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This was an active year for community association law in North Carolina. House Bill 331 revised both N.C. Gen. Stat. § 47C-3-116 (North Carolina Condominium Act) and 47F-3-116 (North Carolina Planned Community Act), giving us significant clarification to the assessment collection process. The new laws take effect October 1, 2013. You can see the bill here: http://www.ncga.state.nc.us/Sessions/2013/Bills/House/PDF/H331v5.pdf

While the majority of the changes are technical, board members and managers should be aware of several important changes:

1. Clarifies the sums included in the lien to include future accruing assessments.

2. No longer requires the intent to lien letter and claim of lien to be sent to vacant

3. The foreclosure process has been clarified to be more aligned to N.C. Gen. Stat.

4. Requires the appointment of a trustee when a foreclosure is filed. The association’s property or one without a physical address. Chapter 45, which covers bank foreclosures. The associations attorney may act as trustee so long as the foreclosure is uncontested. In the event the owner does contest the foreclosure, a third party neutral trustee will be appointed and the association’s attorney may continue to represent the association.

5. Clarifies the right of the association to bid on the property at the foreclosure sale.

6. The attorney’s fees which the association may collect from the owner in an uncontested foreclosure are still limited to $1,200. However, House Bill 331 now permits the association to include attorney’s fees in an installment payment plan which will no longer be included in that $1,200 limit in the event foreclosure is later filed. This removes the disincentive to allow payment plans due to the fear the association would not be able to collect all the attorney fees incurred if the owner does not pay as agreed and foreclosure is filed.

7. Allows associations to collect assessments from an owner who purchased the property at a foreclosure sale from the date the rights of the parties are fixed after the foreclosure sale rather than the date the trustee’s deed is recorded. This is typically ten days after the sale or the last upset bid. This means the association will no longer be left waiting many months or even years for the new deed to be recorded.

If you have any specific questions about the new provisions please feel free to contact me.

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