North Carolina HB 444: Homeowners Association Reform Bill.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 3
HOUSE BILL 444
Committee Substitute Favorable 4/17/25
Committee Substitute #2 Favorable 5/6/25

Short Title: Homeowners Association Reform Bill. (Public)
Sponsors:
Referred to:
March 20, 2025
*H444-v-3*
A BILL TO BE ENTITLED 1
AN ACT TO MAKE VARIOUS CHANGES TO THE LAWS GOVERNING UNIT OWNERS' 2
ASSOCIATIONS AND LOT OWNERS' ASSOCIATIONS, TO MANDATE 3
PRELITIGATION MEDIATION OF DISPUTES BETWEEN OWNERS' ASSOCIATIONS 4
AND THEIR MEMBERS, AND TO REQUIRE THE DEPARTMENT OF JUSTICE TO 5
COLLECT AND REPORT ON COMPLAINTS SUBMITTED TO IT INVOLVING SUCH 6
DISPUTES. 7
The General Assembly of North Carolina enacts: 8
SECTION 1. Chapter 47C of the General Statutes is amended by adding a new 9
section to read: 10
"§ 47C-2-117.1A. Declaration amendments applicability. 11
Amendments made to the declaration pursuant to G.S. 47C-2-117 shall only affect unit 12
owners whose units are conveyed or transferred after the amendment takes effect. For 13
amendments made while a unit owner owns a unit, the amendment has no effect until the unit is 14
conveyed or transferred to another unit owner. A unit owner takes the unit subject to existing 15
rules in the declaration at the time of conveyance or transfer of the unit." 16
SECTION 2. Chapter 47F of the General Statutes is amended by adding a new 17
section to read: 18
"§ 47F-2-117.1. Declaration amendments applicability. 19
Amendments made to the declaration pursuant to G.S. 47F-2-117 shall only affect lot owners 20
whose lots are conveyed or transferred after the amendment takes effect. For amendments made 21
while a lot owner owns a lot, the amendment has no effect until the lot is conveyed or transferred 22
to another lot owner. A lot owner takes the lot subject to existing rules in the declaration at the 23
time of conveyance or transfer of the lot." 24
SECTION 3. G.S. 47C-3-102(a) reads as rewritten: 25
"§ 47C-3-102. Powers of unit owners' association. 26
(a) Unless the declaration expressly provides to the contrary, the association, even if 27
unincorporated, may do all of the following: 28
... 29
(3) Hire and terminate managing agents and other employees, agents, and 30
independent contractors. A contract between an association and a managing 31
agent shall not have a term exceeding one year and shall not contain an 32
automatic renewal provision that requires the association to give notice of 33
nonrenewal more than 30 days prior to the contract's anniversary date. Any 34
contract with a managing agent that is automatically renewed shall be 35

General Assembly Of North Carolina Session 2025
Page 2 House Bill 444-Third Edition
terminable by the association for any reason upon 60 days' notice. A managing 1
agent shall not be compensated in whole or in part based on the amount of 2
fines collected by the managing agent on behalf of the association and shall 3
not collect from the association or a unit owner any fee in connection with its 4
collection of a fine imposed by the association. 5
... 6
(6) Regulate the use, maintenance, repair, replacement, and modification of 7
common elements.elements; provided, however, that in the absence of an 8
express authorization in the declaration, an association shall not enforce any 9
restriction on parking of a personal vehicle on a public street or public road 10
for which the North Carolina Department of Transportation or local 11
government has assumed responsibility for maintenance and repairs, unless 12
the authority to regulate such parking has been expressly delegated to the 13
association by the Department of Transportation or local government under 14
terms prescribing the manner in which the association may exercise that 15
authority. Any such delegation shall be valid for a period not to exceed five 16
years, at which time the association must reapply to the delegating entity. As 17
used in this subdivision, "personal vehicle" means an automobile with a gross 18
weight of less than 26,001 pounds that is used for personal pleasure, travel, or 19
commuting to and from a place of work, and does not include a motor home 20
or self-propelled recreational vehicle, or an automobile that is otherwise used 21
primarily in connection with any commercial endeavor or business. 22
... 23
(11) Impose charges for late payment of assessments, not to exceed the greater of 24
twenty dollars ($20.00) per month or ten percent (10%) of any assessment 25
installment unpaid and, after notice and an opportunity to be heard, suspend 26
privileges or services provided by the association (except rights of access to 27
lots) during any period that assessments or other amounts due and owing to 28
the association remain unpaid for a period of 30 days or longer, and levy 29
reasonable fines not to exceed one hundred dollars 30
($100.00)(G.S. 47C-3-107.1) for violations of the declaration, bylaws, and 31
rules and regulations of the association. No fine shall be levied for violation 32
of a provision restrict