Tips for Property Owners’ Associations

Property owners’ associations (POAs) play a vital role in managing and maintaining communities, but they also face various legal and operational challenges. Maintaining proper records, complying with legal obligations, and ensuring clear communication between the board of directors and the association’s members are key to avoiding disputes and running a successful community association. Below are some essential tips to help your POA operate smoothly and in compliance with North Carolina law.

1. Maintain Regular Communication with Members

Clear and frequent communication between the board of directors and the members of the association is essential for avoiding misunderstandings and disputes. Many issues arise when members are not kept informed about the board’s decisions and actions. To promote transparency:

• Consider sending minutes from board meetings to members via email.
• Post important updates and meeting minutes on the association’s website to ensure accessibility.

2. Keep Accurate Minutes and Records

Maintaining association minutes and financial records in an organized and accessible manner is critical for ensuring smooth transitions between different boards. Proper record-keeping helps future boards understand past actions and ensures continuity in decision-making. Key practices include:

• Keeping a notebook or electronic file of association minutes to preserve accurate records.
• Organizing financial records such as invoices, banking statements, and tax documents for easy reference by succeeding boards.

3. Record Covenant Extensions and Amendments

If your community’s covenants are extended or amended by a vote of the association rather than through a document signed by property owners, it is crucial to contact an attorney. The attorney can prepare and record a certificate reflecting the amendment to ensure legal compliance.

4. Track Bylaw Changes

Bylaws are the foundation of how your association operates. Keeping track of bylaw amendments is essential for legal compliance and clarity. Always:

• Note the date when changes to the bylaws are made.
• Retain copies of earlier versions of the bylaws for reference in case of future disputes.

5. Follow Meeting Notification Requirements

It’s essential to comply with North Carolina laws and your association’s bylaws regarding advance notice for meetings. Proper notification helps ensure that members are informed and can participate in important decisions.

6. Ensure Proxy Forms Are Legally Compliant

Proxy voting can be an important tool for associations, but it’s crucial that any proxy form complies with your association’s bylaws and North Carolina law. Consult an attorney to review proxy forms before use to ensure they are legally valid.

7. Notify Members of Election Results

After elections for board officers and directors, notify all members of the names and addresses of the newly elected officials within 30 days of the election, as required by North Carolina law.

8. Consult an Attorney Before Filing a Lien for Assessments

Filing a lien for unpaid assessments can be a complex legal process. The North Carolina Planned Community Act contains specific provisions for filing liens, and improperly filing a lien can result in legal consequences. Always consult an attorney before taking this step to ensure compliance and avoid potential liability.

9. Maintain Proper Insurance

If your subdivision is governed by the North Carolina Planned Community Act, your association is required to maintain property insurance on common areas and liability insurance if it is reasonably available. If insurance is not available, the association must notify all property owners in writing. Even if your subdivision is not subject to this Act, it’s still advisable to obtain adequate insurance coverage. An attorney can help you determine the appropriate coverage for your association.

Contact Us for Legal Assistance

If your property owners’ association needs legal guidance on any aspect of its operations, including compliance with state law, filing liens, or amending bylaws, contact the experienced attorneys at Ferikes Bleynat & Cannon. We provide practical legal advice to help community associations operate efficiently and resolve legal issues before they escalate.