HOAs in North Carolina: What Buyers Should Review
A practical checklist for understanding HOA costs, restrictions, documents and questions before your due diligence deadline.
An HOA can affect both the cost of owning a home and how the property may be used. Buyers should look beyond the current dues amount and understand the governing documents, assessments, services, restrictions and available association information before the relevant contract deadline.
Start with the Owners' Association disclosure information
North Carolina's residential disclosure law includes an owners' association and mandatory covenants disclosure for covered transactions. The required information includes items such as the association contact, regular dues, services paid through those dues, approved assessments, certain litigation information and fees connected with a transfer.
Regular dues are only one part of the cost
Ask what the dues cover and how often they are paid. Then look for other possible costs, including approved special assessments and transfer or administrative fees. A low monthly or quarterly payment does not by itself tell you the association's overall financial position or future needs.
- Declaration or restrictive covenants
- Bylaws and current rules or regulations
- Current regular dues and what they cover
- Approved special assessments
- Available budget and financial information
- Recent meeting information when available and relevant
- Transfer, setup or other transaction-related fees
- Rules affecting your intended use of the property
Read the restrictions with your plans in mind
Restrictions can affect matters such as exterior changes, fences, parking, rentals, signs, pets, recreational vehicles or other uses. Do not rely only on what neighboring owners appear to be doing. If a particular use is important to you, verify it against the governing documents and ask the appropriate professional when interpretation is needed.
If you want to install a fence, park a work vehicle, rent the home later or make a significant exterior change, investigate that specific issue before assuming it will be permitted.
What about the association's finances?
Financial information can help buyers understand how the association is operating. North Carolina planned-community law requires associations to maintain financial records and make specified records reasonably available to owners and their authorized agents, subject to the governing law and bylaws. Availability to a prospective buyer can depend on the circumstances, so coordinate document requests early.
Ask about assessments and pending issues
An approved special assessment can materially change the cost of ownership. Also review available information about association litigation or significant projects. The purpose is not to label an HOA as “good” or “bad,” but to understand the obligations attached to the property you are considering.
HOA review belongs inside due diligence
Do not leave HOA questions until closing week. Request and review available information early enough to investigate concerns before your due diligence deadline. If the documents raise legal questions about restrictions, enforcement or your rights, consult the closing attorney.
NC General Statutes § 47E-4: Required disclosures
NC Planned Community Act § 47F-3-118: Association records
This article is educational and not legal advice.
Have questions about a property you are considering?
I can help you identify the questions to raise, keep important contract dates organized and coordinate with the appropriate inspector, lender, attorney or specialist when a property needs additional investigation.
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