NC Planned Community Act

A good way to find out how communities within North Carolina handle fines is do a google search for homeowner associations in North Carolina. Make sure you pick the right type of HOA, condo or PUD. Then look for that associations rules and regulations.

Actually, NC § 47F-3-102 specifies that "Unless the articles of incorporation or the declaration expressly provides to the contrary, the association may: (12) After notice and an opportunity to be heard, impose reasonable fines or suspend privileges or services provided by the association (except rights of access to lots) for reasonable periods for violations of the declaration, bylaws, and rules and regulations of the association;"

Lately, some courts are taking a stricter interpretation of the CC&Rs and applying standard contract law to that document. What this basically means is that if the document is silent on an issue (creating rules & regulations for example) then this shows intent not to grant such authority.

In Virginia, the cases that reference this interpretation actually not only dealt with rules and regulations but the authority to impose fines. These cases are:

Unit Owners Ass'n of Buildamerica v. Gillman
Fairfax County Redevelopment and Housing Authority v. Shadowood Condominium Association, et al.
I've attached the Samir R. Farran, et al. v. Olde Belhaven Towne Owners Association ruling (as my link doesn't appear to work anymore). I also had to split the ruling into two parts to meet the forums size limit (200K) for attachments

The key argument in all of those cases is that the Association exceeded it's authority (aka ultra vires)

Since Association authority actually comes from the CC&Rs and since neither the Articles of Incorporation nor the Bylaws may be in conflict with the CC&Rs, having the authority to create rules and regulations in those documents, may be interpreted by the courts as actually being in conflict. Due to this interpretation, and again referencing Virginia, many legislatures are adopting statutes that grant such authority to the Association (as the CC&Rs may not be in conflict with State statutes).

Also See:

Due Process Changes in Virginia

Thank you for so much research and information. Since our CCR's "do not expressly provide to the contrary" because they are "silent" on the issue of fines it appears that we cannot impose fines based on this paragraph in the NC Planned Community Act. Assuming the Act's provision is not applicable to us, and our covenants are silent on the issue of fines, will this restrict our Architectural Review Committee's ability to impose fines for violations of those guidelines as well?

We just found a NC Supreme Court ruling on this very subject http://www.ccfj.net/courtdecNCnofines.html and unfortunately it is not the outcome we were hoping for.

NP,

the argument, as I pointed out, is does the document being silent intend to prohibit (as the court said prior to VA enacting their law).

Yes, but that's only because the HOA was formed before the Act became law in 1999. And that's the situation in the NC court case.

What we don't know is whether the OP's HOA was formed before or after 1.1.99 - which is the dividing line on what version of the law applies.

Then unfortunately you can't collect fines if you didn't change your docs.

I agree. And thank you to all for sharing your opinions, knowledge, and time.

Equity involves a NON-financial remedy. Fines are financial remedies.

Can't speak to specifics of NC law, but wouldn't rely on equity to resolve any question about fines.

Hope that helps.

Action at Law:

a judicial proceeding brought by one party against another; one party prosecutes another for a wrong done or for protection of a right or for prevention of a wrong

Action in Equity:

Action in Equity is a proceeding in court of equity that seeks equitable relief, such as an injunction or specific performance, as opposed to damages. Action in equity is also called, ‘action at equity’

Axtion at law or in equity:

An action at law is an action typically for money damages such as a tort (personal injury or medical malpractice action) or breach of contract action. An action in equity seeks a remedy when there is no available remedy at law. For instance, if money damages will not suffice. An example of an equitable action is specific performance in a sale of property or a house. In this action, the plaintiff will ask the court to make the owner go through with the purchase because houses or property are unique.

Last update.

We received confirmation from our legal council that despite no mention of fines in our CCRs, the fact that it does not expressively disallow it, combined with the recent additions (2004, 2005, and 2011) modifications to NC 47F Sec 103-2 means that we can fine in accordance to our specified notification AND the NC Planned community acts rules when it comes to enforcement.

Appreciate the conversation and information here!

VA allows it. $10.00 daily not to exceed $900.00 for the violations after notice, hearing etc.