Pending bills would regulate HOAs
comments
Wednesday, May. 22, 2013

Pending bills would regulate HOAs

  • Regulating Homeowners Associations Here’s an overview of the bills lawmakers in the North Carolina Legislature are considering, which are in various stages of the legislative process: •  H278: Emphasizes that HOAs should seek mediation before litigation with a homeowner. H331: Would allow an HOA board to bid on a resident’s home in a foreclosure auction if the resident and board couldn’t reach an agreement about an infraction. •  H793: Requires that some HOAs maintain fidelity bonds.

Charlotte residents would be better protected from homeowners associations if the General Assembly passes several key pieces of legislation, lawmakers said last week.

The N.C. House of Representatives is reviewing several bills that address everything from state courses for new HOA board members to requiring that property managers get their real estate license.

N.C. representative Rodney Moore, (District 99, D.), who is a primary sponsor on House Bills 883 and 175, said the bills will address those homeowners associations that have “gotten out of hand.” His bills would not let an HOA foreclose on a home and would require HOA training for new board members.

Moore has faced HOA issues in his personal life. He described how the homeowners board for his neighborhood, Seven Oaks in the University City area, started foreclosure proceedings because it thought he had not paid $50 in dues. It turned out they were mistaken, he said.

“It’s unreasonable for someone to foreclose on a $200,000-plus home for just $50. That’s just crazy,” said Moore. “I think it’s just over the top that they have the power to foreclose easier than a government entity or a private lender.”

Representative Kelly Alexander , (District 107, D.), said the bills were driven by constituent feedback.

“You’ve got a number of legislators that are taking notice of what citizens are saying as opposed to taking notice of what lobbyists for organized groups are saying,” he said.

Moore said that average residents are some of the most unrepresented groups in government because they’re the only ones who don’t have a lobbyist group.

But that may be changing, he said.

“It’s a very slow process as you may imagine because some people are very comfortable with the status quo,” he said. “But you’ve got some people who are very adamant about wanting change.”

Some residents in south Charlotte said they welcomed passage of some of the HOA-related bills.

Jim Martin, former HOA president of Providence Country Club, said it would be “beneficial” to require board members to learn HOA-related statutes.

He noted that his neighborhood already provides educational classes to new members.

But Martin added that even with the training, board members would be prudent to seek legal counsel as well.

“You can’t be experts,” said Martin. “You’re homeowners. You’re not experts in the law.”

Ballantyne resident Jane Jordan said that while she is encouraged by the new bills, she also said there are forces in the General Assembly who still seem to favor HOAs over individual residents.

Calling it the “devil’s advocate,” Jordan pointed to pending House Bill 331, which would allow an HOA board to bid on a resident’s home in a foreclosure auction if the resident and board couldn’t reach an agreement about an infraction.

“We need bills that protect the rights of all residents equally,” she said.

But others said they were concerned that the increased oversight of HOAs would deter people from volunteering to serve.

Kensington resident Liz Payerle said it’s hard enough to get people to sign up.

Payerle, who serves on the neighborhood’s architectural committee, said potential disagreements with neighbors discourage some residents from volunteering.

“It can be very uncomfortable because you are neighbors and friends and yet when they want something done to their house, they have to get it approved by you,” she said. “And regardless of what happens, you still have to be neighbors with these people at the end of the day.”

Payerle said the Legislature shouldn’t put up additional barriers to residents who are willing to volunteer.

Moore acknowledged while there may be an adjustment period, ultimately the bills would make for happier neighborhoods and friendlier relationships.

“Right now (HOAs) are a divider for communities because you’re pitting neighbor against neighbor,” he said. “These were never meant to be mini-governments. They were meant to be for the betterment of the community.”

Arriero: 704-804-2637; On Twitter: @earriero

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

  Read more