Lesson Learned: What North Carolina Management Companies Should be Thinking About

In a recent post on a South Carolina Supreme Court case from just a few weeks ago I provided a quick breakdown of things that management companies in South Carolina must not do. As always, lessons learned from different jurisdictions can be instructive to neighboring jurisdictions.  North Carolina and South Carolina share many things, including a border.  They also share a similar approach to making sure that the practice of law in each state is limited to only licensed attorneys.

Here are some specific things that the Supreme Court in South Carolina mentioned that constitute the unauthorized practice of law in that state and which management companies in North Carolina would be well-advised to avoid:

  1. Representing homeowners in small claims court
  2. Preparing and recording lien documents such as a claim of lien
  3. Filing judgments in court
  4. Advertising that the management company can provide these or other legal services

North Carolina law limits the practice of law to active members of the North Carolina State Bar and to professional corporations properly registered and qualified as law firms.  As a management company, if your business includes any of the above items it is likely to be considered the unauthorized practice of law in North Carolina as well.  Given this new case, HOA and condominium boards of directors and property managers should always err on the side of caution when it comes to legal action and legal issues.

HOA & Condo Associations