Home Southeast North Carolina Proposal for more oversight of homeowner associations expected in April

Proposal for more oversight of homeowner associations expected in April

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(The Center Square) – Deadlines for records requests, membership approval for assessment increases, and restrictions on foreclosures are among several recommended changes for homeowners’ associations up for debate come April.

The Select Committee on Homeowners’ Associations in the House of Representatives on Wednesday unanimously approved a report with recommendations and draft legislation for the upcoming short session to address a raft of concerns from homeowners vetted through a series of recent hearings.

Wednesday’s vote came without discussion or debate, though the committee chaired by Brunswick County Republican Rep. Frank Iler discussed the five recommendations earlier this month.

They include a 30-day deadline for an association to respond to records requests aimed at addressing public complaints about delays, with specifications an association “is not obligated to produce financial records … created more than three years before the date of the member’s request,” according to the report.

Committee members also suggest giving homeowners more control over assessments by requiring a majority of all members ratify proposed budgets that increase assessments by more than 10% from the prior year. As some complaints centered on assessments applied after a budget is ratified, the committee further recommends the same approval for board action that would increase assessments by more than 5% once a budget is in place.

Bill Patterson, staff attorney for the Legislative Analysis Division, said at a prior meeting that change would essentially flip the current process that allows budget increases unless a majority oppose.

To address public complaints about associations that have placed liens on homes or attempted to seize them for failure to pay assessments, a third recommendation would impose limits on nonjudicial foreclosures.

The recommended change would prohibit nonjudicial foreclosure for unpaid assessments unless “the lien is equal to or greater than six months of assessments or $2,500, whichever is less,” the association offered the owner an opportunity to make payments, and the owner refused, according to the committee report.

A fourth recommendation would require mediation between associations and members before civil action in other types of disputes, while the fifth would task the Department of Justice with tracking and reporting on complaints to the General Assembly and the department’s website.

Lawmakers on Wednesday stressed the draft legislation, which has not yet been introduced, could change as it moves through the Legislature later this spring. The short session is slated to convene on April 24 and run through July 31.

Iler said previously he’s pushing to create a standing subcommittee under the House Commerce Committee to continue to respond to homeowners’ association issues documented by the Department of Justice.

“Once we get the data back, we can see what else is there,” he said earlier this month. “The volume will go up, and we’ll find out what types.”

The Center Square was unsuccessful prior to publication in obtaining comment with Weldon Jones, the lobbyist for the Community Associations Institute that represents homeowners’ associations.

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