NC is step closer to law limiting power of HOAs

RALEIGH, N.C. — North Carolina is one step closer to a new law that will limit the power of homeowners associations.

A special state House committee voted in favor of recommendations it would like to see the state adopt and turn into law:

1. If a homeowner asks the HOA for records, the board must make them available within 30 days.

2. If it’s budget time for the HOA and the board wants to raise dues more than 10%, it needs a majority of the homeowners to approve, not just a majority of the board.

3. Homeowners and HOAs have to try mediation before suing the other.

4. If a homeowner owes the HOA money, the board can still get a lien on the property and start foreclosure proceedings, but it has to meet certain criteria first.

“We are treading on what can we do and what is a private contract between the homeowner and the HOA,” N.C. Rep. Frank Iler said.

N.C. Rep. Laura Budd was one of the people on the committee from the Charlotte area. “Within a short runway, I think we’ve done a lot of work and I think we’re headed in the right direction,” she said.

“I’ve witnessed the immense amount of power they have over people and it’s just wrong,” North Carolina Citizens for HOA Reform’s Kevin Jefferson told Action 9′s Jason Stoogenke.

Jefferson says he served on his HOA and supports the proposal.

“When I was sitting on the board, I couldn’t believe that we had the authority to do things that we did,” he said.

Some homeowners would have liked to see the state create a review board, a body they can report their HOA to. The idea has come up, but N.C. Rep. Ya Liu told Stoogenke they aren’t there yet. “Ideally, we wanted to see something like that,” she said. “But at least we are looking at it, collecting enough data to see if we need to create this entity.”

The next step is lawmakers will likely turn the recommendations into a bill and send it to another committee. The earliest they could tackle it is this spring.

VIDEO: Homeowner facing lien and more than $12,000 in fines sues HOA and has been winning