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Old 02-08-2011, 06:00 PM
 
13 posts, read 25,639 times
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Default North Carolina homeowner Forced into HOA

In North Carolina, can a homeowner be forced into a newly formed HOA if the developer did not form the HOA prior to the first lot being sold. I am in a subdivision with 40 lots. All lots sold with homes already built for several years. All homeowners have 1/40 fee simple title to common are in their deed. No mention of HOA in deed or restrictions. Just an architectural committee in the restrictions. Now the developer has had an attorney to form an HOA and is telling us we are forced to join due to Planned Community Act in North Carolina. Does anyone have any info on this or the name of an attorney that is experience in this area that does not represent HOA's???
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Old 02-09-2011, 08:56 AM
 
Location: North Carolina
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Your question has been coming up a lot lately, and I see a lot of people have been giving a pretty good preliminary answer. What you need to do is look at the declaration or the covenants, conditions and restrictions that are recorded at the register of deeds office (these can generally be amended with 67% of the lot owners affirmative vote/consent).

To answer your question, take a look at N.C.G.S. 47F‑3‑101 (link: GS_47F-3-101). Generally, an HOA should be incorporated no later than the date the first lot in the subdivision is conveyed.

Let me know if you have any additional questions.

Last edited by Green Irish Eyes; 02-12-2011 at 07:11 PM..
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Old 02-11-2011, 11:39 AM
 
Location: NC
127 posts, read 247,969 times
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Quote:
Originally Posted by liltiaralou View Post
In North Carolina, can a homeowner be forced into a newly formed HOA if the developer did not form the HOA prior to the first lot being sold. I am in a subdivision with 40 lots. All lots sold with homes already built for several years. All homeowners have 1/40 fee simple title to common are in their deed. No mention of HOA in deed or restrictions. Just an architectural committee in the restrictions. Now the developer has had an attorney to form an HOA and is telling us we are forced to join due to Planned Community Act in North Carolina. Does anyone have any info on this or the name of an attorney that is experience in this area that does not represent HOA's???
If you own 1/40th of the common areas along with the other 39 lot owners then an HOA is necessary to maintain the common areas. The other option is to let the common areas go unmaintained which will absolutely have a negative effect on your property value.
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Old 02-11-2011, 06:34 PM
 
Location: Charlotte, NC
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I looked up the planned community act, perhaps this is something you could use to your advantage: Except in the case of taking of all the lots by eminent domain (G.S. 47F‑1‑107), a planned community may be terminated only by agreement of lot owners of lots to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the lots in the planned community are restricted exclusively to nonresidential uses.
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Old 02-18-2011, 10:18 AM
 
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Quote:
Originally Posted by CarolinaAppraiser View Post
If you own 1/40th of the common areas along with the other 39 lot owners then an HOA is necessary to maintain the common areas. The other option is to let the common areas go unmaintained which will absolutely have a negative effect on your property value.
Not at all true. Tenancy-in-common is a recognized form of property ownership. The property owners can choose to do what they want with the property. The property belongs to them, not to an HOA corporation.

People bought the property without the burden of an HOA corporation. An HOA corporation with the perpetual liens that can never be paid off and the inevitable litigation vortex will not possibly be a good thing for property values.

The property value attempts to justify an HOA corporation always fails to address the reason people bought homes in the first place - to live in them and raise a family in them. There is no evidence that HOAs preserve property values for the owners and ample evidence that HOAs disrupt the lives of people whose property is so burdened.

see this website about this issue in North Carolina:
Anatomy of a Lawsuit

and this primer about HOAs which discusses how the industry operates rather than the myths promulgated by the HOA industry:
theHOAprimer
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Old 02-18-2011, 10:56 AM
 
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Angry Hoa Management company

Thank you for that response IC-delight!

We never wanted a management company to come in and force a HOA on our neighborhood. As a matter of fact, it has now divided the neighbors. In the past, we came together as neighbors every spring and had a clean up day not only at the common area but on the highway next to the subdivision. It was neighbor helping neighbor. This Management Company has done nothing to improve the neighborhood, charged a great deal of money to the owners for their fee and neighbors won't talk to neighbors! I also believe the management company provided false information telling the owners it didn't matter whether they wanted an HOA or not. They said we were all forced to comply and we must pay the assessment. However, there is no mention of any assessments or an HOA in the restrictive covenants and each owner was deeded 1/40 ownership in the common area.
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Old 02-18-2011, 12:14 PM
 
Location: NC
127 posts, read 247,969 times
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Quote:
Originally Posted by IC_deLight View Post
Not at all true. Tenancy-in-common is a recognized form of property ownership. The property owners can choose to do what they want with the property. The property belongs to them, not to an HOA corporation.

People bought the property without the burden of an HOA corporation. An HOA corporation with the perpetual liens that can never be paid off and the inevitable litigation vortex will not possibly be a good thing for property values.

The property value attempts to justify an HOA corporation always fails to address the reason people bought homes in the first place - to live in them and raise a family in them. There is no evidence that HOAs preserve property values for the owners and ample evidence that HOAs disrupt the lives of people whose property is so burdened.

see this website about this issue in North Carolina:
Anatomy of a Lawsuit

and this primer about HOAs which discusses how the industry operates rather than the myths promulgated by the HOA industry:
theHOAprimer
First of all, an HOA is not a corporation. It's a home owners association. In this case the HOA would be the 40 homeowners. No corporation involved. The 40 homeowners own the common areas (tenancy in common) and the 40 homeowners can collectively (hence an HOA) decided how to maintain the common areas or they can let the common areas go unmaintained.

As an example, assume it's a 40 lot subdivision and the common grounds are the entrance area and one acre of land in the rear of the subdivision that is used as a park or picnic area and nobody maintains it. The grass grows 2 feet high and it looks like raw land. That will make the neighorhood look distressed, decrease desire to live there and drop property values. It's a simple supply and demand issue.

Somebody has to maintain the common areas. If it isn't the 40 people who own the common areas then who's going to maintain it?


You are clearly confusing an HOA with a property management company. They are NOT the same thing.
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Old 02-18-2011, 12:25 PM
 
Location: NC
127 posts, read 247,969 times
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Quote:
Originally Posted by liltiaralou View Post
Thank you for that response IC-delight!

We never wanted a management company to come in and force a HOA on our neighborhood. As a matter of fact, it has now divided the neighbors. In the past, we came together as neighbors every spring and had a clean up day not only at the common area but on the highway next to the subdivision. It was neighbor helping neighbor. This Management Company has done nothing to improve the neighborhood, charged a great deal of money to the owners for their fee and neighbors won't talk to neighbors! I also believe the management company provided false information telling the owners it didn't matter whether they wanted an HOA or not. They said we were all forced to comply and we must pay the assessment. However, there is no mention of any assessments or an HOA in the restrictive covenants and each owner was deeded 1/40 ownership in the common area.
This thread is loaded with misinformation. A management company can't force an HOA on you. If you are paying dues it's to the HOA. The management company only collects the dues on behalf of the HOA. If you've got a beef take it up with the president of the HOA which is one of your neighbors (one of the 40 lot owners) and tell them you want a copy of the budget to see where the money is being spent. The other alternative is to move into a neighborhood where there is no tenancy in common and avoid the situation altogether.
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Old 02-18-2011, 03:38 PM
 
1,285 posts, read 1,348,944 times
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Quote:
Originally Posted by CarolinaAppraiser View Post
First of all, an HOA is not a corporation. It's a home owners association. In this case the HOA would be the 40 homeowners. No corporation involved. The 40 homeowners own the common areas (tenancy in common) and the 40 homeowners can collectively (hence an HOA) decided how to maintain the common areas or they can let the common areas go unmaintained.
Ignorance must be bliss. The term "association" is used to deliberately deceive prospective purchasers, juries, and judges. These are NOT associations just because the term "association" appears in the name. They are incorporated entities, i.e. a corporation and they are governed under corporation law.

The HOA corporation is NEVER "the homeowners". The HOA corporation is a separate legal entity from the owners. The word "association" is a marketing term used to mask the legal distinction between the homeowners and the corporate entity. "Association" is a misleading term at best. These are involuntary membership corporations. Look for the "inc." or "corp" in the formal legal name rather than the marketing fluff.

Quote:
As an example, assume it's a 40 lot subdivision and the common grounds are the entrance area and one acre of land in the rear of the subdivision that is used as a park or picnic area and nobody maintains it. The grass grows 2 feet high and it looks like raw land. That will make the neighorhood look distressed, decrease desire to live there and drop property values. It's a simple supply and demand issue.
The latter is your opinion, however, if you actually are an appraiser you know that appraisals don't care whether trash cans are left at the street or whether cars are on the driveway. Without knowing anything else about the area, so what if there are areas that look like "raw land". Some would call that a green space and find it desirable to have such a buffer.

The term "common grounds" is often used to mislead purchasers. In HOA-burdened subdivisions, the term "common grounds" is wholly inaccurate. Such grounds are the property of the HOA corporation, not the owners. The owners do not own the property in common.

In the case at hand, however, the property actually belongs to the owners who have an undivided pro-rata ownership interest in the "common" property in addition to ownership of their own respective lots.

Quote:
Somebody has to maintain the common areas. If it isn't the 40 people who own the common areas then who's going to maintain it?
The owners can do as they choose with the property within the confines of local codes and ordinances. The property does not belong to an HOA corporation and the property was not burdened by an HOA corporation at the time it was purchased. The owner bought it free and clear of any restrictions implementing an HOA corporation as did the other owners. You really should read the Armstrong case available from the link above. Despite your "belief", the NC Supreme Court does not agree that an HOA corporation can simply be imposed on homeowners.

Quote:
You are clearly confusing an HOA with a property management company. They are NOT the same thing.
You are confusing "association" with "corporation". "Property management" companies are used by an owner to manage the owner's property. In the case at hand, an HOA corporation has sprung up from nowhere, hired a "property management" company which is threatening homeowners regarding property owned by the homeowners individually including the property their homes are on and the property that the owners actually own in common. The HOA management companies are not hired by residents - that's who they prey upon. The client of the HOA management company is the HOA corporation, not the homeowners.
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Old 02-18-2011, 07:53 PM
 
13 posts, read 25,639 times
Reputation: 13
To clear this up, the developer admitted that he did not comply with the NC Planned Community Act. He did not incorporate the Homeowners association before the first lot was sold per the statute. He waited until all the lots were sold, homes were built, and families were settled and as a group of proud owners - already maintaining the common area. So he tries to backtrack to get himself out of deep trouble. He hires an attorney, who by the way owns the management company that now oversees the Homeowners Association. He incorporated the Homeowners Association last year. Had his attorney - management company call a meeting and tell all the homeowners we must comply with the NC Planned Community Act regardless of whether they wanted to or not. Told the owners to appoint a board and they would turn the HOA back over to the owners. However, the developer's hand chosen management company would be GLAD to provide management. Just hire them and the owners will not have to do a thing! Many owners paid the assessment under duress for fear they would have a lien placed on their homes. Felt it was better to pay the assessment than have to fight it in court. However, a few have held out due to their firm belief that "We The People" should never give up our rights as American citizens and as American Homeowners.
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