Part I.

Sections 1 and 5

Changes certain powers of the unit owners’ association (Association) under the NC Condominium Act (GS 47C-3-102) or a homeowners’ association (HOA) under the NC Planned Community Act (GS 47F-3-102) as follows.

Now prohibits managing agent or other contractor/employee contracts from exceeding two years in duration or containing an automatic renewal provision that requires the Association/HOA to give notice of nonrenewal more than 60 days prior to the contract’s anniversary date. Provides for termination of automatically renewable contracts upon 90 days' notice by the Association/HOA. Prohibits a managing agent form being compensated based on the amount of fines collected on behalf of the association. Prevents an Association/HOA from enforcing any restriction on parking of newly defined term, personal vehicle, on a public street, public road, or public right-of-way for which the NC Department of Transportation (DOT) or local government has assumed responsibility for maintenance and repairs, unless the Association/HOA has been delegated such enforcement (was, blanket bar on enforcement of parking restrictions on public roads/streets). Authorizes the Association/HOA to enforce such restrictions if the authority to regulate parking has been expressly delegated to the Association/HOA by DOT or the local government. Prevents an Association/HOA from levying a fine for a violation of a provision restricting or prohibiting tutoring, educational lessons, academic lessons, or music lessons (and swimming lessons in GS 47F-3-102) provided in the owner's unit to a group of no more than five people at any one time, regardless of whether compensation is received for such lessons. Authorizes the Association/HOA to impose charges in connection with the preparation of a lender’s questionnaire or certification or a statement of unpaid assessments (was, reasonable charges in connection with the preparation of statements of unpaid assessments), which now must be furnished within 10 days (was, 10 business days) after receipt of the request. Makes conforming changes. Changes the time period triggering the expedited fee from when the request is made within 48 hours of closing to if the item is to be furnished less than 10 days after the receipt of the request. Specifies that charges for the preparation of the lender’s questionnaire or certification must be billed to the requesting party. Allows imposing a reasonable charge for providing copies of records. Requires the Association/HOA to provide a fair, reasonable, and expeditious procedure for making a decision pertaining to a proposed change to a unit or limited common element. Requires that the Association/HOA's decision be in writing, made in good faith, and not be unreasonable, arbitrary, or capricious. Requires that the procedure be set forth in the Association/HOA's governing documents. Provides for timeframe on decision and a procedure for reconsideration of the decision if disapproved by the Association/HOA's executive board.

The provisions related to managing agent compensation apply to contracts between an association and a managing agent entered into on or after January 1, 2026.

Sections 2 and 6

Amends GS 47C-3-107.1 (process for fines collected by an Association) and GS 47F-3-107.1 (same--HOA) to require for a written notice of hearing to be sent to a unit owner not less than 10 days prior to the hearing date to be heard on any charges by the Association/HOA. Requires the executive board or adjudicatory panel, no less than two days before the hearing, to give the unit/lot owner the name of the person whose testimony it intends to offer in support of the charge and any documents, photos, and exhibits it intends to submit in support of the charge. Caps any fines imposed without further hearing on the violation at $2,500 for continuing violations. 

Sections 3 and 7

Amends GS 47C-3-116 (pertaining to liens imposed for sums due to condominium owners’ associations) and GS 47F-3-116 (pertaining to liens imposed by homeowners’ associations in planned communities) to require that a claim of lien securing a debt consisting of fines or fine-related charges (as defined) be filed separately from a claim of lien securing other sums owed to the association and be filed within 90 days after the date the fine was imposed. Requires the unit owners’/homeowners’ association to provide proper notice of delinquent assessment to the unit/lot owner before filing a claim of lien. Sets forth rules related to notice and requires the association to send a statement of the assessment amount via electronic mail, in addition to first class mail, if the owner has designated an email address; makes conforming changes. Extinguishes a lien securing a debt consisting of fines or fine-related charges unless proceedings to enforce the lien are instituted within one year after the filing of the claim of lien in the office of the clerk of superior court.

Amends the provisions concerning the recovery of attorney’s fees, to allow the court, in its discretion, to allow the association to recover the reasonable attorneys’ fees and costs incurred in connection with collecting any sums due.

Limits when the association may foreclose a claim of a lien securing a debt for sums due to the association so that it is only sums other than fines or fine-related charges, and requires that the delinquency have continued for 180 (was, 90) days or more.

Expands upon the notice requirements in nonjudicial power of sale foreclosures of a claim of lien so that it references the owners’ right of redemption and so that it includes the association’s certification of the actions it has taken to give the owner notice of delinquent assessments. Requires the clerk to inquire as to whether the owner occupies the unit as their principal residence and, if so, about the efforts that have been made to resolve the matter voluntarily. Sets out conditions under which the clerk must order the hearing continued.

Provides that a claim of lien securing a debt consisting of fines or fine-related charges may only be enforced by the filing of a civil action seeking a judgment. Under GS 47F-3-116, also adds that if before a hearing held pursuant to such a civil action, the lot owner satisfies the debt giving rise to the civil action, the association must dismiss the civil action and cancel the claim of lien; specifies that the lot owner has all rights granted under Article 4 of GS Chapter 45 to ensure the association's satisfaction of the claim of lien, and the association is not entitled to the collection or award of any attorneys' fees or court costs related to the dismissed civil action or cancelled claim of lien.

Applies to claims of lien filed and instruments presented for registration on or after December 1, 2025.

Sections 4 and 8

Amends GS 47C-3-118 (condo association records) and GS 47F-3-118 (HOA records) to authorize a property owner or their authorized agent to inspect and copy, at a reasonable time and location specified by the association/HOA, any contract entered into by the association if the owner gives the association/HOA written notice of the demand at least five business days prior to the date on which the owner wishes to inspect and copy. Allows for reasonable attorneys’ fees and costs to the prevailing party if a motion to compel such records is filed. Also allows the court to order the association to pay an owner's costs incurred in obtaining an order when the association doesn't allow the owner to inspect and copy the requested contract and the court later enters an order compelling the association to do so. Requires that the statement, provided upon request, setting forth the amount of unpaid assessments and other charges be furnished within 10 days (was, 10 business days) after receiving the request; allows charging an additional expedited fee for the statement when it is requested to be furnished less than 10 days after receipt of the request (was, when the request is made within 48 hours of closing). Adds the requirement that the association keep written records of any policy on automatic license plate reader systems adopted under new GS 20-183.33 (described below) and for the records to be made reasonably available for examination by owners and their authorized agents.

Part II.

Section 9

Amends GS 7A-38.3F, which concerns prelitigation mediation of condominium and owners’ association disputes, by exempting from the statute disputes related solely to a member’s failure to timely pay an association assessment or any fines or fees associated with the levying or collection of an association assessment. Allows the parties to a dispute arising under GS Chapter 47C (North Carolina Condominium Act), GS Chapter 47F (North Carolina Planned Community Act), or an association's declaration, bylaws, or rules and regulations to agree to mediation at any time (was, parties were encouraged to initiate mediation before filing a civil action). Requires instead that before filing a civil action a party initiate mediation. Requires if an action is initiated that it be dismissed, upon motion prior to trial, without prejudice unless one of the three conditions exist, including that the court finds good cause for a failure to attempt mediation. Allows parties to agree to waive mediation by informing the mediator in writing. Sets out when a mediator may charge a reasonable fee to prepare a mediator’s certification. Amends the content of the mediator’s certification to require that it also include the results of the mediation, and if applicable, that the parties waived mediation, and if a party failed or refused without good cause to attend or participate in mediation. Allows the Supreme Court to adopt rules and standards to implement this statute. Makes additional conforming, clarifying, and technical changes. Applies to actions filed on or after October 1, 2026.

Part III.

Section 10

Enacts new GS 114-8.8 requiring the Department of Justice (DOJ) to receive and record data from all complaints and concerning disputes between unit/lot owner associations and their members. Allows complaints to be submitted via phone, mail, or online; sets out the information that DOJ must collect when it receives a complaint. Requires DOJ to provide a copy of the complaint to the party complained against and to allow them to respond. Requires DOJ to post the following on its website: (1) information on the process to submit complaints; (2) information about the laws and documents governing associations of unit and lot owners; (3) general information about roles, rights, and responsibilities of associations of unit owners and lot owners, their members, and other related parties; and (4) any other information DOJ deems relevant to understanding the rights and obligations of associations of unit owners and lot owners and members of such associations. Prohibits DOJ from (1) promulgating regulations or issuing guidelines concerning the administration, governance, or governing documents of associations of unit owners or lot owners and from (2) serving as an arbiter in disputes between an association of unit owners or lot owners and its members. Requires DOJ to submit an annual report to the specified NCGA committees and division and publish the report on its website; sets out what must be included in the report and how the information must be accessible. Allows DOJ to redact certain information. Effective July 1, 2025.

Part IV.

Section 11

Enacts new GS 20-183.32B prohibiting an owner’s or unit owner’s association form operating an automatic license plate reader system without first: (1) notifying a local law enforcement agency of the association's intent to begin using the system at least 30 days before the system is operational; (2) providing a local law enforcement agency ongoing access to the system; (3) notifying all lot or unit owners of the association's intent to begin using the system at least 30 days before the system is operational; and (4) adopting a written policy governing the system's use before the automatic license plate reader system is operational (sets out seven issues that must be addressed in the policy, including specified data retention, training of system operators, and system security and access). Requires data obtained by the association to be accessed, disclosed, preserved, or retained only for the purposes of assisting law enforcement agencies in connection with a law enforcement purpose; it cannot be used to enforce traffic violations. Effective October 1, 2025.