If you serve on the board of a homeowners or condominium association, you probably think of your community as being governed by the North Carolina Planned Community Act or Condominium Act. That’s true, especially for newer associations. But it is only part of the picture.
Most homeowners and condominium associations in North Carolina are also nonprofit corporations. That means they must follow the North Carolina Nonprofit Corporation Act as well.
In fact, North Carolina law requires every planned community created on or after January 1, 1999, with 21 or more lots to be organized as a nonprofit corporation. Most condominium associations are also organized as nonprofit corporations. As a result, changes to the Nonprofit Corporation Act often affect community associations, even when the law never mentions HOAs or condominiums.
That is what recently happened with Session Law 2026-52 (House Bill 517), which was signed by the Governor on July 7, 2026. While the law makes a number of changes to the Nonprofit Corporation Act, one is likely to have the greatest practical impact on most associations.
A New Annual Filing Requirement
Beginning in 2027, North Carolina nonprofit corporations must file an annual report with the Secretary of State. The report is due by November 15 each year.
Until now, North Carolina nonprofit corporations generally have not been required to file annual reports with the Secretary of State.
The annual report will include information about the association, including its registered agent, principal office, principal officers, activities, and certain contact information.
Filing the report should not be difficult. But it is a new legal requirement that boards should not overlook. The filing fee is $18 for an electronic report and $25 for a paper report. An association that becomes delinquent may eventually face administrative dissolution by the Secretary of State.
Because the annual report will require current information about the association’s registered agent and principal office, boards may wish to review that information before filing their first annual report.
Boards should also decide who will be responsible for filing the report. It may be the management company, registered agent, legal counsel, or a board officer. Whatever the process, someone should be responsible for making sure the report is filed each year.
Other Changes Will Have Little Impact
The rest of the law is not likely to change how most associations operate.
The law requires nonprofit corporations organized on or after October 1, 2026, to have at least three directors. This change does not apply to corporations organized before that date. In any event, most community associations already have boards of three, five, or seven directors.
The law also makes several revisions to the statutes governing committees of the board. Most of those changes clarify existing law rather than change it. For example, board committees still may not amend the articles or bylaws, elect or remove directors, fill board vacancies, or approve mergers. The law also makes clear that creating a committee or delegating authority to one does not relieve directors of their legal duties.
Finally, the law updates the rules governing nonprofit mergers and corporate reorganizations. Those changes may affect a small number of associations, but they are unlikely to affect the day-to-day operations of most communities.
What Did Not Change
It is just as important to understand what this law does not change.
The law does not amend the North Carolina Planned Community Act or the North Carolina Condominium Act. As a result, it does not change the rules governing:
- assessments;
- budgets;
- board meetings;
- membership meetings;
- voting;
- proxies;
- architectural review;
- fines;
- collections; or
- foreclosure.
In short, this is not a major change to North Carolina community association law. It is an update to the corporate law that governs most associations.
Takeaways
For most community associations, the practical impact of Session Law 2026-52 is limited.
The biggest change is the new annual reporting requirement. Beginning in 2027, nearly every homeowners association and condominium association organized as a nonprofit corporation will need to file an annual report with the Secretary of State.
Filing the report should be straightforward. Even so, it is another item boards should add to their annual calendar. Taking care of it each year will help keep the association in good standing and avoid unnecessary problems.
As always, boards should consult their association’s attorney if they have questions about how the new law applies to their community.
For those who wish to view the entire law, a copy is available on the North Carolina General Assembly website at House Bill 517.
For questions about the new law or other HOA and condominium concerns in North or South Carolina, contact one of the community association attorneys at Law Firm Carolinas.