courts and pools, for the benefit of the owners and
enforces the restrictive covenants. A homeowners’
association is usually established when the project
is created. The association will have an elected
executive board which will manage the association
and perform such tasks as enforcing die rules and
regulations and collecting the homeowners' dues.
The developer, however, usually remains in
control of the association until the developer no
longer owns a majority of the units, or no longer lias
the majority of the votes in the association, or until a
predetermined deadline has passed.
Q: Can my homeowners’ dues be increased?
A: Yes. The common expenses of your
development may include grounds' upkeep, building
maintenance, insurance premiums, property taxes
and management lees, among other tilings. When
these expenses go up, the exist is usually passed on
to the property owners in the form of increased dues
and assessments. The legal authority to increase
dues and to assess homeowners is set forth in the
documents which govern the development.
Prior to signing a contract to purchase a
condominium or townhouse, you should examine
the governing documents to determine the amount
of maintenance fees and assessments you will be
obligated to pay and whether they may increase
over time. You should find out who has the authority to
establish fees and assessments, whether there are any
limits on the amount that can be charged, the financial
stability of the association, whether there are sufficient
dues/reserves to pay lor larger expenditures in the
future, whether there are any pending or proposed
assessments of property owners. You are less likely
to be shocked by fee increases if you have read this
information prior to signing a purchase agreement.
Q: Can an owner avoid paying assessments for the
common expense of the property'?
A: No. All owners of condos including the developer
must pay their share of common expenses. The same
would also lie true of townhouse owners if there is a
clear and definite statement in the restrictive covenants
specifying the purpose of the assessment and the
authority of tine homeowners’ association to collect the
assessment.
Q: Can the homeowners’ association tell me what I can
and cannot do on my own property?
A: To some degree. The law allows you great freedom
to tailor the use of your property to your particular
lifestyle. However, this freedom is not unlimited and is
subject to certain restraints. A homeowners’ association,
or the developer, may lie authorized by the declaration
to adopt bylaws or other rules and regulations that may
govern your conduct. This can substantially affect your
ability.' to use your property. It could even restrict your
ability' to rent your unit to others.
Before you purchase a townhouse or condo, you
should carefully read the nties governing the project
and consult your attorney if you have any questions.
0: What should I do if I disagree with the association’s
rules?
A If a dispute arises between you and the association
over any of die association's nifes. it may be nece.ssary
to resolve the matter in court. Just because a provision
appears in the bylaws or rules does not automatically
mean that it is enforceable. But in most cases, a rule will
lie upheld by the courts if it is considered “reasonable.”
Also, you may try' to change the rules. Any
change in die bylaws or rules and regulations of the
homeowners’ association requires approval by the
members of the association or its executive board. Each
homeowner is entitled to vote.
Q: What happens if I do not abide by the restrictive
covenants, bylaws, or rules and regulations?
A In any condominium or townhouse development,
an owner or the association may seek relief in court
against another owner who violates die association's
covenants, bylaws, rules or regulations. In addition,
owners in some condominiums and townhouses may
lie fined by the association in accordance with either
the Planned Community Act ox die Condominium Act
These Acts give associations fining authority over the
owners of condominiums created on or after October
1 , 1986. the owners of townhouses created on or after
January-’ 1, 1999, and owners of older condominiums and
townhouses whose associations have properly subjected
themselves to portions of the applicable Act.
Even if an association has the right to impose a fine,
no fine can lx* imposed until the owner is given notice
of die alleged violation and an opportunity' to defend
against the charge at a hearing before die executive
board of the association or a panel designated by the
board. Once a violation is found and not corrected,
the association may impose a fine up to $100.00 per
day for each day the violation continues. And, if the
owner fails to pay die fine and other charges assessed,
die association can file a lien against the property' of
the offending owner and then sell the unit through a
foreclosure process.
Some problems may not be addressed by the
covenants, bylaws, or rules and regulations. In such
cases, you may have to contact a local law enforcement
official or your own attorney for assistance.
Q : What if I don’t pay my dues, assessments, fines, or
other changes?
A: If an owner fails to pay dues, fines, assessments or
other lawfully imposed charges, the owner's property’ is
subject to foreclosure by the homeowners association
(even if the owner’s property’ is fully paid for).
Q ; Can the homeowners’ association employ a
management company to assist in managing my condo
or townhouse complex?
A: Yes. A homeowners’ association, through its
executive board, will often employ a management
company to take care of maintenance, collect dues
and assessments, and carry’ out odier day-to-day
responsibilities of the homeowners’ association.
The members of the association’s executive board
and the staff of management companies are NOT required
to be licensed by the N.C. Real Estate Commission or any
odier state agency so long as their management activities
do not involve the sale or rental of units. However,
licensed real estate brokers who manage homeowners'
associations must adhere to the N.C. Real Estate License
Law and related rules. This includes keeping the collected
funds of others in a trust account and maintaining records
of all collections and disbursements of these funds.
Q: Can the homeowners’ association do anything about a
developer w'ho is causing problems in the development?
A: If the developer is still in control of the association,
it is unlikely diat the association will lx able to effectively
take action against the developer; however, the individual
homeowners may lx able to take legal action against a
controlling developer. If the developer is not in control,
the association can treat the developer just as it would
any other homeowner.
Scan the code below to access the
Commission Web site from your mobile devices.
THE NORTH CAROLINA
REAL ESTATE COMMISSION
P.O. Box 17100 • Raleigh, NC 27619-7100
Phone:
919/875-3700
• Web Site: www.ncrec.gov
7, 500 copies of this public document were printed
ill
и
cost of $ XXX per copy.
REC 3.31
3/1/16
Questions and Answers on:
CONDOS &
TOWNHOUSES
A publication of the North Carolina Real Estate Commission
