law from unfair, dishonest, or oppressive debt collector practices. It functions like the Fair Debt Collection Practices Act (FDCPA), which is a federal law.

However, there is one significant difference between the state and federal laws. While creditors are also considered debt collectors under the NCDCA, the federal law describes debt collectors as third parties who recover debts on behalf of others.

That implies that collectors attempting to recover their own debts must also abide by state-level debt collection rules.

Fines for Non-compliance

HOAs have the authority to levy fair penalties for disregarding its bylaws. However, these associations are only permitted to impose penalties after providing the offending homeowner with sufficient notice and giving them a chance to be heard.

Keep in mind that property owners associations in North Carolina may not ban the installation of certain items, such as the displaying of the US national flag and solar panels.

Moreover, HOAs in North Carolina may also charge late fees for failing to pay dues if homeowners haven't paid the amount owed within 30 days of the due date. The maximum amount for these fees is $20 per month or 10 percent of any outstanding assessments or dues, whichever is greater.

Community associations are also permitted to charge special assessments. This one-time fee is what homeowners associations charge for unforeseen costs like installing new plumbing in the area.

Joining and Leaving a Homeowners Association in North Carolina

In North Carolina, if someone buys a house in an area where a HOA already exists, they are required to join and follow the HOA guidelines. At the closing for their property purchase, the buyer should be given documentation outlining the HOA and its bylaws.

One cannot just choose to leave a HOA if they purchased a home in an area that has one. The owner can sell their home or make a request to the association to have it removed if they no longer wish to be a part of the HOA.

Dissolving HOAs

A termination agreement is used in the same way as a deed to dissolve a homeowners association in North Carolina. A majority of the organization's members must agree to the termination of the HOA in order for it to happen.

If accepted, the terminating members will need to sign the agreement, pay any outstanding obligations, and sell the HOA assets. In order to finalize the dissolution, the necessary paperwork, such as Articles of Dissolution, will be submitted to the North Carolina Secretary of State and registered in the relevant county.

Dealing with Disputes and Complaints from Property Owners

The truth is that disputes and complaints are part of the package for HOA managers, executives, and board members. Although it's often best to try and resolve any issues in-house, sometimes things can get ugly, and attorneys who specialize in case law will be called in to fight the case.

We always recommend trying to settle every dispute without getting a lawyer involved, and knowing how to navigate issues that may arise is important. To help you, we have created a guide, which you can find here.

About DoorLoop's Innovative HOA Tools

With a powerful set of features and world-class support, you can ensure that your HOA is functioning efficiently with the help of DoorLoop. Whether you are hoping to improve your communication with members or need a comprehensive set of accounting tools, you can rest assured that DoorLoop has been designed to make your life easier.

The best part is that you can try it out risk-free. Get in touch with DoorLoop today to schedule your free demo or learn more about our intuitive software!

Closing Comments

Understanding what the law has to say about how a homeowners association in North Carolina should be run is imperative. It's important that you spend more time researching the local laws that may apply to your HOA to ensure that you remain compliant.

If you are ready to streamline your operations with DoorLoop, contact us today to get your free demo!

Frequently Asked Questions

1. What powers do common interest communities have?

In North Carolina, homeowners associations may regulate common areas, collect assessments for the maintenance of shared spaces, impose reasonable fines for non-compliance, and foreclose on a home to secure unpaid dues.

It's important to remember that an HOA's governing documents may grant it additional powers, such as the ability to restrict exterior paint colors to maintain a certain aesthetic standard.

2. Can homeowners associations foreclose on a home in North Carolina?

Yes. HOAs have the right to foreclose on a delinquent member's home if a lien is not paid after 90 days or more. However, it's important to remember that to foreclose on a home, the board of directors must provide consent, and the homeowner in question must be given sufficient notice and an opportunity to settle the outstanding debt.

3. What is property management software, and how can it help me with my HOA?

Property management software is a set of tools designed to help with your day-to-day operations. It can automate a number of tasks to help you manage work orders, collect and track the payment of dues, communicate with vendors, staff, and members, and prepare financial records.

In addition, HOA administration software improves openness, makes it easier for board members to communicate with residents, and makes sure that rules are followed. It makes managing budgets and costs easier by streamlining financial tracking and reporting.

Ultimately, it benefits both homeowners and board members by saving time, reducing paperwork, and improving a HOA's general structure and functionality.

4. Can an HOA enter a homeowner's private property?

Unless otherwise specified in the governing agreements, a community association does not have a legal right to access a member's property. An HOA may be permitted to access a homeowner's home for upkeep of common features, such as plumbing, under the terms of the HOA governing documents.

Free Downloads


David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!