NC lawmakers pitch 3 new HOA changes. Do they go far enough for homeowners?
North Carolina lawmakers are considering three bills aimed at giving homeowners more protection from their homeowners associations this year.
Millions of North Carolinians live in HOA-governed communities, where volunteer boards can enforce neighborhood rules, levy fines and, in some cases, pursue foreclosure against homeowners who fail to pay assessments. This year, lawmakers have filed bipartisan bills that would create a statewide HOA complaint system, protect homeowners’ ability to install solar panels and build accessory dwelling units like guest houses, and prevent HOAs from restricting licensed home daycares.
The proposals come as legislators continue grappling with complaints about HOA overreach, transparency and accountability. While none of the bills would dramatically reshape how the associations operate, supporters say they represent a step toward giving homeowners more rights and creating greater oversight.
Rep. Ya Liu, a Wake County Democrat who has spent several years working on HOA legislation, said the proposals stem from a growing number of complaints about having little recourse when disputes arise. Liu said she first became involved in the issue in 2022 after learning about homeowners who lost their properties through HOA foreclosures.
“When I first started working on the issue in 2022, that was because a realtor in my district shared with me his client lost like two homes over HOA foreclosures,” Liu said.
While she said that most associations are run by volunteers and serve their communities well, Liu said lawmakers have repeatedly encountered examples of what homeowners view as overreach, excessive fines and a lack of accountability.
Those concerns have generated bipartisan interest in HOA reform, though translating that into legislation has proven difficult.
“You can look back at all the HOA bills that have been filed over the last couple of decades,” Liu said. “Almost none get passed.”
Still, lawmakers have filed several HOA-related measures this session. Here are three bills that could affect homeowners across North Carolina.
HB 1174: HOA Oversight Act
The bill would direct the North Carolina Department of Justice to create a system for homeowners to submit complaints about homeowners associations.
The department would collect and track complaints and report recurring issues to lawmakers. North Carolina currently has no dedicated agency responsible for overseeing homeowners associations.
Liu said the proposal emerged from a legislative committee after lawmakers learned the Department of Justice already receives HOA-related complaints but does not separately track them and lacks authority to regulate associations.
“We just wanted the DOJ to collect information, create a report and report back to us,” Liu said. “It’s really sort of the first step.”
The bill passed on first reading May 4 and was referred to committee on May 28.
HB 1212: HOA Accessory Limitation Ban
The bill would prohibit homeowners associations from restricting:
- Accessory dwelling units, or ADUs, that comply with local zoning and building rules. ADUs are guest houses, or separate living spaces on the same property as a home.
- Solar panels
- Edible gardens
- Pollinator gardens
Liu said the proposal is intended to give homeowners greater control over their own property while addressing issues such as housing affordability and rising energy costs. She noted that some cities allow ADUs, but homeowners still cannot build them because of HOA restrictions.
The bill passed on first reading May 5 and was referred to committee.
SB 1051: Don’t Zone Out Child Care
The third proposal would prevent homeowners associations from enforcing rules that prohibit licensed family child care homes.
The legislation would also limit certain HOA restrictions related to parking, noise and outdoor play areas when tied to a licensed child care operation. Supporters say the measure could help address child care shortages by making it easier for providers to operate from their homes.
The bill passed on first reading May 4 and was referred to committee on May 5.
Pushback from HOA advocates
Not everyone believes the bills go far enough.
Jeffrey Baldwin, a homeowner advocate who now runs SAFERHOA after successfully challenging an HOA foreclosure effort against his own property, said the most common complaints he hears involve accountability, transparency and foreclosure powers.
Baldwin said HB 1174 may create a place for homeowners to file complaints, but it would not give the state authority to investigate disputes, stop foreclosures or punish associations that violate the law.
“It’s a complaint without enforcement. It’s just paperwork,” Baldwin said.
While he welcomes lawmakers’ attention to HOA issues, Baldwin said the proposals fail to address what he considers the biggest problem facing homeowners: an HOA’s ability to pursue foreclosure without a court hearing.
“Right now it’s like worrying about the color of the curtains while the house is on fire,” Baldwin said. “If lawmakers could only make one change… end non-judicial foreclosures.”
Shira Hedgepeth, a western North Carolina attorney who represents homeowners in HOA disputes, offered a similar assessment.
Hedgepeth said a state complaint system could provide some value to homeowners seeking help with disputes. Still, she questioned whether HB 1174 would provide meaningful relief without stronger enforcement powers. Under the current proposal, she noted, a homeowner could file a complaint with the DOJ while an HOA continues to pursue foreclosure or other legal action.
Hedgepeth was also skeptical of the bills focused on solar panels, gardens, ADUs and home daycares, arguing lawmakers are concentrating on relatively narrow issues while avoiding broader questions about HOA authority.
“None of this goes to the root of the problem,” Hedgepeth said.
Liu acknowledged many homeowners and advocates want broader reforms. She pointed to legislation from last session that would have limited HOA foreclosures tied to fines and added additional safeguards before homeowners could lose their properties. Those efforts stalled.
Liu said she believes lawmakers need to find a better balance between giving HOAs the ability to enforce neighborhood standards and protecting homeowners from excessive penalties, especially foreclosure.
“We shouldn’t take that lightly,” Liu said of foreclosure powers. “Homeownership is so precious. It’s the American dream. We don’t want to take that American dream away so easily.”
