HOA Required Meeting with Buyer

We live in NC.

We are in the process of selling our townhouse, which we have owned for more than 15 years. At the last meeting, the HOA proposed that they would like to consider "requiring" a meeting with the buyer prior to the close of the sale. We are opposed to this for a variety of reasons. We understand the spirit and intent of what they are wanting to do, which is why I have recommended they do a welcome packet and bake the new homeowner a pie - but I digress.

There was a thread on this same question, but it's more than about four years old, and I like to keep information a little more current.

First, is this even legal to require prior to the sale of a home, which is a private transaction?

Second, I would imagine that having a meeting with someone prior to closing, if anything from that meeting resulted in the buyer walking away from the meeting, could potentially open the HOA up for a lawsuit?

Any help specific to NC would be appreciated. We have had a lot of issues of late, which is partially why we are selling. It was a great first home when we first got married. Then we moved to something larger, but the market crashed so we had to use it as a rental for a long time until the market recovered. We were very fortunate to have some amazing renters, but the HOA took a turn in the last five years and they have been seriously overreaching, and we consulted an attorney about a year ago related to some changes they were making relevant to not allowing renters at all and some sketchy "approval" processes that I felt like bordered on violating the fair labor standards - or at the very least opened the HOA up for a lawsuit.

We just want out. This new addition is the last thing we want to deal with, as I feel it would be very off-putting for potential buyers.

I agree with you that if the HOA says something not legally allowed, and the deal falls through, the HOA may be liable for this, under say "clouding title" or "tortious interference with a contract."

I agree with CathyA3 that the HOA is permitted to do only what North Carolina laws require by way of disclosure. It appears to me that North Carolina statute 47E-4 may apply. If so, it appears the statute requires the seller to provide the buyer a "an owners' association and mandatory covenants disclosure statement." The disclosure looks to me to require certain input from the HOA. Your realtor should know more.

I see nothing in North Carolina law that lets a board require a meeting between a potential buyer and the HOA Board.

I'd consult my realtor. If the realtor agrees with the above, then I would draft a short letter saying something like the following:

Dear Board of Directors,

My spouse and I decline scheduling a meeting between the HOA Board and the buyers with whom our unit is under contract. Under the supervision of a licensed real estate agent, we will of course be complying with all disclosures required under the law. If you have any questions, please call our agent or us.

Thank you,

John and Jane Smith
Owners, Unit ___
___, North Carolina ___
Phone:
Email:

Real Estate Agent name and phone number:

Jennifer wrote: "the HOA proposed that they would like to consider 'requiring' a meeting with the buyer prior to the close of the sale." One hopes they've checked with their HOA attorney by now for advice.

For now, there seems to be no such rule with this intrusive requirement, so keep some version of Augustin's letter on ice. I don't know the statutes in NC or the bylaws of this HOA, but it could be the Board would have to propose this new rule, send it our for owners' comments or who knows? It's possible that it'll just go on next month's agenda and get approved by the Board?? And that's all that's needed? Kelly of NC might chime in with some insights.

It is not the HOA's responsibility or scope. I'd tell them to stay in their lane.

Many states prohibit an unreasonable Restraint on Alienation. Unless interviews with potential buyers are allowed by your CC&Rs, requiring such an interview may be just that. The association can't just make stuff up and subject sellers and buyers to restrictions not mentioned in the CC&Rs. Tortious interference is also a claim you might be able to make.

Absolutely, JZ2. The restrictions have to be reasonable and, as you point out, there is a lot of case law to consider. And NC isn't Florida (where is?) but restraint on alienation isn't just a concept in Florida. It may very well be interpreted in wildly different ways on a state-by-state basis.