NC Proposed Legislation Establishing HOA Oversight Division in NC Ag's office

This is very encouraging. I'm going to direct some of my energies to contacting the bill's sponsors and seeing what I can do to help get it passed.

House Bill 311: Community Association Oversight Division

HB 311 was filed on March 8, 2023, by primary sponsors Rep. Frank Iler (R-Brunswick). Other sponsors include Rep. John Autry (D-Mecklenburg), Rep. Carla Cunningham (D-Mecklenburg), Rep. Wesley Harris (D-Mecklenburg), Rep. Pricey Harrison (D-Guilford), and Rep. Frances Jackson (D-Cumberland).

The bill would create a “Community Association Oversight Division” within the North Carolina Attorney General’s Office. This new Division would be “available to assist a homeowner in a community governed by a community association to

determine whether the community association is acting in accordance with all applicable laws set forth in Chapters 47C [NC Planned Community Act], 47F [NC Condominium Act], and 55A [NC Nonprofit Act] of the General Statutes and
remedy any violations the Division determines to have been made by the community association by taking all steps the Division deems necessary, including commencing legal proceedings against the community association.”

The full bill can be found at https://www.ncleg.gov/BillLookUp/2023/H311.

I agree. I think JeanneH3 and her spouse would be particularly effective (articulate, well-argued and succinct) in laying out the need for trying an ombudsman office like that proposed, supporting their position with an overview of their personal experience.

Verified. CAI's 2023 position appears here:

https://advocacy.caionline.org/ombudsmantrend2023/

https://www.caionline.org/Advocacy/Priorities/Ombudsman/Documents/Ombudsman_Report_2022DataMarchUpdate.pdf

Excerpt:

Disputes between a homeowner and an elected community association board are private. State agencies
typically do not have authority to intervene in private disputes. Many ombudsman offices can offer little
recourse to parties complaining about their community association and merely become the repository of
complaints from disgruntled homeowners who disagree with their communities’ established rules,
procedures, neighbors, or boards.

Most often, ombudsman offices serve to create a process for homeowners to file complaints against the
elected board but do not provide the board the ability to file a complaint against a homeowner. Often,
many association complaints are brought by uncooperative homeowners who choose to ignore
community rules and policies. Their actions have a negative impact on the community.

Elected boards should have the ability to use an ombudsman program to enforce community rules. Data
gathered by such programs are unfairly biased against community associations as they are empowered to
represent only one side in any dispute.

Establishing a state ombudsman office also adds complexity to community dispute resolution.
Homeowners associations are democratically elected governing bodies. The adoption of a state
ombudsman program limits local governing bodies and typically adds expense to the process. CAI believes
the focus should be on empowering individuals to solve problems within communities. Mandating a state
commissioned office to investigate complaints restricts the administrative and democratic process
of community associations over issues easily resolved through an association’s governing documents. This
type of outsourcing is not an efficient use of resources.

Homeownership in a community association requires an understanding of a homeowner’s rights and
responsibilities. Residents in many community associations enjoy a range of amenities, common areas,
and rules that serve to protect and enhance the value of their property. However, these benefits
come with responsibilities such as payment of mandatory assessments, adherence to rules, and the ability of
the association to enforce those rules. In most cases, disputes between homeowners and associations
arise from a lack of understanding of these rules and responsibilities.

several states have such laws/rules but typically they are not funded thus no teeth in the act.

Hmm, that may or may not mean this bill will sit in the committee without any action whatsoever until it does (which is what happens to about 80% of the stuff that gets introduced in any legislature, whether it's your city council or Congress). I'd talk with your local representatives anyway - even if this bill goes nowhere, it's good for them to remember the people who put them in their positions and they could benefit from actually listening to them every once in awhile.

Which brings up another thought - if this bill does get a hearing, why not organize some sort of town hall meeting in your community where people can talk about the ups and downs of HOA living and how this law could help, and invite the legislators to show up to listen? Invite other HOAs to attend and they can talk about their issues as well. The legislators might not show up, but they could send an aide who could listen and take the information back to them.

NC does have a specific statute relating to mediation. NCGS § 7A-38.3F(j), Association Duty to Notify, states, in part:
Each association shall, in writing, notify the members of the association each year that they may initiate mediation under this section to try to resolve a dispute with the association. The association shall publish the notice required in this subsection on the association’s Web site.

Given the history of our BOD, I very much doubt the BOD will engage in any mediation since it costs about $500 for the process. It took us months to get the BOD to acknowledge the above referenced statute since there was no evidence it had ever been complied with. The BOD is still not notifying owners, in writing annually, of their right to mediation and while they did finally put it on the web site, it is buried deep with a misleading file title that doesn't refer to mediation. I've thought of having a contest offering $50 to the first owner who can actually find it on the owner portal.

I am not on the board but I'm realizing I may have far more power NOT being on the board at this time. BTW, when people on this forum refer to their bylaws, I'm reminded just how vague ours is. It's almost like a boiler plate bylaws with no specific clauses. Ours has no mention of political activity at all.

And so you have TWO bills to keep track of! Don't be surprised if they end up being combined, assuming they get out of committee and get to the other legislative body, but if you get an effective one that actually passes and is signed into law, hurray.

Not at all surprised about the audit bill going down - politicians always tack on crap on a bill that looks like it'll be signed into law and when they succeed, that's how you end up with idiotic laws that no one knows about. To wit - In my state, the legislature just ended and passed an unnecessary bill on book banning (because it was low-hanging fruit compared to doing the hard stuff like addressing health care disparities or job creation). They did this without any input from teachers, librarians (what do they know anyway?) or the general public, and certainly not the opposing party. Instead they went behind closed doors and did what they do.

I'd like to wager they will fight this bill. How about that $50 you mentioned, lol. they just don't' see it as gaining momentum yet.

This legislation is "dead." It was changed from a proposal to create a new law into a legislative study where a group will report back to legislators in the future.

The area newspaper reported that the main group of homeowners who appear to have influenced the primary sponsor of the bill were investigated by CAI's NC Legislative Action Committee's attorney, TImothy Sellers, and he found that their gripe with their HOA was not legitimately a violation of state law. They were unhappy about an assessment fee the BOD choose to apply and which was accepted by the majority of homeowners. Nothing against state statutes but underscores the importance of who you vote for BOD.

I kept thinking, "Wish I'd known sooner because our situation is a classic example of why that bill was needed and our testimony would have been devastating." Our group has a blog that documents, in detail, every state law our BOD is declining to comply with, what that non-compliance looks like.

I did speak with the LA of one House representative sponsor and she encouraged me to contact the representative personally, that he would want to hear and see the evidence.

how did you determine that? I find it very confusing to determine the status of bills being proposed in NC.

No, not dead. The House Bill was changed to a House Resolution, which was adopted, to create a Special Committee to study HOA issues. I just found and joined a new group called North Carolina Citizens for HOA Reform. Currently on Facebook but they need a web site which is something I can help with. This group is not discouraged by this development noting that there was a Special Committee on HOA issues in 2011-2012 that did result in changes to statutes. It makes sense to me because HB 311 was not the only bill sponsored that specially addressed HOA issues...there are five, if I recall, including one that would put limits on HOA board's power to foreclose.

The North Carolinians in this forum should consider joining North Carolina Citizens for HOA Reform (NCCHOAR) to keep up to speed on NC laws, legislation and lobbying efforts.

On June 27, 2011, the governor signed House Bill 165 into law making changes to the Residential Property Disclosure Act, the Condominium Act and the Planned Community Act after the legislature received the findings and report from the 2011 NC House Select Committee on HOAs.

I don't think it's quite as hopeless as you present it.

The problem you may have is that the developer is still running the show, and as long as that's the case, he may be able to do what he wants.

Have you and your neighbors spoken to the developer about this? Several, actually many of you, need to do this because it's easy to ignore one homeowner (several, actually many of you), need to do this because it's easy to ignore one or two people. You may also need to review your sales contract and HOA documents with an attorney to see if certain promises were made, but aren't being kept, and then decide if all of this warrants a lawsuit. That will take lots of time and money, and there's no guarantee you'll win. Because of the money issue, it would be best for a group of homeowners to pass the hat if a lawsuit is what you want to do - you can always request that you be reimbursed legal expenses if you win your lawsuit.

So, I have a copy of all the filled documents in regards to the HOA. First, the HOA was filed in 2003 with the register of deeds, it went default for 7 years because the developer failed to file the proper documents with the DOR, the DOR was corrected, then the developer has never collected HOA dues, established committees, No tax identification, no state or federal filing when it comes to taxes or anything else, he enforces the HOA when he feels like it. In the HOA documents there is no expiration date or surrender date to the homeowners. It was written only to satisfy the filing with the county permit board so that he could get approval for the subdivision. I had a meeting with the permit board and was told he didn't even file a plat for the subdivision and they went hands off because he sold the lots already and he told them that the homeowners wanted to take over responsibility of the road which is false. The developer is telling the homeowner that the state will take over the road at some point which is also false because i had a conversation with DOT who related they would never take over the road because it doesn't meet the basics. and if you read the HOA documents you will see it only mention planting and irrigation for the subdivision. The homeowners don't care about the HOA being enforced because their land is owner financed with the developer, their homes are financed by bank lenders so they have two mortgages already so he refuses to enforce the HOA dues upon them because he has already told them that there is no HOA, and No he has never filed any documents with the register of deeds to dissolved the HOA. I am planning on filing a lawsuit against the developer, just for the sake of my home which is paid for and I plan on leaving it to my family and if I do nothing like the other homeowners I will be just like them.

suing over what? that he never created an HOA? attached is a 2 pg document about NC HOA roads

good luck you can get the entire ebook from the NC Bar, its kind of hard to find on thier website, but you can call and they will help you.

Not enforcing an HOA rules might not win in NC courts unless you can prove damages. good luck.