N.C. Senate Unanimously Passes New Restrictions on HOAs, Bill Heads to the House

Legislation strengthens homeowners’ protections

Yesterday, the North Carolina Senate passed SB 378 HOA Revisions in a unanimous 47-0 vote. Over the last several years, homeowner associations in North Carolina have made headlines for seizing homes under dubious circumstances, and in 2023, a national survey found that Raleigh had the worst HOAs in the nation. This legislation is the result of years of effort to improve regulations to protect homeowners while balancing the HOA’s obligations to the neighborhood.

What the legislation does:

• Limits the power of a condominium unit owners association power to: contract with managing agents, regulate parking on public streets, imposes fines for offering lessons to fewer five people on a member’s property, charge a fee for preparing documents related to title transfer, and charge members fees for copies of the associations records.

• The bill requires associations to provide fair procedures for deciding architectural modifications and to issue decisions within 90 days.

• Modify procedures for imposing fines and enforcing delinquencies.

• Gives every member the right to inspect and copy any contract entered into by the association.

• Requires associations to maintain and make available to their own members records relating to the use of automatic license plate readers.

• Requires prelitigation mediation in certain disputes, unless all parties waive this requirement.

• Requires that the N.C. Department of Justice receive complaints about associations and issue annual reports to the General Assembly on this topic.

• Finally, it places conditions on the use of automatic license plate readers in planned communities.

Why this matters

The cumulative effect of the bill is to strengthen homeowners’ ability to have their voice heard in their association and prevent some of the abuses that have been occurring in recent years. This bill received unanimous support in the Senate and will likely pass the House given its strong showing in the Senate.