Union County residents who belong to homeowners associations could see their association fees increase if lawmakers approve a bill currently in the N.C. House.
“If it passes in its present form, I’d say there are two ways it will pretty much guarantee higher expense of every association and, therefore, every member of that association,” said Sam Hicks, of Hawthorne Management, which manages about 250 homeowner and condo associations in Union County and the surrounding region.
Rep. Beverly Earle, a Charlotte Democrat, is one of four primary sponsors of the legislation, House Bill 165. Earle and Rep. Julia Howard, a Republican representing part of Iredell County and another primary sponsor, did not return calls from a Union County Weekly reporter.
But Tim Sellers, a Charlotte attorney who represents Hawthorne properties, has written a warning letter to all associations he represents.
The bill has been assigned to subcommittee A on the House Judiciary Committee.
But the committee has not discussed the bill and there’s no timeframe for when it might come out of committee.
In his letter, Sellers, the attorney, said Hall’s bill would:
• Require a homeowner or condo association to notify all its members of meetings and board actions throughout the year. Hawthorne’s Hicks said the law already requires associations to provide that information and financial statements to any member that asks. But Hall’s bill would require a number of additional mailings to all members, immediately raising association costs, Hicks said.
• Prevent an association from initiating action against a member until his or her dues are delinquent for 90 days. That’s an additional two-month delay for the current rules, and Hicks said the delay will require members who are paying their dues to cover the delinquent members longer.
Collecting from delinquent members “already takes months from start to finish,” Sellers wrote in his letter. “Every month an owner is not paying, the association is in many cases paying for and providing vital services to members such as insurance, water/sewer, landscape maintenance and use of amenities.
“This is not a matter of whether we plant new flowers at the entrance,” Hicks said. “This often is the water bill and insurance for all homes or condominiums in the association.”
• Requires associations offer installment or payment plans to all delinquent members. “Associations collect at varying intervals in order to save on the expense of billing and collecting but also, in many cases, to meet seasonal expense requirements,” Sellers wrote. “If each member is entitled to pay in various, negotiated timelines, then what incentive do others have to pay on the association’s prescribed due dates. It leaves little assurance that the association will be able to pay for the monthly expenses.
“Why would someone who is contemplating paying the full bill pay it if they knew the association was obligated to offer acceptance in installments?”
In the end, Hicks said, the proposed changes “totally take the teeth out” of an association’s ability to enforce its common rules.
“All these additional requirements, once you engage an attorney, now you’ve cost the association even more money. All the other neighbors are helping fund this whole adventure,” Hicks said.
To someone who doesn’t belong to a homeowner or condominium association, the legislation may have the appearance of a consumer-protection law to “make sure HOAs (homeowner associations) don’t have too much authority,” Hicks said.
But the bill will have a much greater affect on thousands of association members across the state, he said. “This would tear apart anyone’s incentive to pay their bills,” Hick said. “It’s huge. It totally inhibits (associations’) ability to collect money to pay their bills.
“… In my 15-plus years in the property management business, this is definitely the most dramatic thing that’s come across. They just haven’t slowed down to think about this thing.”
Local homeowners can get more information about the bill Saturday, April 2, during the Union County Neighborhood Leaders Forum’s Spring Conference. Speakers will update the status of the bill and any any questions from those on hand. The event will take place at Hartis Grove Baptist Church, 4224 Blanchard Circle, in Indian Trail, from 8:30 a.m to 1:30 p.m.
Want to know more about House Bill 165?
You can follow the bill in the General Assembly by going online to www.ncga.state.nc.us/legislation/legislation.html. Click on Bill Look-Up and type in H165.