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Rules proposed for HOAs would not be cure-all

RALEIGH — The stories aren’t that uncommon.

A homeowner makes an improvement to a home only to receive notification that he or she is in violation of a neighborhood covenant. The dispute between homeowner and homeowners association ends up in court. The lawyers walk away with the money.

Occasionally, the abuses are more outrageous.

In Granville County, a homeowners association management company began foreclosure proceedings against a homeowner over assessments and dues of less than $500, and the fees weren’t even late. The homeowner tried to pay the bill several times, but her check was returned.

Fights over flags in yards, or association board members who hold their neighbors to higher covenant standards than themselves, also make the list of homeowners association horror stories.

Disputes involving homeowners associations are on the rise because North Carolina is a growing state. More and more people are moving into subdivisions governed by neighborhood covenants enforced by homeowners association boards.

About 18,000 homeowners associations now exist in the state.

The associations act as mini-local governments enforcing super-zoning.

Hearing the rising chorus of complaints, some state legislators want to impose some government-like transparency rules on the groups.

For two years, a study committee of seven state House members has been looking into ways to give homeowners more protections when it comes to their dealings with homeowners associations.

The group recently made recommendations that will now be considered by the full General Assembly.

The issues raised by these disputes cut across party lines. One of the most vocal critics of homeowners association-related abuses has been Rep. George Cleveland, a Jacksonville Republican and one of the most conservative members of the House.

So, legislation of some type will likely pass the legislature this year.

The study committee’s recommendations would provide more protections for homeowner by requiring that no liens lead to foreclosure unless assessments have gone unpaid for at least 90 days. Homeowners would also be allowed to pay late assessments in installments and must be mailed a copy of an offer to make the late payments.

Homeowners would be given more power to force homeowner association boards to meet openly and remove board members who fail to abide by the law or association bylaws. Associations’ financial records would also be open to review.

The catch is that state lawmakers can’t force these rules down the throats of existing homeowners associations if current contracts and covenants call for something different. The regulations, if they become law, would only apply in total to new homeowners associations or those that agree to accept them.

More troubling is that the changes would do little to encourage homeowners and homeowner associations to settle disputes without turning to lawyers and the courts.

We may live in a litigious society, but when lawyers get involved resolving these disputes three things happen: association dues and assessments rise, costing everyone in the neighborhood; individual homeowners who are wronged don’t get real justice because they’re left paying expensive attorney fees; and neighbors become enemies.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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