Chapter 47F - North Carolina Planned Community Act supersede existing Bylaws - Meetings?

Good afternoon.

I am an HOA member having served on a very active Board for the past two years. The association has approximately 1300 members. Currently we have a bit of an issue in the community around some spending that was Board approved and quickly created controversy among the members.

Although the Board did listen to input around the spending, they have held to their original position. The members are now seeking a Special Meeting and Vote on the spending under the Bylaws.

The association was formed prior to 1999 and the current bylaws around special meetings state....

“Special meetings of the Members may be called at any time by the president or by the Board of Directors, or upon written notice of the Members who are entitled to cast one-fourth (1/4) of all the votes of the Class A membership.” (lot owners).

Chapter 47F - North Carolina Planned Community Act states that 10% of the voting members can request a special meeting as below.

§ 47F 3 108. Meetings

(a) A meeting of the association shall be held at least once each year. Special meetings of the association may be called by the president, a majority of the executive board, or by lot owners having ten percent (10%), or any lower percentage specified in the bylaws, of the votes in the association.

Does the Chapter 47F - North Carolina Planned Community Act supersede the existing bylaws?

Thank you.

Hi Bruce and welcome to the forum.

Typically State Statute will supersede governing documents. However, many statutes defer control back to the governing documents. Therefore, you need to read the entire statute.

To determine if NC § 47F is applicable to your Association, you need to read § 47F‑1‑102. Once you determine if the statute applies, you then need to look at the section of the statute that is applicable to your issue.

As you pointed out, this section would be § 47F‑3‑108. As you correctly cited, that section only defers to the Bylaws if the Bylaws call for lower than 10%. Since your Bylaws do not, the statute applies.

NOTE: there is another difference than just the percent needed.
Per your Bylaws [emphasis added]:

“Special meetings of the Members may be called at any time by the president or by the Board of Directors, or upon written notice of the Members who are entitled to cast one-fourth (1/4) of all the votes of the Class A membership.” (lot owners).

Per § 47F‑3‑108 [emphasis added]:

"A meeting of the association shall be held at least once each year. Special meetings of the association may be called by the president, a majority of the executive board, or by lot owners having ten percent (10%), or any lower percentage specified in the bylaws, of the votes in the association."

I interpret your bylaws to only require signatures from x% of those class A members in good standing.

I interpret the statute to require signatures from x% of the entire membership.

This might actually require you to gather more signatures.

Example:

100 lots (voting power), 10 lots not in good standing so voting privileges were suspended. Using the 10% from the statute:

Under your Bylaws you would need 9 signatures (100 minus 10 who can't vote, times .1)

Under the Statute you would need 10 signatures (100 times .1)

It's always good to gather as many signatures as possible. This way, if any are thrown out, you still have enough signatures to validate the petition.

Thank you all for your very prompt and careful considered replies. 10% is a whole lot easier than 25%.

Don't rush to judgemtnt.

It is not true that state laws always trump association bylaws. Generally, that is true, but -

1. As Tim said, sometime state laws refer back to your bylaws;

and, what nobody has yet said

2. Sometimes the law states what associations are affected by the law. That is, the law could state it affects only those associations that were formed after a certain date.

Never read just one section of a law. You need to read the whole statute to avoid reading something out of context. There might be a section that states what associations are affected. Also, always read read the "definitions" section, if there is one.

More than likely, the law affects your association. But, to be certain, read the law in its entirety.

Hi Bruce,

We have looked at how this applies to a Association created prior to 1999. From the statute below it states that provision G.S. 47F 3 108 (Meetings) applies.

§ 47F 1 102. Applicability.

(a) This Chapter applies to all planned communities created within this State on or after January 1, 1999, except as otherwise provided in this section.

(b) This Chapter does not apply to a planned community created within this State on or after January 1, 1999:

(1) Which contains no more than 20 lots (including all lots which may be added or created by the exercise of development rights) unless the declaration provides or is amended to provide that this Chapter does apply to that planned community; or
(2) In which all lots are restricted exclusively to nonresidential purposes, unless the declaration provides or is amended to provide that this Chapter does apply to that planned community.

(c) Notwithstanding the provisions of subsection (a) of this section, G.S. 47F 3 102(1) through

(6) and (11) through (17)(Powers of owners' association), G.S. 47F 3 103(f)(Executive board members and officers), G.S. 47F 3 107(a), (b), and (c)(Upkeep of planned community; responsibility and assessments for damages), G.S. 47F 3 107.1 (Procedures for fines and suspension of planned community privileges or services), G.S. 47F 3 108 (Meetings), G.S. 47F 3 115 (Assessments for common expenses), G.S. 47F 3 116 (Lien for assessments), G.S. 47F 3 118 (Association records), and G.S. 47F 3 121 (American and State flags and political sign displays) apply to all planned communities created in this State before January 1, 1999, unless the articles of incorporation or the declaration expressly provides to the contrary, and G.S. 47F 3 120 (Declaration limits on attorneys' fees) applies to all planned communities created in this State before January 1, 1999. These sections apply only with respect to events and circumstances occurring on or after January 1, 1999, and do not invalidate existing provisions of the declaration, bylaws, or plats and plans of those planned communities. G.S. 47F 1 103 (Definitions) also applies to all planned communities created in this State before January 1, 1999, to the extent necessary in construing any of the preceding sections.

(d) Notwithstanding the provisions of subsections (a) and (c) of this section, any planned community created prior to January 1, 1999, may elect to make the provisions of this Chapter applicable to it by amending its declaration to provide that this Chapter shall apply to that planned community. The amendment may be made by affirmative vote or written agreement signed by lot owners of lots to which at least sixty seven percent (67%) of the votes in the association are allocated or any smaller majority the declaration specifies. To the extent the procedures and requirements for amendment in the declaration conflict with the provisions of this subsection, this subsection shall control with respect to any amendment to provide that this Chapter applies to that planned community.

(e) This Chapter does not apply to planned communities or lots located outside this State. (1998 199, s. 1; 2002 112, s. 2; 2004 109, s. 3; 2005 214, s. 1; 2005 422, s. 9; 2006 226, s. 15(a).)

Thanks so much.

Best regards,

Bruce Williams