AN ACT TO AMEND THE NORTH CAROLINA CONSTITUTION TO PROHIBIT HOMEOWNERS' ASSOCIATIONS FROM FORECLOSING ON REAL PROPERTY FOR UNPAID ASSOCIATION DUES, TO ALLOW HOMEOWNERS' ASSOCIATIONS TO OBTAIN JUDGMENTS FOR PAST-DUE ASSESSMENTS, AND TO ALLOW FOR SETOFF AGAINST STATE INCOME TAX RETURNS FOR PAST-DUE ASSESSMENTS.
Amends Section 2 of Article X of the NC Constitution to provide that homesteads located in planned communities and subject to a lot owners' association established by covenant is protected from forced sale for the nonpayment of a lien assessed by the association. Sets out procedure for putting the constitutional amendment before the voters at the November 3, 2015, general election.
Repeals GS 47F-3-116, Lien for sums due the association; enforcement.
Enacts new GS 47F-3-116.1, Enforcement for sums due the association, providing that assessments that remain unpaid for 90 days or more entitle the association to file an action in the General Court of Justice in the county where the property is located. Further provides that unless the declaration states otherwise, the association is entitled to receive fees, charges, late charges, and other charges imposed pursuant to GS 47F-3-102, 47F-3-107, 47F-3-107.1, and 47F-3-115, as well as any other sums due and payable to the association under the declaration.
Specifies procedure for demand for payment of the assessment, which is required at least 30 days before initiating any legal action. Provides language that the notice must include and specifies the procedures for service of process of the demand, providing it should be made and attempted in accordance with GS 1A-1, Rule 4(j), for service of a copy of a summons and a complaint. Also sets out the processes and procedures that should be followed when actual service is not achieved or in cases where the owner of record is not a natural person. Provides that the association is entitled to recover reasonable attorneys' fees and costs incurred in connection with the collection of any sums due.
Provides that any judgment, decree, or order in any judicial foreclosure or civil action, relating to the collection of assessments, will include an award of costs and reasonable attorneys' fees for the prevailing party.
Provides that any judgment, decree, or order in any civil action for the collection of assessments must include costs and reasonable attorneys' fees for the prevailing party.
Sets out provisions concerning the collection of service, consulting, or administration fees as well as the procedure for agreeing to allow payment of an outstanding balance through installments.
Provides that holders of first mortgages or deeds of trust to other purchasers of a lot after foreclosure of a first mortgage are not liable for assessments to the lot which became due prior to the acquisition of title to the lot.
Amends GS 105A-1, to add planned community owners' associations to the Setoff Debt Collection Act, providing that certain agencies and the Department of Revenue work toward setting off debt owed to such associations.
Amends GS 105A-2, to add planned community owners' associations to the definition of a claimant agency for use in this chapter. Makes conforming changes to GS 105A-3(d).
Enacts GS 105A-8.1, Planned community owner's association notice, hearing, and decision, providing that an association cannot submit a debt for collection under this chapter until it has obtained a judgment for past-due assessments pursuant to GS Chapter 47F, Article 3. Provides notice requirements for collection by setoff as well as requiring notice of right to contest the matter by filing a request for hearing. Provides procedures for administrative review and deadlines for filing a petition for a contested case. Outlines when setoff amounts must be returned to the taxpayer as well as when only part of the amount is to be returned. Adds other provisions concerning the return of setoff amounts.
Amends GS 105A-12, Priorities in claims to setoff, to provide that state agencies and local agencies have priority over planned community owners' associations for collection by setoff. Provides that when there are claims by two or more planned community owners' associations, then priority is based on the date each association registered under GS 105A-3.
© 2021 School of Government The University of North Carolina at Chapel Hill
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