The Developer is Offering the Association (a lot of) Money to Sign a Release- Should the Board of Directors Consider Signing it?

Over the last year our firm has seen an uptick in offers to associations from the developer to pay money in exchange for signing a release. The language of releases can vary but the purpose is almost always the same – The money being offered to the association is in exchange for releasing the developer and any other named parties from any and all claims, known or unknown, that the association may have.  These claims being released will almost certainly include claims for construction defects for the association’s amenities but can also include a release for claims related to the … Continue reading

Five Factors a Court Will Likely Consider to Determine Validity and Enforceability of Amendments Recorded by Developers

The 2006 Court of Appeals case of Queens Grant II Horizontal Property Regime vs. Greenwood Development Corporation (368 S.C. 342) provides guidance for validity of amendments to the Declaration/Master Deed (Declaration) recorded by Developers/Declarants (Developer). In this case the homeowner’s association sued the Developer over the validity of an amendment it recorded to the Declaration that increased assessments. The Court upheld the amendment (except for a few units that had a special arrangement that are not relevant to this blog).  The Court used the following general analysis to determine the validity of this amendment recorded by the Declarant:  Please contact … Continue reading

Association Common Area Can Be Foreclosed and Sold to a Third Party for Unpaid Property Tax

Our office has had two situations in the last six months where an association failed to pay property taxes on association common area, the tax department foreclosed, and a third-party bought the common area at the tax foreclosure sale. Fortunately in these cases it was not the association pool or clubhouse, but it could have been. For North Carolina associations – There is a statue in North Carolina that allows associations to apply for a tax exempt status for common area. Once approved the association does not owe property taxes on that common area going forward. The key is to make … Continue reading

Community Associations May Have a Duty to Address Neighbor-to-Neighbor Discrimination

Community associations have historically been able to stay largely uninvolved in neighbor-to-neighbor disputes unless the conduct complained of violated the governing documents of the association. If no governing documents were being violated, the neighbors would be expected to work out the issues among themselves. Now, there is an important step for association boards and managers to consider when learning of neighbor-to-neighbor disputes. The Fair Housing laws may create a duty for community associations to investigate complaints of discrimination between neighbors and to possibly take some action. Note – This duty might exist even if the board of directors and association manager … Continue reading

Tips on Filling Out the Fannie Mae/Freddie Mac Questionnaire

Effective early this year Fannie Mae and Freddie Mac, the two largest purchasers of residential real estate mortgages from lenders, started requiring information regarding the structural integrity and plans for addressing deferred maintenance for almost all condominium buildings. This is in direct response to the tragedy of the partial collapse of the Champlain Towers in Florida. Is the Association legally obligated to complete the questionnaire? Unless the governing documents of the Association require it (which is highly unlikely) the Association is not obligated to complete the questionnaire; however, not filling out the questionnaire will almost certainly result in 60-70% of … Continue reading

What Can Our Homeowners Association Do about Criminal Activity?

After almost twenty years of representing homeowners associations and condominium associations, it continues to surprise me when homeowners look to their association to investigate or even punish for criminal activity that occurs in the community. Our association clients get calls from homeowners insisting that the association take action to prevent car break-ins, vandalism, loitering in public areas, theft, speeding, reckless driving and even marital fights. Just recently we had the membership of an association very upset with the board of director’s lack of action when one homeowner fired four bullets at another homeowner (thankfully missing each time). In most cases … Continue reading

Requirements for South Carolina HOA/Condo Pools for Re-Opening After May 18, 2020

Since the outbreak of the COVID-19 pandemic the community association attorneys at Law Firm Carolinas have been closely monitoring the Executive Orders from the South Carolina Governor, county and city Orders, and the recommendations of the South Carolina Department of Health and Environmental Controls, along with those of the Center for Disease Control. On May 11, 2020 Governor Henry McMaster announced that fitness centers and pools (“Amenities”) may re-open on Monday, May 18, 2020 with certain requirements which are mandated (“Requirements”) and with guidelines that are strongly recommended but not mandated (“Guidelines”). As of the time of this writing there … Continue reading

Pools in Phase 2: Requirements for Reopening NC HOA/Condo Pools

NC Governor Roy Cooper issued Executive Order 141 (“Easing Restrictions on Travel, Business Operations, and Mass Gatherings: Phase 2”) on May 20, 2020  which will allow homeowner and condominium association pools to re-open on Friday, May 22 at 5:00 p.m. However, certain requirements must be in place. The Order imposes mandated “Requirements” that must be followed as well as “Guidelines” that are strongly recommended (but not mandated).  If the directors of an NC community association are discussing opening the association’s pool, the board should, at a minimum, consider the following Steps: STEP 1 – The Governor’s announcement and authorization to … Continue reading

What Your NC & SC Community Should Consider Before Opening Pools Amid COVID-19 Concerns

Many of our association clients are asking whether the board should open the association’s pool in May as originally scheduled, and if so, what additional rules should the board consider in light of the ongoing COVID-19 health concerns. As an initial step the board of directors must confirm whether there are state, county, city, or other municipal restrictions, including health department restrictions, that may prohibit the association’s pool from being open.  If there are, the pool must remain closed.  In the event that no executive order or government regulations require the pool to remain closed there are still portions of … Continue reading

Removal of an Officer vs. Removal of a Board Member of a Community Association

Removal issues are almost always sensitive and highly charged emotional issues. It is important that the board of directors follows the required process correctly and seeks legal guidance when necessary. If your board directors has questions regarding removal of an officer or removal of a board member, please contact one of our community association attorneys here at Law Firm Carolinas. There is often confusion regarding the difference between removal of an officer and removal of a board member in a North Carolina or South Carolina Community Association. In most cases the sitting board of directors has the authority to remove … Continue reading

The HOA Has Foreclosed on a Home for Delinquent Dues, Now What?

What happens when an HOA completes a foreclosure sale of its claim of lien for unpaid dues? There are several common outcomes which are listed below in order of frequency in our experience: (1) The owner/occupants are evicted and the house is left empty. The Association should include this property on its general liability policy in case someone gets hurt on the property.  Eventually, if there is a mortgage on the property (and there is almost always a mortgage) the mortgage company will eventually foreclose and take title from the Association.  It is a common misconception that the Association is … Continue reading

Are Homeowners Associations and Condominium Associations Subject to the Americans With Disabilities Act?

We frequently get asked what special steps must be taken by associations to be compliant with the Americans with Disabilities Act (ADA.) In many cases our association clients are not subject to the ADA but it depends heavily on who they allow to use the common area and amenities.  The most common trigger that makes the ADA apply to associations is when the association’s common area and amenities are used with some degree of frequency by the general public that are not members of the association.  For example, if the association allows nonmembers to use the association’s pool for a … Continue reading

Eminent Domain – Condemnation Yes! The government can take your property over your objections

Most people know the government has the power of eminent domain which is the authority to take private property so long as they pay fair compensation. This is also known as Condemnation Taking, Declaration of Taking, Notice of Taking, and possibly Inverse Condemnation. The process usually starts when you are contacted by an agent of the condemning authority to discuss the real estate involved and to negotiate a sales price. These agents will have an appraisal that was conducted for the condemnor. This appraisal will provide the starting point for negotiations. There is almost always room to increase the offer … Continue reading

HOAs and Condos Protecting Children or Violating Federal Fair Housing Act?

Families with children under the age of eighteen are a protected class under the Federal Fair Housing Act and an alarming number of community associations are unintentionally violating federal law with rules, regulations, policies and practices. Swimming pool rules requiring a parent or guardian to be present at the pool with young children would seem to be the responsible thing to do, but be careful!  One Court has held that a rule requiring a “parent or guardian” to be present was discriminatory because a slightly older child may be adequate. Remember adult swim time at the pool?  Adult swim time … Continue reading

To Foreclose or Not to Foreclose

Should a homeowner association use foreclosure to collect association dues? The power to foreclose for unpaid association dues is a significant option in North Carolina. In many cases it is difficult for association boards and memberships to support using foreclosure without better understanding the importance of associations collecting all funds budgeted. It is important to keep in mind that an overwhelming number of foreclosure actions are dismissed very early in the process because the homeowner pays in full in a lump sum or through a payment plan. Only a small fraction of cases are actually foreclosed. Associations, in almost all … Continue reading