Homeowner associations warn: Bill would raise dues for thousands
Thousands of Lake Norman residents who are members of homeowner and condominium associations could see their association fees increase if lawmakers approve a proposal in the N.C. House, according to some area homeowner association leaders and a large Charlotte management company.
“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 the Charlotte region.
Those 250 associations represent 40,000 people in Charlotte alone, Hicks said.
Rep. Beverly Earle, a Charlotte Democrat, is one of four primary sponsors of the legislation, which is 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 Herald Weekly reporter.
The bill has been assigned to subcommittee A on the House Judiciary Committee. Rep. Ric Killian, who represents Ballantyne and other parts of south Charlotte, sits on that subcommittee and said he’s already hearing from south Charlotte association leaders concerned about the bill’s implications.
But the committee has not discussed the bill, and Killian said this week that he doesn’t know enough about it to comment yet.
In an email, Jim Duke, president of the Peninsula Property Owners Association in Cornelius, wrote, “I am quite concerned about the effect of the unnecessarily burdensome administrative provisions as related to meetings of the boards of directors and committees, as well as the requirement to provide literally dozens of pages of documentation to owners wishing to sell their homes.
“Homeowners associations struggle each year to get volunteers to serve as directors and committee members. They also try very hard to keep administrative expenses to a bare minimum, so as not to place additional financial burdens on their homeowner members. These proposed amendments will only exacerbate these problems.
“We are urging state legislators to carefully consider the unnecessary administrative and cost burdens that many of the amendments will place on homeowners’ associations and their volunteer board members and to vote in opposition to the House Bill 165 should it reach the House floor.”
Tim Sellers, a Charlotte attorney who represents Hawthorne properties, including Piper Glen in south Charlotte and The Peninsula in Cornelius, has written a warning letter to all associations he represents.
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.”
• Require 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.”
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.