ARTICLES

Court Affirms Lot Owners’ Obligation

August 11, 2017
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In an August 1, 2017 decision, Tanglewood Property Owners’ Ass’n v. Isenhour, et al., the North Carolina Court of Appeals affirmed the duty of a property owner that has the right to use an easement in a subdivision to pay for a share of the cost of maintaining the easement. In this case a voluntary property owners’ association created prior to the Planned Community Act was awarded judgment against a lot owner who claimed that he did not use all of the roadway easement in a subdivision and was not a member of the association. The Court’s opinion restated the principle that the obligation to contribute to road maintenance can be calculated on a pro rata (per lot) basis without regard to the combination of…

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Quick Tip – Planned Community Insurance

June 9, 2017
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Associations subject to the Planned Community Act are required to maintain property insurance on the common elements and liability insurance.  If the insurance is not available, the Association is required to give notice of that fact to all lot owners either by hand-delivery or by United States mail. N.C. Gen. Stat. § 47F-3-113.

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Quick Tip – Death or Incapacity of Member Appointing Proxy

May 26, 2017
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The death or incapacity of a member appointing a proxy does not affect the right of the corporation to accept the proxy’s authority, unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.  N.C. Gen. Stat. § 55A-7-24.

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The D.I.Y. Lien – Common Mistakes & Pitfalls: Collecting Assessments

May 25, 2017
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Filing a lien and pursuing a civil action are two options available to associations for collecting unpaid assessments and fines from delinquent lot owners.  It is also critical that you carefully evaluate the costs and benefits to the association before electing to pursue foreclosure.  Many associations attempt to file their own liens without the assistance of an attorney, but because there are very technical statutory requirements involved, many miss the mark.  These mistakes are critical because filing an invalid lien can constitute slander of title for which an association may be sued, in addition to creating a permanent obstacle to collecting the unpaid assessments. Mistake #1: Not waiting long enough before filing the lien. General Statute section 47F-3-116 governs the procedure for placement and enforcement…

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Quick Tip – Association Meeting Member Lists

May 12, 2017
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Incorporated associations must prepare an alphabetical list of the names of its members entitled to notice of a meeting, showing the address and number of votes each member is entitled to cast. N.C. Gen. Stat. § 55A-7-20(a).  The list must be made available for inspection prior to the meeting and during the meeting. N.C. Gen. Stat. § 55A-7-20(b).

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When It All Falls Apart: Disputes with the Declarant

May 11, 2017
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So far in our series we have outlined the general nature of those rights and how long they can last, the requirements of transferring those rights from one person or company to another, and what happens when your declarant’s lender forecloses.  In our last part of the series, we discuss what you can do when disputes arise between the declarant and the owners. An association and its members under the control of the declarant have few options to resist a declarant who is abusing control.  Board members have a fiduciary duty to the association and this fiduciary duty must be met even if it conflicts with the desires of the declarant who appoints board members.  If the board ignores its fiduciary duty and acts improperly,…

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“So Sue Me”: Collecting Assessments

May 11, 2017
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As discussed in our post “‘Lien’ on Me”, we are frequently asked for advice on how to collect unpaid assessments and fines.  While the answer for your specific association depends on the particular facts of each situation, there are some general guidelines that can help your board make decisions regarding collections.  The first option, discuss in our earlier post, is to record a lien against the lot and demand payment from the lot owner.  The second option is a civil action against the lot owner(s) to recover the unpaid account. This option can be especially attractive where one member owns several delinquent lots and each lot would have to be foreclosed separately or where the lot is secured by a mortgage or encumbered by another…

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Transferring Special Declarant Rights

May 4, 2017
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In Part 1 of our series on special declarant rights we explained the general nature of those rights and how long they can last.  Here, in Part 2, we explore the requirements of transferring those rights from one person or company to another. As with most aspects of planned communities, the North Carolina Planned Community Act includes a section regulating the transfer of special declarant rights.  Section 47F-3-104 requires that any transfer of special declarant rights be done by a written instrument reciting the transfer recorded in every county which any portion of the subdivision is located.  Except for the transfer of declarant rights resulting from foreclosure or similar proceedings, the instrument transferring special declarant rights is not effective unless it is signed by the…

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Quick Tip – Free Insurance Guides for Consumers

March 3, 2017
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Did you know that everything you ever needed to know about consumer insurance is available for free from the North Carolina Department of Insurance?  These guides are an invaluable resource for anyone who either owns a home or is thinking about owning a home in North Carolina.  Check out the “Consumer Guide to Homeowner’s Insurance” to get an exhaustive overview of what your policy will and will not cover.

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Recording of Amendments

February 24, 2017
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Amendments to declarations resulting from a membership vote should be properly recorded in the office of the Register of Deeds to give notice of the amendment.  The document should recite: the date of the meeting, the total number of lots subject to the declarations, the number of lots present at the meeting or represented by proxy, and the number of affirmative votes in favor of the amendment to show that the amendment met the requirements of the Planned Community Act and the declarations. It also should be signed by the President and attested by the Secretary of the association.  Preparation of the amendment and proper recording by one of our attorneys is inexpensive, and is the best way to have the amendment properly recorded.

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