New NC House Bills reforms could take away some powers from HOA communities and give homeowners more protections. While the bills have been gaining attention, they have yet to be passed into law. Still, board members and managers must understand what these bills propose and how they might affect associations should they pass.
What are the NC House Bills Reforms?
The North Carolina legislature has introduced three new bills that will affect homeowners associations in the state: House Bill 1212, House Bill 1174, and Senate Bill 1051. The proposals seek to place more limitations on the powers of HOAs and establish an official complaint process at the state level.
Currently, these bills are still in various stages of the review process, but all have passed the first reading. It remains to be seen whether they will ultimately turn into law. Still, associations would be wise to monitor their progress to keep up with potential changes in community governance and enforcement.
Here’s a breakdown of the new NC House Bills reforms.
House Bill 1212: HOA Accessory Limitation Ban
House Bill 1212 seeks to amend Sections 47C–3–102 and 47F–3–102 of the North Carolina General Statutes. The former affects condo associations, while the latter affects planned communities.
If passed, HB 1212 will essentially prevent associations from restricting three things: solar panels, edible or pollinator gardens, and accessory dwelling units (ADUs). In the case of ADUs, the bill specifically states that they must meet building, environmental, and zoning requirements.
For example, if an HOA has rules that prohibit vegetable gardens in front yards, that restriction would no longer be enforceable if HB 1212 becomes law. Similarly, an HOA can’t simply ban solar panels altogether.
That said, there is an important distinction for condominiums. The bill’s protections for Chapter 47C condominiums would be limited to solar panels.
House Bill 1174: HOA Oversight Act
House Bill 1174 seeks to amend Section 114–8.8 of the North Carolina General Statutes. This bill establishes a process for homeowners to file a complaint with the state.
If passed, the North Carolina Department of Justice would create an online system where association members can submit complaints about their associations. For example, an owner can complain about being barred from inspecting HOA records or from attending board meetings. They can also complain about dues, fines, collection practices, liens, foreclosures, and more.
After receiving the complaint, the DOJ will send it to the HOA and give the board an opportunity to respond. The DOJ will then collect information about these complaints.
That said, the DOJ does not get to decide the outcome in HOA disputes. The DOJ will not act as an arbitrator. It can’t create community rules, nor can it tell associations how to operate. The bill simply establishes a state-level complaint reporting and tracking system.
Notably, if passed, the bill will make some complaint information publicly searchable. Personal information will not be available for privacy reasons, but the HOA and management company’s identities may be included.
Senate Bill 1051: Don’t Zone Out Child Care
Senate Bill 1051 seeks to amend Chapters 110 and 47F of the North Carolina General Statutes. Specifically, the bill affects the following sections: 110–107.25, 110–107.26, 110–107.27, 110–107.28, 110–107.29, 110–107.30, and 47F–3–123.
If passed, SB 1051 will prohibit HOAs from banning licensed family child care homes. If an owner has a valid state license to operate a small daycare from their home, the association can’t implement a rule that prohibits the activity.
Additionally, the HOA can’t fine the owner for operating the child care home or charge an additional fee because of it. The HOA also can’t require owners to obtain the association’s approval before operating a child care home. Retaliation or any other penalties are also prohibited for simply having the daycare.
That said, there is an important exception. The HOA can still enforce ordinary community rules that apply to everyone. For example, if the HOA has a rule that prohibits vehicles from blocking the sidewalk, it could still apply to a child care operator.
In the same way, general rules about noise, parking, exterior changes, and common areas generally remain enforceable. The HOA just can’t create special or more burdensome rules specifically because the owner runs a licensed child care home.
It is important to note that, if passed, this bill will apply retroactively. Even if a daycare restriction has existed for 20 years, this bill would make it unenforceable.
Remedies for Violations of SB 1051
If passed, Senate Bill 1051 would allow the child care operator to sue the association if the latter violates these protections. The homeowner may seek actual damages, attorneys’ fees and legal costs, and a court order requiring the HOA to cease violating the owner’s rights.
Additionally, the Attorney General may take enforcement action. Given the penalties, it is essential to remain up-to-date on these NC House Bill reforms.
Impact of North Carolina Legislative Reforms
If these bills become law, an HOA board can’t simply rely on its existing rules. For example, if an HOA currently prohibits solar panels, vegetable gardens, ADUs, or daycare businesses, those prohibitions will likely become unenforceable.
Of course, that doesn’t necessarily mean that the entire covenant becomes invalid. It means that specific provisions may conflict with the new laws, so the board can no longer enforce them.
If passed, these bills will force board members to revisit their governing documents to ensure compliance. This involves identifying any provisions that clash with any new law. Boards may also need to update their enforcement policies, review architectural guidelines, and train incoming directors or managers.
For example, if HB 1212 becomes law, a manager should not send a violation letter simply because an owner installed permitted solar panels. Similarly, if SB 1051 becomes law, an HOA should not fine an owner merely for operating a licensed family child care home.
The Importance of an HOA Management Company
Association boards are not always well-equipped to handle NC House Bill reforms. As volunteers, they may not have the background or expertise needed to understand the implications and compliance requirements of new laws. Moreover, many don’t have enough time to devote to the job.
An HOA management company can be highly beneficial to self-managed boards. Professional managers have the proper training and education to meet the demands of community management. Most companies also either have internal legal departments or existing relationships with reputable law firms that can help navigate these new bills.
The Start of a Trend
The planned NC House Bills reforms are still under deliberation, but they signal an oncoming shift in the HOA industry. Even if these bills don’t pass, new ones like them are bound to pop up every few years or so. There is a clear desire to limit HOA powers and provide more stringent protections for homeowners. Board members must keep up.
Cedar Management Group provides effective management services to HOAs and condo associations. Call us today at (877) 252-3327 or email us at help@mycmg.com to get started!
RELATED ARTICLES:
- 5 Steps To Handle HOA Complaints In Your Community
- Alabama HOA Records: Homeowner’s Right To Access
- 5 Beginner Tips To Follow When Installing A Flower Garden
