GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 378
Short Title: HOA Revisions. (Public)
Sponsors: Senators Sawrey, Johnson, and Sawyer (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 24, 2025
*S378 -v-1*
A BILL TO BE ENTITLED 1
AN ACT TO AMEND LAWS GOVERNING OWNERS' A SSOCIATIONS IN 2
CONDOMINIUMS AND PLA NNED COMMUNITIES, TO MANDATE 3
PRELITIGATION MEDIATION OF DISPUTES BETWEEN OWNERS' ASSOCIATIONS 4
AND THEIR MEMBERS, A ND TO REQUIRE THE DEPARTMENT OF JUSTICE TO 5
COLLECT AND REPORT ON COMPLAINTS SUBMITT ED TO IT INVOLVING SUCH 6
DISPUTES. 7
The General Assembly of North Carolina enacts: 8
9
PART I. AMEND LAWS G OVERNING OWNERS' ASS OCIATIONS IN 10
CONDOMINIUMS AND PLA NNED COMMUNITIES 11
SECTION 1. G.S. 47C-3-102(a) reads as rewritten: 12
"§ 47C-3-102. Powers of unit owners' association. 13
(a) Unless the declaration expressly provides to the contrary, the association, even if 14
unincorporated, may do all of the following: 15
… 16
(3) Hire and terminate managing agents and other employees, agents, and 17
independent contractors. A contract between an association and a managing 18
agent shall not have a term exceeding two years and shall not contain an 19
automatic renewal provision that requires the association to give notice of 20
nonrenewal more than 60 days prior to the contract's anniversary date. Any 21
contract with a managing agent that is automatically renewed shall be 22
terminable by the association for any reason upon 90 days' notice. A managing 23
agent shall not be compensated in whole or in part based on the amount of 24
fines collected by the managing agent on behalf of the association. 25
… 26
(6) Regulate the use, maintenance, repair, replacement, and modification of 27
common elements.elements; provided, however, that in the absence of an 28
express authorization in the declaration, an association shall not enforce any 29
restriction on parking of a personal vehicle on a public street, public road, or 30
public right-of-way for which the North Carolina Department of 31
Transportation or local government has assumed responsibility for 32
maintenance and repairs, unless the authority to regulate such parking has 33
been expressly delegated to the association by the Department of 34
Transportation or local government under an agreement prescribing the 35
manner in which the association may exercise that authority. As used in this 36 General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 378-First Edition
subdivision, "personal vehicle" means an automobile with a gross weight of 1
less than 26,001 pounds that is used for personal pleasure, travel, or 2
commuting to and from a place of work, and does not include a motor home 3
or self-propelled recreational vehicle, or an automobile that is otherwise used 4
primarily in connection with any commercial endeavor or business. 5
… 6
(11) Impose charges for late payment of assessments, not to exceed the greater of 7
twenty dollars ($20.00) per month or ten percent (10%) of any assessment 8
installment unpaid and, after notice and an opportunity to be heard, suspend 9
privileges or services provided by the association (except rights of access to 10
lots) during any period that assessments or other amounts due and owing to 11
the association remain unpaid for a period of 30 days or longer, and levy 12
reasonable fines not to exceed one hundred dollars 13
($100.00)(G.S. 47C-3-107.1) for violations of the declaration, bylaws, and 14
rules and regulations of the association. No fine shall be levied for violation 15
of a provision restricting or prohibiting tutoring, educational lessons, 16
academic lessons, or music lessons provided in the owner's unit to a group of 17
no more than five people at any one time, regardless of whether compensation 18
is received for such lessons. 19
… 20
(12a) Impose reasonable charges in connection with the preparation of statements a 21
lender's questionnaire or certification or a statement of unpaid assessments, 22
which must be furnished within 10 business days after receipt of the request, 23
in an amount not to exceed two hundred dollars ($200.00) per statement or 24
request, item requested, and an additional expedite expedited fee in an amount 25
not to exceed one hundred dollars ($100.00) if the request is made within 48 26
hours of closing, all of which item is requested to be furnished less than 10 27
days after receipt of the request. These charges may be collected by the 28
association, its managers, or its agents. Any charge for preparation of a 29
lender's questionnaire or certification shall be billed to the requesting party. 30
Neither the association nor its managing agent shall impose any charge upon 31
a unit owner or a prospective purchaser of a unit in connection with the 32
conveyance of a unit unless the charge is expressly authorized in this 33
subdivision, or unless the charge is authorized in the declaration and is not 34
otherwise expressly prohibited by law. Violation of this subdivision by an 35
association or by its managing agent shall constitute an unfair and deceptive 36
trade practice under G.S. 75-1.1. 37
(12b) Impose a reasonable charge for providing copies of records requested by a 38
member, not to exceed the actual cost of photocopying the records, including 39
the cost of materials used in responding to the request and the cost of shipping 40
if shipping is required. 41
… 42
(14a) Exercise any authority granted to it under the declaration to approve or 43
disapprove any proposed changes to a unit or limited common element. In 44
exercising such authority, the association shall provide a fair, reasonable, and 45
expeditious procedure for making its decision, which procedure shall be set 46
forth in the association's governing documents. The procedures shall state the 47
maximum time for issuance of any decision on a proposal or a request for 48
reconsideration. An association may adopt formal submission requirements 49
for any proposed change, which shall be communicated to the members. A 50
decision shall be made within 90 days after the initial submission of the 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 3
proposal or submission of any additional information or changes to the 1
proposal requested by the association in response to the initial submission. A 2
decision shall be in writing, shall be made in good faith, and may not be 3
unreasonable, arbitrary, or capricious. If the proposal is disapproved, the 4
decision shall include an explanation of why the proposal is disapproved and, 5
if the determination was not issued by the executive board, a description of 6
the procedure for reconsideration of the decision by the executive board. 7
…." 8
SECTION 2. G.S. 47C-3-107.1 reads as rewritten: 9
"§ 47C-3-107.1. Procedures for fines and suspension of condominium privileges or services. 10
Unless a specific procedure for the imposition of fines or suspension of condominium 11
privileges or services is provided for in the declaration, a hearing shall be held before the 12
executive board or an adjudicatory panel appointed by the executive board to determine if any 13
unit owner should be fined or if condominium privileges or services should be suspended 14
pursuant to the powers granted to the association in G.S. 47C-3-102(11). Any adjudicatory panel 15
appointed by the executive board shall be composed of members of the association who are not 16
officers of the association or members of the executive board. The unit owner charged shall be 17
given notice of the charge, opportunity to be heard and to present evidence, and notice of the 18
decision. A written notice of hearing shall be sent to the unit owner in the manner provided in 19
G.S. 47C-3-116(e) not less than 10 days prior to the scheduled hearing date. The notice of hearing 20
shall specify the date, time, and place of the hearing and shall include a general description of 21
each alleged violation and the action, if any, required to cure each alleged violation. Not less than 22
two days prior to the scheduled hearing date, the executive board or adjudicatory panel shall 23
provide the unit owner with the names of any persons whose testimony it intends to offer in 24
support of the charge and a copy of any documents, photographs, or other exhibits that it intends 25
to submit in support of the charge. The unit owner shall be given an opportunity to be heard and 26
to present evidence at the hearing. A written notice of the decision specifying each violation 27
verified by the evidence and the action, if any, required to cure each verified violation shall be 28
sent to the unit owner in the manner provided in G.S. 47C-3-116(e). If it is decided that a fine 29
should be imposed, a fine not to exceed one hundred dollars ($100.00) may be imposed for the 30
violation and without further hearing, for each day more than five days after the decision that the 31
violation occurs. occurs, up to a maximum fine of two thousand five hundred dollars ($2,500). 32
Such fines shall be assessments secured by liens under G.S. 47C-3-116. If it is decided that a 33
suspension of condominium privileges or services should be imposed, the suspension may be 34
continued without further hearing until the violation or delinquency is cured. A unit owner may 35
appeal a decision of an adjudicatory panel to the full executive board by delivering written notice 36
of appeal to the executive board within 15 days after the date of the decision. The executive board 37
may affirm, vacate, or modify the prior decision of the adjudicatory body." 38
SECTION 3.(a) G.S. 47C-3-116 reads as rewritten: 39
"§ 47C-3-116. Lien for sums due the association; enforcement. 40
(a) Any assessment attributable to a unit which remains unpaid for a period of 30 days 41
or longer shall constitute a lien on that unit when a claim of lien is filed of record in the office of 42
the clerk of superior court of the county in which the unit is located in the manner provided in 43
this section. A claim of lien securing a debt consisting of fines or fine-related charges shall be 44
filed separately from a claim of lien securing other sums owed to the association and shall be 45
filed within 90 days after the date the fine was imposed. As used in this section, "fines or 46
fine-related charges" means fines imposed by the association, interest on unpaid fines, or 47
attorneys' fees incurred by the association related to fines imposed by the association. Once filed, 48
a claim of lien secures all sums due the association through the date filed and any sums due to 49
the association thereafter. Unless the declaration provides otherwise, fees, charges, late charges 50
and other charges imposed pursuant to G.S. 47C-3-102, 47C-3-107, 47C-3-107.1, and 47C-3-115 51 General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 378-First Edition
are subject to the claim claims of lien provided for under this section as well as any other sums 1
due and payable to the association under the declaration, the provisions of this Chapter, or as the 2
result of an arbitration, mediation, or judicial decision. 3
(b) The association must provide proper notice of delinquent assessments to the unit 4
owner before filing a claim of lien. The association must make reasonable and diligent efforts 5
ensure that its records contain the unit owner's current physical mailing address. address and 6
current electronic mailing address. No fewer than 15 days prior to filing the lien, the association 7
shall mail do all of the following: 8
(1) Mail a statement of the assessment amount due by first class mail to the 9
physical address of the unit and the unit owner's address of record with the 10
association and, if different, to the address for the unit owner shown on the 11
county tax records for the unit. If the unit owner is a corporation or limited 12
liability company, the statement shall also be sent by first class mail to the 13
mailing address of the registered agent for the corporation or limited liability 14
company. Notwithstanding anything to the contrary in this Chapter, the 15
association is not required to mail a statement to an address known to be a 16
vacant unit or to a unit for which there is no United States postal address. 17
(2) Send a statement of the assessment amount due via electronic mail if the 18
owner has designated an email address as provided in G.S. 55A-1-70(b). 19
(c) A claim of lien shall set forth the name and address of the association, the name of 20
the record owner of the unit at the time the claim of lien is filed, a description of the unit, and the 21
amount of the lien claimed. A claim of lien may also appoint a trustee to conduct a foreclosure 22
as provided in subsection (f) of this section. The first page of the claim of lien shall contain the 23
following statement in print that is in boldface, capital letters, and no smaller than the largest 24
print used elsewhere in the document: 25
"THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE 26
LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH 27
FORECLOSURE ENFORCEMENT AGAINST YOU AND YOUR PROPERTY IN LIKE 28
MANNER AS A MORTGAGE AS PERMITTED UNDER NORTH CAROLINA LAW." 29
The person signing the claim of lien on behalf of the association shall attach to and file with 30
the claim of lien a certificate of service attesting to the attempt of service on the record owner, 31
which service shall be attempted in accordance with G.S. 1A-1, Rule 4(j), for service of a copy 32
of a summons and a complaint. If the actual service is not achieved, the person signing the claim 33
of lien on behalf of the association shall be deemed to have met the requirements of this 34
subsection if service has been attempted pursuant to both of the following: (i) G.S. 1A-1, Rule 35
4(j)(1)c, d, or e and (ii) by mailing a copy of the lien by regular, first class mail, postage prepaid 36
to the physical address of the unit and the unit owner's address of record with the association, 37
and, if different, to the address for the unit owner shown on the county tax records and the county 38
real property records for the unit. The association shall also send the owner a copy of the claim 39
of lien and certificate of service by email if the owner has designated an email address as provided 40
in G.S. 55A-1-70(b). In the event that the owner of record is not a natural person, and actual 41
service is not achieved, the person signing the claim of lien on behalf of the association shall be 42
deemed to have met the requirements of this subsection if service has been attempted once 43
pursuant to the applicable provisions of G.S. 1A-1, Rule 4(j)(3) through G.S. 1A-1, Rule 4(j)(9). 44
Notwithstanding anything to the contrary in this Chapter, the association is not required to mail 45
a claim of lien to an address which is known to be a vacant unit or to a unit for which there is no 46
United States postal address. A lien for unpaid assessments is extinguished unless proceedings 47
to enforce the lien are instituted within three years after the filing of the claim of lien in the office 48
of the clerk of superior court. A lien securing a debt consisting of fines or fine-related charges is 49
extinguished unless proceedings to enforce the lien are instituted within one year after the filing 50
of the claim of lien in the office of the clerk of superior court. 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 5
(d) A claim of lien filed under this section is prior to all liens and encumbrances on a unit 1
except (i) liens and encumbrances, specifically including, but not limited to, a mortgage or deed 2
of trust on the unit, recorded before the filing of the claim of lien in the office of the clerk of 3
superior court and (ii) liens for real estate taxes and other governmental assessments and charges 4
against the unit. This subsection does not affect the priority of mechanics' or materialmen's liens. 5
(e) The association shall be entitled to recover the court may, in the court's discretion, 6
allow the association to recover the reasonable attorneys' fees and costs it the association incurs 7
in connection with the collection of any sums due. A lot owner may not be required to pay 8
attorneys' fees and court costs until the lot owner is notified in writing of the association's intent 9
to seek payment of attorneys' fees, costs, and expenses. The notice must be sent by first-class 10
mail to the physical address of the lot and the lot owner's address of record with the association 11
and, if different, to the address for the lot owner shown on the county tax records for the lot. The 12
association must make reasonable and diligent efforts to ensure that its records contain the lot 13
owner's current mailing address. Notwithstanding anything to the contrary in this Chapter, there 14
shall be no requirement that notice under this subsection be mailed to an address which is known 15
to be a vacant lot on which no dwelling has been constructed or a lot for which there is no United 16
States postal address. The notice shall set out the outstanding balance due as of the date of the 17
notice and state that the lot owner has 15 days from the mailing of the notice by first-class mail 18
to pay the outstanding balance without the attorneys' fees and court costs. If the lot owner pays 19
the outstanding balance within this period, then the lot owner shall have no obligation to pay 20
attorneys' fees, costs, or expenses. The notice shall also inform the lot owner of the opportunity 21
to contact a representative of the association to discuss a payment schedule for the outstanding 22
balance, as provided in subsection (i) of this section, and shall provide the name and telephone 23
number of the representative. 24
(f) Except as provided in subsection (h) of this section, the association, acting through 25
the executive board, may foreclose a claim of lien securing a debt consisting of sums due the 26
association other than fines or fine-related charges in like manner as a mortgage or deed of trust 27
on real estate under power of sale, as provided in Article 2A of Chapter 45 of the General Statutes, 28
if the assessment remains unpaid delinquency has continued for 90 180 days or more. The 29
association shall not foreclose the claim of lien unless the executive board votes to commence 30
the proceeding against the specific unit. The following provisions and procedures shall be 31
applicable to and complied with in every nonjudicial power of sale foreclosure of a claim of lien, 32
and these provisions and procedures shall control to the extent they are inconsistent or in conflict 33
with the provisions of Article 2A of Chapter 45 of the General Statutes: 34
… 35
(5) After the association has filed a claim of lien and prior to the commencement 36
of a nonjudicial foreclosure, the association shall give to the unit owner notice 37
of the association's intention to commence a nonjudicial foreclosure to enforce 38
its claim of lien. The notice shall contain the information required in 39
G.S. 45-21.16(c)(5a).G.S. 45-21.16(c)(5) and G.S. 45-21.16(c)(5a) and shall 40
specifically reference the unit owner's right of redemption provided under 41
subdivision (8) of this subsection. The notice shall be sent by first-class mail 42
to the physical address of the unit and the unit owner's address of record with 43
the association and, if different, to the address for the unit owner shown on 44
the county tax records for the unit. 45
(5a) The notice of hearing required pursuant to G.S. 45-21.16(a) shall be 46
accompanied by the association's certification of the actions it has taken to 47
give the owner notice of delinquent assessments in compliance with 48
subsection (b) of this section. 49
(5b) At the commencement of the hearing, the clerk shall inquire as to whether the 50
owner occupies the unit as his or her principal residence. If it appears that the 51 General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 378-First Edition
owner does currently occupy the unit as a principal residence, the clerk shall 1
further inquire as to the efforts the association has made to communicate with 2
the owner and to attempt to resolve the matter voluntarily before the 3
foreclosure proceeding. The clerk's inquiry shall not be required if the 4
association has submitted, at or before the hearing, an affidavit briefly 5
describing any efforts that have been made to resolve the default with the 6
owner and the results of any such efforts. 7
(5c) The clerk shall order the hearing continued if the clerk finds that there is good 8
cause to believe that additional time or additional efforts have a reasonable 9
likelihood of resolving the delinquency without foreclosure. In determining 10
whether to continue the hearing, the clerk may consider (i) whether the 11
association has offered the debtor an opportunity to resolve the foreclosure 12
under a payment schedule pursuant to subsection (i) of this section, (ii) 13
whether the association has engaged in actual responsive communication with 14
the owner, including telephone conferences or in-person meetings with the 15
owner or other actual two-party communications, (iii) whether the owner has 16
indicated that he or she has the intent and ability to resolve the delinquency 17
by making future payments under a payment plan, and (iv) whether the 18
initiation or continuance of good-faith voluntary resolution efforts between 19
the parties may resolve the matter without a foreclosure sale. Where good 20
cause exists to continue the hearing, the clerk shall order the hearing continued 21
to a date and time certain not more than 90 days from the date scheduled for 22
the original hearing. Nothing in this part shall limit the authority of the clerk 23
to continue a hearing for other good cause shown. 24
… 25
(g) The provisions of subsection (f) of this section do not prohibit or prevent an 26
association from pursuing judicial foreclosure of a claim of lien, lien securing a debt consisting 27
of sums due the association other than fines and fine-related charges, from taking other actions 28
to recover the sums due the association, or from accepting a deed in lieu of foreclosure. Any 29
judgment, decree, or order in any judicial foreclosure or civil action relating to the collection of 30
assessments shall include an award of costs and reasonable attorneys' fees for the prevailing 31
party, which shall not be subject to the limitation provided in subdivision (f)(12) of this section. 32
(h) A claim of lien securing a debt consisting solely of fines imposed by the association, 33
interest on unpaid fines, or attorneys' fees incurred by the association solely associated with fines 34
imposed by the association or fine-related charges may only be enforced by judicial foreclosure, 35
as provided in Article 29A of Chapter 1 of the General Statutes. the filing of a civil action seeking 36
a judgment. In addition, an association shall not levy, charge, or attempt to collect a service, 37
collection, consulting, or administration fee from any unit owner unless the fee is expressly 38
allowed in the declaration, and any claim of lien securing a debt consisting solely of these fees 39
may only be enforced by judicial foreclosure, as provided in Article 29A of Chapter 1 of the 40
General Statutes.the filing of a civil action seeking a judgment. Liens arising as a result of the 41
entry of a judgment in favor of the association in any such civil action shall relate back and be 42
effective as of the date the claim of lien was filed. 43
…." 44
SECTION 3.(b) This section becomes effective December 1, 2025, and applies to 45
claims of lien filed and instruments presented for registration on or after that date. 46
SECTION 4. G.S. 47C-3-118 reads as rewritten: 47
"§ 47C-3-118. Association records.records and contracts. 48
… 49
(a1) A unit owner or the unit owner's authorized agent is entitled to inspect and copy, at a 50
reasonable time and location specified by the association, any contract entered into by the 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 7
association if the unit owner gives the association written notice of the demand at least five 1
business days before the date on which the unit owner wishes to inspect and copy and the request 2
satisfies the conditions for inspection set forth in G.S. 55A-16-02(c). A demand to inspect made 3
pursuant to this subsection shall be presumed to have been made in good faith and for a proper 4
purpose. In any action to compel the inspection and copying of documents, the court may award 5
reasonable attorneys' fees to the prevailing party. If the association does not allow a unit owner 6
who complies with this subsection to inspect and copy the requested contract, and if a court of 7
competent jurisdiction thereafter enters an order compelling the association to do so, the court 8
shall also order the association to pay the unit owner's costs, including reasonable attorneys' fees, 9
incurred to obtain the order. 10
(b) The association, upon written request, shall furnish a unit owner or the unit owner's 11
authorized agents a statement setting forth the amount of unpaid assessments and other charges 12
against a unit. The statement shall be furnished within 10 business days after receipt of the request 13
and is binding on the association, the executive board, and every unit owner. The association, its 14
managers, or its agents may charge a reasonable fee for providing statements of unpaid 15
assessments and other charges, not to exceed two hundred dollars ($200.00) per statement or 16
request, and an additional expedite expedited fee in an amount not to exceed one hundred dollars 17
($100.00) if the request is made within 48 hours of closing.item is requested to be furnished less 18
than 10 days after receipt of the request. 19
… 20
(d) The association shall keep written records of any policy regarding automatic license 21
plate reader systems adopted pursuant to G.S. 20-183.33. The records shall be made reasonably 22
available for examination by any unit owner and the unit owner's authorized agents." 23
SECTION 5. G.S. 47F-3-102 reads as rewritten: 24
"§ 47F-3-102. Powers of owners' association. 25
Unless the articles of incorporation or the declaration expressly provides to the contrary, the 26
association may do all of the following: 27
… 28
(3) Hire and discharge managing agents and other employees, agents, and 29
independent contractors. A contract between an association and a managing 30
agent shall not have a term exceeding two years and shall not contain an 31
automatic renewal provision that requires the association to give notice of 32
nonrenewal more than 60 days prior to the contract's anniversary date. Any 33
contract with a managing agent that is automatically renewed shall be 34
terminable by the association for any reason upon 90 days' notice. A managing 35
agent shall not be compensated in whole or in part based on the amount of 36
fines collected by the managing agent on behalf of the association. 37
… 38
(6) Regulate the use, maintenance, repair, replacement, and modification of 39
common elements.elements; provided, however, that in the absence of an 40
express authorization in the declaration, an association shall not enforce any 41
restriction on parking of a personal vehicle on a public street, public road, or 42
public right-of-way for which the North Carolina Department of 43
Transportation or local government has assumed responsibility for 44
maintenance and repairs, unless the authority to regulate such parking has 45
been expressly delegated to the association by the Department of 46
Transportation or local government under an agreement prescribing the 47
manner in which the association may exercise that authority. As used in this 48
subdivision, "personal vehicle" means an automobile with a gross weight of 49
less than 26,001 pounds that is used for personal pleasure, travel, or 50
commuting to and from a place of work, and does not include a motor home 51 General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 378-First Edition
or self-propelled recreational vehicle, or an automobile that is otherwise used 1
primarily in connection with any commercial endeavor or business. 2
… 3
(12) After notice and an opportunity to be heard, impose reasonable fines or 4
suspend privileges or services provided by the association (except rights of 5
access to lots) for reasonable periods for violations of the declaration, bylaws, 6
and rules and regulations of the association. No fine shall be levied for 7
violation of a provision restricting or prohibiting tutoring, educational lessons, 8
academic lessons, music lessons, or swimming lessons provided on the 9
owner's lot to a group of no more than five people at any one time, regardless 10
of whether compensation is received for such lessons. 11
… 12
(13a) Impose reasonable charges in connection with the preparation of statements a 13
lender's questionnaire or certification or a statement of unpaid assessments, 14
which must be furnished within 10 business days after receipt of the request, 15
in an amount not to exceed two hundred dollars ($200.00) per statement or 16
request, item requested, and an additional expedite expedited fee in an amount 17
not to exceed one hundred dollars ($100.00) if the request is made within 48 18
hours of closing, all of which item is requested to be furnished less than 10 19
days after receipt of the request. These charges may be collected by the 20
association, its managers, or its agents. Any charge for preparation of a 21
lender's questionnaire or certification shall be billed to the requesting party. 22
Neither the association nor its managing agent shall impose any charge upon 23
a lot owner or a prospective purchaser of a lot in connection with the 24
conveyance of a lot unless the charge is expressly authorized in this 25
subdivision, or unless the charge is authorized in the declaration and is not 26
otherwise expressly prohibited by law. Violation of this subdivision by an 27
association or by its managing agent shall constitute an unfair and deceptive 28
trade practice under G.S. 75-1.1. 29
(13b) Impose a reasonable charge for providing copies of records requested by a 30
member, not to exceed the actual cost of photocopying the records, including 31
the cost of materials used in responding to the request and the cost of shipping 32
if shipping is required. 33
… 34
(15a) Exercise any authority granted to it under the declaration to approve or 35
disapprove any proposed changes on a lot or limited common element. In 36
exercising such authority, the association shall provide a fair, reasonable, and 37
expeditious procedure for making its decision, which procedure shall be set 38
forth in the association's governing documents. The procedures shall state the 39
maximum time for issuance of any decision on a proposal or a request for 40
reconsideration. An association may adopt formal submission requirements 41
for any proposed change, which shall be communicated to the members. A 42
decision shall be made within 90 days after the initial submission of the 43
proposal or submission of any additional information or changes to the 44
proposal requested by the association in response to the initial submission. A 45
decision shall be in writing, shall be made in good faith, and may not be 46
unreasonable, arbitrary, or capricious. If the proposal is disapproved, the 47
decision shall include an explanation of why the proposal is disapproved and, 48
if the determination was not issued by the executive board, a description of 49
the procedure for reconsideration of the decision by the executive board. 50
…." 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 9
SECTION 6. G.S. 47F-3-107.1 reads as rewritten: 1
"§ 47F-3-107.1. Procedures for fines and suspension of planned community privileges or 2
services. 3
Unless a specific procedure for the imposition of fines or suspension of planned community 4
privileges or services is provided for in the declaration, a hearing shall be held before the 5
executive board or an adjudicatory panel appointed by the executive board to determine if any 6
lot owner should be fined or if planned community privileges or services should be suspended 7
pursuant to the powers granted to the association in G.S. 47F-3-102(11) and (12). Any 8
adjudicatory panel appointed by the executive board shall be composed of members of the 9
association who are not officers of the association or members of the executive board. The lot 10
owner charged shall be given notice of the charge, opportunity to be heard and to present 11
evidence, and notice of the decision. A written notice of hearing shall be sent to the unit owner 12
in the manner provided in G.S. 47F-3-116(e) not less than 10 days prior to the scheduled hearing 13
date. The notice of hearing shall specify the date, time, and place of the hearing and shall include 14
a general description of each alleged violation and the action, if any, required to cure each alleged 15
violation. Not less than two days prior to the scheduled hearing date, the executive board or 16
adjudicatory panel shall provide the unit owner with the names of any persons whose testimony 17
it intends to offer in support of the charge and a copy of any documents, photographs, or other 18
exhibits that it intends to submit in support of the charge. The unit owner shall be given an 19
opportunity to be heard and to present evidence at the hearing. A written notice of the decision 20
specifying each violation verified by the evidence and the action, if any, required to cure each 21
verified violation shall be sent to the unit owner in the manner provided in G.S. 47F-3-116(e). If 22
it is decided that a fine should be imposed, a fine not to exceed one hundred dollars ($100.00) 23
may be imposed for the violation and without further hearing, for each day more than five days 24
after the decision that the violation occurs. occurs, up to a maximum fine of two thousand five 25
hundred dollars ($2,500). Such fines shall be assessments secured by liens under G.S. 47F-3-116. 26
If it is decided that a suspension of planned community privileges or services should be imposed, 27
the suspension may be continued without further hearing until the violation or delinquency is 28
cured. The lot owner may appeal the decision of an adjudicatory panel to the full executive board 29
by delivering written notice of appeal to the executive board within 15 days after the date of the 30
decision. The executive board may affirm, vacate, or modify the prior decision of the 31
adjudicatory body." 32
SECTION 7.(a) G.S. 47F-3-116 reads as rewritten: 33
"§ 47F-3-116. Lien for sums due the association; enforcement. 34
(a) Any assessment attributable to a lot which remains unpaid for a period of 30 days or 35
longer shall constitute a lien on that lot when a claim of lien is filed of record in the office of the 36
clerk of superior court of the county in which the lot is located in the manner provided in this 37
section. A claim of lien securing a debt consisting of fines or fine-related charges shall be filed 38
separately from a claim of lien securing other sums due the association and shall be filed within 39
90 days after the date the fine was imposed. As used in this section, "fines or fine-related charges" 40
means fines imposed by the association, interest on unpaid fines, or attorneys' fees incurred by 41
the association related to fines imposed by the association. Once filed, a claim of lien secures all 42
sums due the association through the date filed and any sums due to the association thereafter. 43
Unless the declaration provides otherwise, fees, charges, late charges, and other charges imposed 44
pursuant to G.S. 47F-3-102, 47F-3-107, 47F-3-107.1, and 47F-3-115 are subject to the claim 45
claims of lien provided for under this section as well as any other sums due and payable to the 46
association under the declaration, the provisions of this Chapter, or as the result of an arbitration, 47
mediation, or judicial decision. 48
(b) The association must provide proper notice of delinquent assessments to the lot owner 49
before filing a claim of lien. The association must make reasonable and diligent efforts to ensure 50
that its records contain the lot owner's current physical mailing address. address and current 51 General Assembly Of North Carolina Session 2025
Page 10 Senate Bill 378-First Edition
electronic mailing address. No fewer than 15 days prior to filing the lien, the association shall 1
mail do all of the following: 2
(1) Mail a statement of the assessment amount due by first-class mail to the 3
physical address of the lot and the lot owner's address of record with the 4
association and, if different, to the address for the lot owner shown on the 5
county tax records for the lot. If the lot owner is a corporation or limited 6
liability company, the statement shall also be sent by first-class mail to the 7
mailing address of the registered agent for the corporation or limited liability 8
company. Notwithstanding anything to the contrary in this Chapter, the 9
association is not required to mail a statement to an address known to be a 10
vacant lot on which no dwelling has been constructed or to a lot for which 11
there is no United States postal address. 12
(2) Send a statement of the assessment amount due via electronic mail if the 13
owner has designated an email address as provided in G.S. 55A-1-70(b). 14
(c) A claim of lien shall set forth the name and address of the association, the name of 15
the record owner of the lot at the time the claim of lien is filed, a description of the lot, and the 16
amount of the lien claimed. A claim of lien may also appoint a trustee to conduct a foreclosure, 17
as provided in subsection (f) of this section. The first page of the claim of lien shall contain the 18
following statement in print that is in boldface, capital letters, and no smaller than the largest 19
print used elsewhere in the document: 20
"THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE 21
LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH 22
FORECLOSURE ENFORCEMENT AGAINST YOU AND YOUR PROPERTY IN LIKE 23
MANNER AS A MORTGAGE AS PERMITTED UNDER NORTH CAROLINA LAW." 24
The person signing the claim of lien on behalf of the association shall attach to and file with 25
the claim of lien a certificate of service attesting to the attempt of service on the record owner, 26
which service shall be attempted in accordance with G.S. 1A-1, Rule 4(j), for service of a copy 27
of a summons and a complaint. If the actual service is not achieved, the person signing the claim 28
of lien on behalf of the association shall be deemed to have met the requirements of this 29
subsection if service has been attempted pursuant to both of the following: (i) G.S. 1A-1, Rule 30
4(j)(1)c, d, or e and (ii) by mailing a copy of the lien by regular, first-class mail, postage prepaid 31
to the physical address of the lot and the lot owner's address of record with the association, and, 32
if different, to the address for the lot owner shown on the county tax records and the county real 33
property records for the lot. The association shall also send the owner a copy of the claim of lien 34
and certificate of service by email if the owner has designated an email address as provided in 35
G.S. 55A-1-70(b). In the event that the owner of record is not a natural person, and actual service 36
is not achieved, the person signing the claim of lien on behalf of the association shall be deemed 37
to have met the requirements of this subsection if service has been attempted once pursuant to 38
the applicable provisions of G.S. 1A-1, Rule 4(j)(3) through G.S. 1A-1, Rule 4(j)(9). 39
Notwithstanding anything to the contrary in this Chapter, the association is not required to mail 40
a claim of lien to an address which is known to be a vacant lot on which no dwelling has been 41
constructed or to a lot for which there is no United States postal address. A lien for unpaid 42
assessments is extinguished unless proceedings to enforce the lien are instituted within three 43
years after the filing of the claim of lien in the office of the clerk of superior court. A lien securing 44
a debt consisting of fines or fine-related charges is extinguished unless proceedings to enforce 45
the lien are instituted within one year after the filing of the claim of lien in the office of the clerk 46
of superior court. 47
(d) A claim of lien filed under this section is prior to all liens and encumbrances on a lot 48
except (i) liens and encumbrances, specifically including, but not limited to, a mortgage or deed 49
of trust on the lot, recorded before the filing of the claim of lien in the office of the clerk of 50 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 11
superior court and (ii) liens for real estate taxes and other governmental assessments and charges 1
against the lot. This subsection does not affect the priority of mechanics' or materialmen's liens. 2
(e) The association shall be entitled to recover the court may, in the court's discretion, 3
allow the association to recover the reasonable attorneys' fees and costs it the association incurs 4
in connection with the collection of any sums due. A lot owner may not be required to pay 5
attorneys' fees and court costs until the lot owner is notified in writing of the association's intent 6
to seek payment of attorneys' fees, costs, and expenses. The notice must be sent by first-class 7
mail to the physical address of the lot and the lot owner's address of record with the association 8
and, if different, to the address for the lot owner shown on the county tax records for the lot. The 9
association must make reasonable and diligent efforts to ensure that its records contain the lot 10
owner's current mailing address. Notwithstanding anything to the contrary in this Chapter, there 11
shall be no requirement that notice under this subsection be mailed to an address which is known 12
to be a vacant lot on which no dwelling has been constructed or a lot for which there is no United 13
States postal address. The notice shall set out the outstanding balance due as of the date of the 14
notice and state that the lot owner has 15 days from the mailing of the notice by first-class mail 15
to pay the outstanding balance without the attorneys' fees and court costs. If the lot owner pays 16
the outstanding balance within this period, then the lot owner shall have no obligation to pay 17
attorneys' fees, costs, or expenses. The notice shall also inform the lot owner of the opportunity 18
to contact a representative of the association to discuss a payment schedule for the outstanding 19
balance, as provided in subsection (i) of this section, and shall provide the name and telephone 20
number of the representative. 21
(f) Except as provided in subsection (h) of this section, the association, acting through 22
the executive board, may foreclose a claim of lien securing a debt consisting of sums due the 23
association other than fines or fine-related charges in like manner as a mortgage or deed of trust 24
on real estate under power of sale, as provided in Article 2A of Chapter 45 of the General Statutes, 25
if the assessment remains unpaid delinquency has continued for 90 180 days or more. The 26
association shall not foreclose the claim of lien unless the executive board votes to commence 27
the proceeding against the specific lot. 28
The following provisions and procedures shall be applicable to and complied with in every 29
nonjudicial power of sale foreclosure of a claim of lien, and these provisions and procedures shall 30
control to the extent they are inconsistent or in conflict with the provisions of Article 2A of 31
Chapter 45 of the General Statutes: 32
… 33
(5) After the association has filed a claim of lien and prior to the commencement 34
of a nonjudicial foreclosure, the association shall give to the lot owner notice 35
of the association's intention to commence a nonjudicial foreclosure to enforce 36
its claim of lien. The notice shall contain the information required in 37
G.S. 45-21.16(c)(5a).G.S. 45-21.16(c)(5) and G.S. 45-21.16(c)(5a) and shall 38
specifically reference the lot owner's right of redemption provided under 39
subdivision (8) of this subsection. The notice shall be sent by first-class mail 40
to the physical address of the lot and the lot owner's address of record with the 41
association and, if different, to the address for the lot owner shown on the 42
county tax records for the lot. 43
(5a) The notice of hearing required pursuant to G.S. 45-21.16(a) shall be 44
accompanied by the association's certification of the actions it has taken to 45
give the owner notice of delinquent assessments in compliance with 46
subsection (b) of this section. 47
(5b) At the commencement of the hearing, the clerk shall inquire as to whether the 48
owner occupies the lot as his or her principal residence. If it appears that the 49
owner does currently occupy the lot as a principal residence, the clerk shall 50
further inquire as to the efforts the association has made to communicate with 51 General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 378-First Edition
the owner and to attempt to resolve the matter voluntarily before the 1
foreclosure proceeding. The clerk's inquiry shall not be required if the 2
association has submitted, at or before the hearing, an affidavit briefly 3
describing any efforts that have been made to resolve the default with the 4
owner and the results of any such efforts. 5
(5c) The clerk shall order the hearing continued if the clerk finds that there is good 6
cause to believe that additional time or additional efforts have a reasonable 7
likelihood of resolving the delinquency without foreclosure. In determining 8
whether to continue the hearing, the clerk may consider (i) whether the 9
association has offered the owner an opportunity to resolve the foreclosure 10
under a payment schedule pursuant to subsection (i) of this section, (ii) 11
whether the association has engaged in actual responsive communication with 12
the owner, including telephone conferences or in-person meetings with the 13
owner or other actual two-party communications, (iii) whether the owner has 14
indicated that he or she has the intent and ability to resolve the delinquency 15
by making future payments under a payment plan, and (iv) whether the 16
initiation or continuance of good-faith voluntary resolution efforts between 17
the parties may resolve the matter without a foreclosure sale. Where good 18
cause exists to continue the hearing, the clerk shall order the hearing continued 19
to a date and time certain not more than 90 days from the date scheduled for 20
the original hearing. Nothing in this part shall limit the authority of the clerk 21
to continue a hearing for other good cause shown. 22
… 23
(g) The provisions of subsection (f) of this section do not prohibit or prevent an 24
association from pursuing judicial foreclosure of a claim of lien, lien securing a debt consisting 25
of sums due the association other than fines and fine-related charges, from taking other actions 26
to recover the sums due the association, or from accepting a deed in lieu of foreclosure. Any 27
judgment, decree, or order in any judicial foreclosure or civil action relating to the collection of 28
assessments shall include an award of costs and reasonable attorneys' fees for the prevailing 29
party, which shall not be subject to the limitation provided in subdivision (f)(12) of this section. 30
(h) A claim of lien securing a debt consisting solely of fines imposed by the association, 31
interest on unpaid fines, or attorneys' fees incurred by the association solely associated with fines 32
imposed by the association or fine-related charges may only be enforced by judicial foreclosure, 33
as provided in Article 29A of Chapter 1 of the General Statutes. the filing of a civil action seeking 34
a judgment. In addition, an association shall not levy, charge, or attempt to collect a service, 35
collection, consulting, or administration fee from any lot owner unless the fee is expressly 36
allowed in the declaration, and any claim of lien securing a debt consisting solely of these fees 37
may only be enforced by judicial foreclosure, as provided in Article 29A of Chapter 1 of the 38
General Statutes.the filing of a civil action seeking a judgment. Liens arising as a result of the 39
entry of a judgment in favor of the association in any such civil action shall relate back and be 40
effective as of the date the claim of lien was filed. If, prior to any hearing held pursuant to a civil 41
action filed under this subsection, the lot owner satisfies the debt giving rise to the civil action, 42
the association shall dismiss the civil action and cancel the claim of lien. The lot owner shall 43
have all rights granted under Article 4 of Chapter 45 of the General Statutes to ensure the 44
association's satisfaction of the claim of lien, and the association shall not be entitled to the 45
collection or award of any attorneys' fees or court costs related to the dismissed civil action or 46
cancelled claim of lien. 47
…." 48
SECTION 7.(b) This section becomes effective December 1, 2025, and applies to 49
claims of lien filed and instruments presented for registration on or after that date. 50
SECTION 8. G.S. 47F-3-118 reads as rewritten: 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 13
"§ 47F-3-118. Association records.records and contracts. 1
… 2
(a1) A lot owner or the lot owner's authorized agent is entitled to inspect and copy, at a 3
reasonable time and location specified by the association, any contract entered into by the 4
association if the lot owner gives the association written notice of the demand at least five 5
business days before the date on which the lot owner wishes to inspect and copy and the request 6
satisfies the conditions for inspection set forth in G.S. 55A-16-02(c). A demand to inspect made 7
pursuant to this subsection shall be presumed to have been made in good faith and for a proper 8
purpose. In any action to compel the inspection and copying of documents, the court may award 9
reasonable attorneys' fees to the prevailing party. If the association does not allow a lot owner 10
who complies with this subsection to inspect and copy the requested contract, and if a court of 11
competent jurisdiction thereafter enters an order compelling the association to do so, the court 12
shall also order the association to pay the lot owner's costs, including reasonable attorneys' fees, 13
incurred to obtain the order. 14
(b) The association, upon written request, shall furnish to a lot owner or the lot owner's 15
authorized agents a statement setting forth the amount of unpaid assessments and other charges 16
against a lot. The statement shall be furnished within 10 business days after receipt of the request 17
and is binding on the association, the executive board, and every lot owner. The association, its 18
managers, or its agents may charge a reasonable fee for providing statements of unpaid 19
assessments, not to exceed two hundred dollars ($200.00) per statement or request, and an 20
additional expedite expedited fee in an amount not exceeding one hundred dollars ($100.00) if 21
the request for a statement is made within 48 hours of closing.item is requested to be furnished 22
less than 10 days after receipt of the request. 23
… 24
(d) The association shall keep written records of any policy regarding automatic license 25
plate reader systems adopted pursuant to G.S. 20-183.33. The records shall be made reasonably 26
available for examination by any lot owner and the lot owner's authorized agents." 27
28
PART II. PRELITIGATION MEDIATION 29
SECTION 9.(a) G.S. 7A-38.3F reads as rewritten: 30
"§ 7A-38.3F. Prelitigation mediation of condominium and homeowners owners' association 31
disputes. 32
(a) Definitions. – The following definitions apply in this section: 33
(1) Association. – An association of unit or lot owners organized as allowed under 34
North Carolina law, including G.S. 47C-3-101 and G.S. 47F-3-101. 35
(2) Dispute. – Any matter relating to real estate under the jurisdiction of an 36
association about which the member and association cannot agree. The term 37
"dispute" does not include matters expressly exempted in subsection (b) of 38
this section. 39
(3) Executive board. – The body, regardless of name, designated in the 40
declaration to act on behalf of an association. 41
(4) Mediator. – A neutral person who acts to encourage and facilitate a resolution 42
of a dispute between an association and a member. 43
(5) Member. – A person who is a member of an association of unit or lot owners 44
organized as allowed under North Carolina law, including G.S. 47C-3-101 45
and G.S. 47F-3-101. 46
(6) Party or parties. – An association or member who is involved in a dispute, as 47
that term is defined in subdivision (2) of this subsection. 48
(a1) Disputes related solely to a member's failure to timely pay an association assessment 49
or any fines or fees associated with the levying or collection of an association assessment are not 50
covered under this section. 51 General Assembly Of North Carolina Session 2025
Page 14 Senate Bill 378-First Edition
(b) Voluntary Prelitigation Mediation. – Prior to filing a civil action, the The parties to a 1
dispute arising under Chapter 47C of the General Statutes (North Carolina Condominium Act), 2
Chapter 47F of the General Statutes (North Carolina Planned Community Act), or an 3
association's declaration, bylaws, or rules and regulations are encouraged to initiate mediation 4
pursuant to this section. However, disputes related solely to a member's failure to timely pay an 5
association assessment or any fines or fees associated with the levying or collection of an 6
association assessment are not covered under this section.may agree at any time to mediation of 7
the dispute pursuant to this section. 8
(b1) Mandatory Prelitigation Mediation. – Prior to filing a civil action arising under 9
Chapter 47C of the General Statutes (North Carolina Condominium Act), Chapter 47F of the 10
General Statutes (North Carolina Planned Community Act), or an association's declaration, 11
bylaws, or rules and regulations, a party shall initiate mediation pursuant to this section. If an 12
action is initiated, it shall, upon the motion of any party prior to trial, be dismissed without 13
prejudice by the court unless any one or more of the following apply: 14
(1) The nonmoving party has satisfied the requirements of this section, and this 15
fact is indicated in the mediator's certification issued under subsection (g) of 16
this section. 17
(2) The court finds that a mediator failed to issue a mediator's certification under 18
subsection (g) of this section indicating that the nonmoving party satisfied the 19
requirements of this section. 20
(3) The court finds good cause for a failure to attempt mediation. Good cause 21
includes a determination that the time delay required for mediation would 22
likely result in irreparable harm or that injunctive relief is otherwise 23
warranted. 24
(c) Initiation of Mediation. – Either an association or a member may contact the North 25
Carolina Dispute Resolution Commission or the Mediation Network of North Carolina for the 26
name of a mediator or community mediation center. Upon contacting a mediator, either the 27
association or member may supply to the mediator the physical address of the other party, or the 28
party's representative, and the party's telephone number and e-mail address, if known. The 29
mediator shall contact the party, or the party's representative, to notify him or her the party of the 30
request to mediate. If the parties agree to mediate, they Unless the mediation is waived pursuant 31
to subsection (e) of this section, the parties shall request in writing that the mediator schedule the 32
mediation. The mediator shall then notify the parties in writing of the date, time, and location of 33
the mediation, which shall be scheduled not later than 25 days after the mediator receives the 34
written request from the parties. 35
(d) Mediation Procedure. – The following procedures shall apply to mediation under this 36
section: 37
(1) Attendance. – The mediator shall determine who may attend mediation. The 38
mediator may require the executive board or a large group of members to 39
designate one or more persons to serve as their representatives in the 40
mediation. 41
(2) All parties are expected to attend mediation. The mediator may allow a party 42
to participate in mediation by telephone or other electronic means if the 43
mediator determines that the party has a compelling reason to do so. 44
(3) If the parties cannot reach a final agreement in mediation because to do so 45
would require the approval of the full executive board or the approval of a 46
majority or some other percentage of the members of the association, the 47
mediator may recess the mediation meeting to allow the executive board or 48
members to review and vote on the agreement. 49
(e) Decline Mediation. – Either party to a dispute may decline mediation under this 50
section. If either party declines mediation after mediation has been initiated under subsection (c) 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 15
of this section but mediation has not been held, the party declining mediation shall inform the 1
mediator and the other party in writing of his or her decision to decline mediation. No costs shall 2
be assessed to any party if either party declines mediation prior to the occurrence of an initial 3
mediation meeting.Waiver of Mediation. – The parties to a dispute may agree to waive mediation 4
required by this section by informing the mediator of the waiver in writing. 5
(f) Costs of Mediation. – The costs of mediation, including the mediator's fees, shall be 6
shared equally by the parties unless otherwise agreed to by the parties. Fees shall be due and 7
payable at the end of each mediation meeting. A mediator may charge a reasonable fee, as 8
applicable, to prepare a mediator's certification required under subsection (g) of this section when 9
parties to a dispute agree to waive mediation pursuant to subsection (e) of this section or when 10
one or more parties failed or refused without good cause to attend the mediation meetings or 11
otherwise participate in the mediation. When an attorney represents a party to the mediation, that 12
party shall pay his or her the attorneys' fees. 13
(g) Certification That Mediation Concluded. – Upon a waiver of the mediation under 14
subsection (e) of this section or upon the conclusion of mediation, the mediator shall prepare a 15
certification stating the date on which the mediation was concluded and a statement of the general 16
results of the mediation, including, as applicable, that the parties waived the mediation, that an 17
agreement was reached or reached, that mediation was attempted but an agreement was not 18
reached. reached, or that one or more parties failed or refused without good cause to attend the 19
mediation meetings or otherwise participate in the mediation. If both parties participate in 20
mediation and a cause of action involving the dispute mediated is later filed, either party may file 21
the certificate with the clerk of court, and the parties shall not be required to mediate again under 22
any provision of law. The Supreme Court may adopt additional rules and standards to implement 23
this section, including an exemption from the provisions of G.S. 7A-38.1 for cases in which 24
mediation was attempted under this section. The sanctions in G.S. 7A-38.1(g) do not apply to 25
prelitigation mediation conducted under this section. 26
… 27
(j) Association Duty to Notify. – Each association shall, in writing, shall notify the 28
members of the association each year annually in writing that they may initiate mediation under 29
this section to try to resolve a dispute with the association. The association shall publish the 30
notice required in this subsection on the association's Web site; but if the association does not 31
have a Web site, the association website or it shall publish the notice at the same time and in the 32
same manner as the names and addresses of all officers and board members of the association 33
are published as provided in G.S. 47C-3-103 and G.S. 47F-3-103." 34
SECTION 9.(b) This section becomes effective October 1, 2026, and applies to 35
actions filed on or after that date. 36
37
PART III. DEPARTMENT OF JUSTICE TO COLLECT AND REPORT ON OWN ERS' 38
ASSOCIATION COMPLAIN TS 39
SECTION 10.(a) Article 1 of Chapter 114 of the General Statutes is amended by 40
adding a new section to read: 41
"§ 114-8.8. Collection and report of owners' association complaint data. 42
(a) The Department of Justice shall receive and record data from all complaints 43
concerning disputes between associations of unit owners or lot owners and their members as 44
required by this section. The Department of Justice shall publish a complaint form providing for 45
electronic submission of those complaints on its website. When the Department receives a 46
complaint via phone, mail, or online submission, it shall collect the following information from 47
the complainant: 48
(1) The name and contact information of the complainant. 49
(2) Whether the complainant is an association of unit owners or lot owners, or is 50
a unit owner or lot owner belonging to those associations. 51 General Assembly Of North Carolina Session 2025
Page 16 Senate Bill 378-First Edition
(3) The name and contact information of the other party or parties to the dispute 1
giving rise to the complaint. 2
(4) The name, address, and contact information of the association management 3
company, if any, involved in the dispute. 4
(5) Details on whether the association member involved in the dispute (i) was 5
informed of the requirement of membership in the association as a condition 6
of unit or lot ownership and, if so informed, when and by whom, (ii) received 7
a copy of the governing documents of the association before obtaining title to 8
the property, (iii) was denied access to the association's governing documents, 9
and (iv) understood the rights and obligations of owners and the association 10
under the governing documents. 11
(6) The nature of the complaint. 12
(7) The background information regarding the dispute, including whether the 13
member and association communicated about the dispute and whether all 14
other remedies available under the association's governing documents were 15
exhausted before the complaint was made. 16
(8) The complainant's understanding of the rights and obligations under the 17
association's governing documents as they relate to the dispute. 18
(9) The complainant's desired remedy regarding the dispute. 19
(b) Upon receiving the complaint, the Department shall provide a copy of the complaint 20
to the party complained against informing the party of the complaint made against it and allowing 21
for the party to respond. 22
(c) The Department shall publish the following information on its website: 23
(1) Information on the process to submit complaints pursuant to this section. 24
(2) Information about the laws and documents governing associations of unit 25
owners and lot owners in North Carolina. 26
(3) General information about roles, rights, and responsibilities of associations of 27
unit owners and lot owners, their members, and other related parties. 28
(4) Any other information the Department deems relevant to understanding the 29
rights and obligations of associations of unit owners and lot owners and 30
members of such associations. 31
(d) The Department is prohibited from promulgating regulations or issuing guidelines 32
concerning the administration, governance, or governing documents of associations of unit 33
owners or lot owners. The Department shall not serve as an arbiter in disputes between an 34
association of unit owners or lot owners and its members. 35
(e) By July 1 of each year, the Department shall submit a report to the House Standing 36
Committee on Commerce and Economic Development, the Senate Standing Committee on 37
Commerce and Insurance, and the Fiscal Research Division and shall also publish the report on 38
its website. The report shall include, at a minimum, a summary of all of the following: 39
(1) The total number of complaints received pursuant to this section. 40
(2) The number of those complaints submitted by unit owners or lot owners. 41
(3) The number of those complaints submitted by associations of unit owners or 42
lot owners. 43
(4) The number of complaints originating in each county of this State. 44
(5) The number of complaints that involved association management companies. 45
(6) The nature of the disputes reflected in the complaints, including: 46
a. Access to association records. 47
b. Access to executive board meetings. 48
c. Assessments. 49
d. Executive board transparency. 50
e. Fines. 51 General Assembly Of North Carolina Session 2025
Senate Bill 378-First Edition Page 17
f. Collections of delinquent accounts. 1
g. Liens. 2
h. Foreclosures. 3
i. Content of restrictive covenants. 4
j. Enforcement of restrictive covenants. 5
(7) A ranking of the top five disputes based on the nature of the dispute reflected 6
in the complaints. 7
(8) The number of responses to the complaints received by the Department. 8
The information summarized in the report must be categorized, filterable, and searchable. The 9
Department must redact any personal or private information from the report, such as names, 10
addresses, and telephone numbers of individuals. This redaction requirement does not apply to 11
information concerning a homeowners association or a homeowners association management 12
company." 13
SECTION 10.(b) This section becomes effective July 1, 2025. 14
15
PART IV. ASSOCIATION USE OF AUTOMATIC LI CENSE PLATE READER 16
SYSTEMS 17
SECTION 11.(a) Article 3D of Chapter 20 of the General Statutes is amended by 18
adding a new section to read: 19
"§ 20-183.32B. Use of automatic license plate reader systems by certain private 20
associations. 21
(a) Definitions. – The following definitions apply to this section: 22
(1) Association. – Either (i) an owner's association organized under 23
G.S. 47F-3-101 or (ii) a unit owner's association organized under 24
G.S. 47C-3-101. 25
(2) Lot owner. – As defined in G.S. 47F-1-103. 26
(3) Unit owner. – As defined in G.S. 47C-1-103. 27
(b) An association shall not operate an automatic license plate reader system without first 28
doing all of the following: 29
(1) Notifying a local law enforcement agency of the association's intent to begin 30
using the system at least 30 days before the system is operational. 31
(2) Providing a local law enforcement agency ongoing access to the system. 32
(3) Notifying all lot owners or unit owners of the association's intent to begin 33
using the system at least 30 days before the system is operational. 34
(4) Adopting a written policy governing the system's use before the automatic 35
license plate reader system is operational. The policy shall address all of the 36
following: 37
a. Data retention. The data retention policy adopted pursuant to this 38
subdivision shall provide that captured plate data will not be retained 39
for longer than 30 days unless a law enforcement agency requests that 40
specific data be retained for a longer duration, in accordance with 41
G.S. 20-183.32. 42
b. Training of automatic license plate reader system operators. 43
c. Supervisory oversight of automatic license plate reader system use. 44
d. Internal data security and access. 45
e. Annual or more frequent auditing to ensure proper operation of the 46
system. 47
f. Maintenance and calibration of the system, as recommended by the 48
system's manufacturer. 49
g. Annual or more frequent notifications to lot owners or unit owners if 50
the association continues to operate the system. 51 General Assembly Of North Carolina Session 2025
Page 18 Senate Bill 378-First Edition
(c) Data obtained by an association in accordance with this section shall be accessed, 1
disclosed, preserved, or retained only for the purpose of assisting law enforcement agencies in 2
connection with a law enforcement purpose. Notwithstanding, data obtained under the authority 3
of this section shall not be used for the enforcement of traffic violations." 4
SECTION 11.(b) This section becomes effective October 1, 2025. 5
6
PART V. EFFECTIVE DATE 7
SECTION 12. Except as otherwise provided, this act is effective when it becomes 8
law. The provisions in Sections 1 and 5 of this act relating to managing agent compensation apply 9
to contracts between an association and a managing agent entered into on or after January 1, 10
2026. 11