NC legislature looks to rein in HOAs (05-14-2025--Hour2)

What's going on. Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT Radio in Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, I daily show prep with all the links, become a patron, go to dpeteclendershow dot com. Make sure you hit the subscribe button. Get every episode for free right to your smartphone or tablet. And again, thank you so much for your support. I want to continue the conversation here about the Homeowners' associations and the legislation that North Carolina is looking to move through. It's already cleared the Senate. One bill, Senate Bill three seventy eight cleared the Senate. There's another bill, House Bill four forty four. That one that one moved through the North Carolina House Commerce Committee and the Senate Judiciary Committee. But these are companion bills. They moved through these committees last week and the target is on hoa's or hoa's as I like to call them, and the bills aim to provide additional protections for homeowners by enhancing transparency, limiting fines, and curbing abusive foreclosure practices. This is according to Brianna Kramer at the Carolina Journal Carolina Journal dot com and the headline on this, I thought was important legislators distraught with their own hoa's seek reforms to protect homeowners. See, when you have people in office that have direct experience with various abuses, then they have a desire to do something about that. Now, whether they're successful or not is a separate question, right, But this is a motivation And much like hoa's where people who have some sort of an interaction either positive or negative, but mostly it's negative, when they have an interaction with the HOA, that then inspires them to get involved and full disclosure. That's what happened to me. Okay, I was not happy with a certain situation. I got involved. That's usually what happens at the HOA level. Which, by the way, it is like, if you look at hoas as elected office, then that's it is the largest class of elected officials in America. Hoas are Do you know how many hoas there are in North Carolina? They're like fourteen thousand of them. And if every HOA has three members at least, then I was told there would be no math. Actually no, But you can see you're like somewhere in the neighborhood of about what forty thousand HOA representatives. It's a huge class of elected officials because they do run for election to the HOA. Now, I will tell you like I am not. I did not run for election. I am not because we don't have an HOA board that is resident controlled. Yet. The legislator's own frustrations with hoas has fueled this drive to make these changes. And State Representative Frank Eiler from Brunswick County, he's a Republican. He says, I have been told by the opposition that of the fourteen thousand homeowners associations in North Carolina that ninety five percent of people are happy with them. Well, if five percent are not, that's seven hundred, so, he says, I hope we can take action for the bad actors, right Like, if I have not heard the argument against this bill from I would assume what builders or property management companies. I don't know, realtors association. I'm not sure who the opposition is against this bill. But how else are you supposed to reign in the bad actors? If you can't address the bad acts? The legislation would cap daily fines at one hundred dollars with a twenty five hundred dollars maximum, so basically you could get fined for the better part of a year and then the fines would stop at twenty five hundred. It would also ban retroactive rule changes, which I feel like, I feel like that's a good idea. You want to create a rule and then go back at somebody like, oh, I wanted to put on a patio roof, and my neighbor didn't like the way it looks, and so they, you know, joined the Architectural Review Committee the ARC as they're called. You join the ARC, and then you go back and change the rules and say, from now on, like everybody's patio has to look like this, and it applies retroactively. You can't do that, I mean, I guess you can. Unless this legislation passes. Then you can't do that because you could go and spend thousands of dollars on a patio roof and you end up with some finds accumulating because your neighbor didn't like the way it turned out. And part of this, and I say this to my neighbors all the time. It's like it's not your house, right, it's not your house. I understand you have to look at it. If you know somebody across the street from you does something crazy, gaudy, tacky whatever across the street, Now you have to look at that house all the time, and that may not be the most esthetically pleasing thing to you, which is why here's another piece of advice. Get to know your neighbors right when you move in. Go talk to them, hang out with them, get to know them, you know, and then when they're thinking about doing something like that, you can maybe offer some advice of something that looks nicer. You'd also have a heads up when they're going to do something, and then you could file an oppositional you know, protest against it. But like there, you got to have you got to have some sort of protection to prevent people from going back and changing the rules in the past and then making you in violation. Basically, so I'm okay with that. It would all so require mediation before most lawsuits. Okay, that's a pretty good step too, if you can save a bunch of legal expenses for not just you, but also the HOA, because the HOA is your neighbors, right, The money that is in the HOA coffer is from your neighbors, So why would you want to waste your neighbor's money. State Senator Benton Saury, Republican from Johnston, called it a property rights protection bill. He called it the most sweeping legislation we have seen in some time with respect to hoa's in this chamber. It mandates budget transparency. That's a good thing. That's a very good thing because a lot of times when you bid out services, you need to do stuff like you know, law and care or whatever for the HOA. A lot of times the companies don't want the numbers to be known because they don't want their competitors to know what they're bidding on the work. However, the residents don't know, and that's a problem. Right. If the vendor says you can't release any of this information and the HOA board says, okay, then the residents don't know what the contracts are. And if you want to know if the HOA is wasting money or if they're spending too much on certain things, then you should be able to look at the contracts. Right. It restricts foreclosures until unpaid dues reach six months or twenty five hundred dollars, and it directs the North Carolina Department of Justice to track homeowner complaints against hoa's much like the caller in the last hour said, South Carolina had created this hotline, but that was five years ago. The problem is there's little enforcement mechanism in South Carolina, what Mark was saying earlier. The bill also bans management companies from profiting from fine collection, ensuring that there is no profit motive in enforcement. That is completely appropriate. So the HOA will hire a property management company to oversee the day to day operations. Because they're all volunteers, they're not getting paid for their service, and so you hire a property management company right to keep up with all of the day to day stuff, do the billing and everything else. Give people their pool passes. Well, if they are getting a cut of the fines that they levy on the homeowners, then they are incentivized to find more homeowners because they make more money. That is a conflict of interest, absolutely, so I support that idea too. These property management companies have a contract, that's what they earn. That's it all right. If you're listening to this show, you know I try to keep up with all sorts of current events, and I know you do too, And you've probably heard me say get your news from multiple sources. Why Well, because it's how you detect media bias, which is why I've been so impressed with ground News. It's an app and it's a website, and it combines news from around the world in one place, so you can compare coverage and verify information. You can check it out at check dot ground, dot news slash pete. I put the link in the podcast description too. I started using ground News a few months ago and more recently chose to work with them as an affiliate because it lets me see clearly how stories get covered and by whom. The blind spot feature shows you which stories get ignored by the left and the right. See for yourself check dot ground, dot news slash pete. Subscribe through that link and you'll get fifteen percent off any subscription. I use the Vantage plan to get unlimited access to every feature. Your subscription then not only helps my podcast, but it also supports ground News as they make the media landscape more transparent. Let's head on over to the phones and chat with Mark. Hello, Mark, Welcome to the showy was it going? I heard the ho A discussion. I couldn't help but chime in. I've been on both sides of the coin. I've been a treasurer and a resident uh in the home I live in. And it's funny you made that distinction, because before I start wailing on the managed hoas uh, in general, self managed HOA completely self managed is generally pretty good. So what is the difference, what's a self managed state? Jo A? Well, I thought you kind of made that distinction. So in other words, we're residents and we do all the activities literally, even as a treasure I literally did the tax forms, right, I you know, collected the money sent basically did accounting activities versus. And that where I'll this is where I'll lead into a lot of investment properties, residential properties I have in the area where they outsourced to a you know, uh some members, but they don't do anything. Basically all the operations and the management is outsourced to a property management company. Right, gotcha? Okay, So so yeah, just old plying on that because I've been legally involved in a lot of stuff over the past couple of years. Again a positive note, I think the tide is shifting a little bit. A lot of cases that have been escalated to Supreme Court in North Carolina have been in the favor of the residents against the hoas because of overreach. There's a perfect example of one a lot of people talk about is the arm using the Armstrong doctrine in cases. Because it was the case of one of the cases I dealt with with one of my investment properties where they changed the amended did the CCRs to grossly restrict even long term rentals. You know, they started in trying to say, hey, you know, let's get rid of the airbnbs, which is a separate animal, and say, hey, you know, put all kinds of restrictions. I don't want to go into too much detail, now. I understand, and that's a pretty common thing. Neighborhoods want a cap, for example, a percentage cap on the number of rentals, or they'll try to restrict. What happens get more restrictive. They put timelines on the turnover. If you exceed that, then you get kicked out of the pool, which and it could easily you know, basically make your property ineligible to to put to to get back in and rent, which you lose the intent and that's the you know, which is financially and and then if there are all kinds of other things, like they want to know, you know, who's there copies of the lease driver's license. I mean, just really overly restrictive things. Right. I went through a case where I represented myself pro se and and got to and those two other comments I want to make I uh uh, and we in a successful settlement and agreement. So I lucked out. But for most people, and here's the problem. And I've I've read these bills, and I've contacted some of the legislators, and Okay, it's baby steps, but there's a long way to go to be in the support of the normal homeowner. Because, first of all, I'll just give an example. If they do a CCR amendment or something amendment to the CCRs in your neighborhood, and there's all kinds of chitinery of how they do that. Sometimes they get it approved even in general with the two thirds approval. Say that happens you by law in North Carolina, you have one year to challenge it. Okay, Well, so two problems there. Number one, most of times people don't even know about it, and then secondly by they purposely lay low and don't really hit anybody with anything until they're up to about that nine or tenth month, right, then they hit people, right, and then people say, oh my goodness, what's going on? Hey, look this was a reapproved CCR. Oh guess what you dig into it? You got two months to respond to that. Yeah, the statute of limitations has expired. Yes, that's right. And then on top of that, okay, so then you're unless you've got to you know, a real estate HOA guy that's a buddy. That's another thing that's happened in this area across North Carolina and probably the nation. I don't know, but there's basically a very small number of attorneys that specialize in real estate law hoa contract law that will rep individuals. All the hoas and the property management companies have sucked. Them up right well, and they're conflicted out is what happens is they you know, their firm has represented a management company, so they can't represent you. Yeah, but even out of the gate without doing the you know, conflict check. Right out of the gate, you say, hey, you're a resident, They're like, we don't rep residents. And I can tell you in the Charlotte area there's basically, I would say, two competent, relatively confident HOA lawyers that rep individuals. That's what you're down to. And I was able to talk one end to kind of between him and AI and myself, and my knowledge was able to chance successfully challenge. So that's kind of what I wanted to close out on. For the individual that wants to fight something, you're basically looking at thirty to fifty K just just to push it far enough. And you made your comment about taking your residence money on the legal stuff. I don't know of the numbers, but for every property I've ever owned in any HOA, include my own, we have insurance for that, but they don't care. You know, they spend it off. It doesn't hit the financials. You know. The only knife you've got is just to rile the residence up, you know, get the worry out of what they're doing. And you know I did a little bit of that myself. Sure well you have to. It's like I said, it's a political office, you know, and that's how you get a movement on abuses and get them to get them rectified. Mark I appreciate the call. That's good information. Here's a great idea. 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I had an HOA that was like that. We didn't have any amenities. We had like one walking trail that wasn't even paved, I think, and they just you know, would fix the flower beds, mow the grass at the front of the neighborhood and that was it. And it was a very cheap HOA. I think we paid two hundred dollars a year. That was it. But we also didn't have them doing anything. I had one interaction with them, they said, you have weeds in your front yard, and so I pulled the weeds and that was it. Lived there for years and never had any other interaction with them. Some hoa's are abusive, right, they go after neighbors. They they rule their neighborhood like it's the little fiefdom and it's a problem. Then there are also hoas that are controlled still by the builder while they're building, they control the HOA. The board is made up of employees of the builder, and that has a whole set of different kinds of pros and cons like all of these situations do so. One of the changes that's in the legislation this is House Bill four forty four, which cleared out of the North Carolina House Commerce Committee, and I believe all, well, yeah, I think this one just went through the House Commerce Committee. Yeah, Senate Bill three seventy eight is in the Senate Judiciary. So these are companion bills essentially, but they do have some differences. One of them here is I'm just going to read to you the proposed change because this has to do with one of the biggest bugaboos in Hoa on street parking. Love it or hate it, I have found no in between position among my neighbors. People complain that the cars are in the street, and then the residents say, well, I have to park in the street because my driveway is not long enough for two cars. They're like, well, you got to put it in the driveway, okay, So they put it in the driveway, and now they're blocking the sidewalk, and then people complain about the sidewalks being blocked. Right, So here is the amended language to regulate the use, maintenance, repair, replacement, modification of common elements provided. However, this is the new part that, in the absence of an express authorization in the declaration, a declaration is the thing that the builder does. They are the declarant It's the stuff that gets filed with the Register of Deed's office. It has all these It lays out all the CCRs, it lays out all of the sets the original declaration, and then anything if they want to add some more land, they want to do some different things. They have to amend the declaration. And by the way, there as far as I can tell, there is no requirement for notification to go out to residents when a declarant changes the declaration. When it's the builder we have had in my current neighborhood, I think we're up to thirteen amendments, fourteen maybe, and I'm not aware of any notification that this stuff was ever amended. It's just you got to keep going back to the website checking to see if there's a new amendment. So, unless in the absence of an express authorization in that document, in that declaration, and association shall not enforce any restriction on parking of a personal vehicle on a public street or public road for which the North Carolina Department of Transportation or local government has assumed responsibility for maintenance and repairs. In other words, if your HOA owns your roads, then they can ban on street parking. But if those roads got turned over to the city or the state, hoas cannot ban on street parking on those streets. That's going to make some people very happy or very angry, depending on their view of on street parking. Unless unless the authority to regulate such parking has been expressly delegated to the association by the NCDOT or the local government. So if the HOA goes to the city or goes to the state and they're like, hey, we want to allow on we want to ban on street parking. Can we have authorization to do that? And the city and state says fine, then you have the ability to ban it. Any such delegation will only be valid for a period not to exceed five years, at which time the association must reapply to the city or the state. So this presents a problem for certain neighborhoods because this now gets into forced annexation law. And I remember when the General Assembly did away with the forcible annexation. So like Charlotte is so large as city limits are so large because they forcibly annexed all these homes and communities on their perimeter outside of the city limits. They gobbled it all up because they were allowed to just forcibly annex you into the city and for new developments outside the city. Those new developments then were built until about twenty eleven, twenty eleven, twenty twelve, before the Republicans came in and got rid of this under what's called the extra territorial jurisdiction, and so the zoning decisions. I remember sitting in council meetings watching rezonings and people coming down complaining. I did stories on it. They're like, you're rezoning our property or our neighborhood, and we don't have any elected representation on the city council because we were outside or they were outside the city limits. But the city was doing the zoning under the extra territorial jurisdiction idea that well, we're going to annex you in anyway. In fact, Charlotte and the six towns around it, they carved up the whole county and they make these zoning decisions for property that's outside their city limits. So when you have a development that is building to the Charlotte City Code because they're governed by the Charlotte ordinances. Because of the extra territorial jurisdiction, and then the state bans forcible annexation, now you got to build to the counter to the state road code. And the state road code is different, and so now you have hoas that have been built and they cannot turn their roads over to anybody. So now they have to maintain their own roads, which is very expensive. All right, So spring is here a time of renewal and celebrations. You've got graduations, weddings, anniversaries and especial days for mom and dad. Your family's making memories that are going to last a lifetime. But let me ask you are all of those treasured moments from days gone by? Are they hidden away on old VCR tapes, eight millimeter films, photos slides? Are they preserved? Because over time, these precious memories can fade and deteriorate, losing the magic of yesterday. At Creative Video, they help you protect what matters most. Their expert team digitizes your cherished family moments and transfers them onto a USB drive, freezing them in time so they can be enjoyed for generations to come. I urge you do not wait until it's too late this spring. Celebrate your past. Visit Creative Video today and let them preserve your legacy with the love and care that it deserves. Creative Video Preserving Family Memories since nineteen ninety seven, Located in mint Hill, just off four eighty five, mail orders are accepted to get all the details that create a video. Dot Com let's head to the phones in chat with David. Hello, David, welcome, Hey, hey Pee. What's going on? Man? Oh? You know Samuel, Samuel, I hear you. Now. I lived in an HOA and I kept trying to get them to enforce the street parking thing because you know, the streets were so small you couldn't hardly back out of your driveway of things. And they eventually told me that they could not enforce that because it was a state owned road and that they adopt a lot of these I guess general clauses into some of these HOA things. So I asked them, I said, well, if everybody who moves into this neighborhood has to sign a document, say, and they have received the HOA rules and regulations, then can we not go after them for breach of contract since they're parking in the street and have agreed not to. And that's when I got a call from their, uh, the HOA attorney told me that I was harassing them and not to talk to them about street parking anymore. How many times, now, David, how many times did you talk to them? Oh? It was quite a few. Okay. You know, that's one of those things where It's like, if this is a rule, why can't you enforce it? And then you know, they finally come up with the excuse of well, it's a state owned road. And as soon as they said that, I understood. But okay, now we need to look at breach of contract. People signed saying they would not park out there, right, But. How do you so if they sign the document, I would have to see the document, I mean, because what is it actual? Yeah, because what does it say? Documents saying that they had received all of the covenants of the Hoa and that they agreed to abide by the rules and the covenants of the Hoa. So therefore that should have been breach of contract because they weren't abiding by the rules and covenants of the Hua. So but they weren't even they weren't even finding the violations. No, not the street parking, but everything else was double almost it seemed like, so yeah, yeah, yeah, that's why I was going after the whole street parking, because they were enforcing everything else but not enforcing that. And that was what was really sticking in my crawl, was like, why are you going to enforce everything else but not this? And this is then that's yeah. Sorry, this is North Carolina. Yes, yes, right in Monroe area. So that's interesting because the House bill has this portion that says, in the absence of expressed authorization in the Declaration and Association, shall not enforce any restriction on parking of a personal vehicle on a public street or public road for NCDOT or the local jurisdiction. So and that's additional language. It's all underlined. So that's newly inserted language. So I'm curious as to why they thought that that they couldn't enforce that on state law or on the state roads unless, of course it's in there or yeah, I mean, because that's all new language, so it didn't exist before. Yeah, it was just a path of least resistance for them. They just didn't want to go after it because they were using the fact that it was a state road to kind of hold all of the homeowners at Bay who were complaining about it, right, So yeah, so it just a loop over. So what is it about the on street parking that that that you disapprove of, Well, it was just that the roads were so small, you know, they're making these neighborhoods so small, trying to squeeze. So many houses in them and making the roads really small that even if you do park on the street, you can't hardly get in there. We had an emergency one night there was street parking. We couldn't even get an ambulance down the street. Literally they had to bring in a tow truck to move vehicles out of the way because you couldn't get people out of bed. I mean it can, it can create a great safety hazard. People just don't think about that portion of it. Yeah, maybe a route to go is to do a single side parking, you know, only allowed to park on one side of the street, you know on odds and even days or whatever. Cities do that kind of stuff all the time. Yeah, if they find it, if they find something that works, and that's great. It's just unfortunately there was just you know, there was no no rule and it was or there was a rule, but just never being in force. It was just all kind of third game. Yeah. No, I hear you, Dave. I appreciate the call man you too. This is one of those things, like I said there, Well, there are things that trip everybody's trigger, and everybody is different. Some people share the same trigger, right, but whether it's oh my gosh, you know your garbage can wasn't taken in, uh, you know promptly after the trash service, like you got you got to bring it in by five pm. And you know, somebody walks around they look at the trash corrals that are supposed to you know, screen the garbage cans, and oh, my gosh, it's not up to our code because our code says it has to be you know, on a paper base and attached to the house and has to have a door and whatever has to be a certain color. And there are people that that's their focus. And then there are people that are like, oh, we shouldn't allow on street parking. I don't want I don't want it. I don't like it. And and I've told people this in my neighborhood because they complain about speeding and they complain about on street parking. I said, you know, if you allow on street parking, people slow down because subconsciously you drive faster on a wider piece of asphalt right narrower roads. This is new urbanism neo urbanism design. When you narrow the roads and you allow cars parked on the sides, traffic slows down. Just naturally. And then the response is always, well, what about a kid chase the ball out into the middle of the street. I'm not gonna see them coming or whatever. Like Yeah, but if you're speeding, you ain't gonna have time to stop either, So you should be driving very slowly through the neighborhood streets. Do people do that? Not always? This is what I have said that Thomas Soule quote to my neighbors so many times. I keep telling them there are no solutions, there are only trade offs. And that's what like this this debate about the on street versus the uh you know, the driveway parking and everything else, because there are some houses in my neighborhood they don't have enough room to park more than a single car, and then when you park the car in the driveway, then the car hangs out over the sidewalk, and then they complain that they can't use the sidewalks. And that's an ADA compliance problem. You know, bad design really causes all of this stuff. All right, that'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast. Asked, so if you'd like, please support them too and tell them you heard it here. You can also become a patron at my Patreon page or go to dpetecalnarshow dot com. Again, thank you so much for listening, and don't break anything while I'm gone.