Who is in a Homeowner’s Association (and who is not)
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I recently had a complaint from any owner who was being assessed by a homeowner’s association for annual dues. He explained that he never agreed to be in a homeowner’s association and didn’t consider his property to be within the area governed by the homeowner’s association. Therefore, the HOA had no power to assess him or his property.
In investigating his case, I had to look at several issues. First, does he own the property and what does the deed say? The first part seems to be common sense, but I have had people who were assessed who were renters. (In that case, all they needed to do is send the bill to the landlord). Assuming he is the owner, the typical deed is a general warranty deed. This type of deed gives the property to the person buying (the “grantee”) all the rights in the property and “warrants” that the property is the seller’s (the “grantor”) to sell or give. Usually, there is a small clause in the deed that says that the deed gives all rights except for other rights and reservations of record. “Of record” means if there is a filing with the county register of deeds office that gives some other right to another person or entity. This will include easements to allow utility companies to put wires over your property or possibly the driveway your neighbor behind you uses to get to the street. It also includes the declarations or covenants of a planned community. So looking at a general warranty deed wouldn’t tell you if your property is in a planned community with a homeowner’s association governing it, but that exception means that even if you didn’t know it, you are still bound.
Therefore, the next step is to find the recorded declarations or covenants for the planned community and check when they were filed. If they were filed after the owner got his deed, then he would not be subject to the declarations but if they were filed before, he may still be on the hook. The declarations usually refer to the plat or map of the community and the deed or deeds that gave the property to the developer. The map as well as those prior deeds are also filed with the register of deeds. Unless you are a surveyor, or have an intimate knowledge of the history of the property, it is difficult to follow the written descriptions in a deed, but the map or plat is usually easier to read. If the property is listed on that map and in the deeds it is subject to the declarations. In this particular case, my owner was correct. While all the property around him was within a planned community, his house and lot was left off the plat and off the developer deeds. It appeared the historical use of the property was a large tobacco farm. The farmland was bought, subdivided and sold as lots in the subdivision, but he had the original farmhouse that was never sold to the developer.
Had my client’s lot appeared on the recorded plat, then he would be within the planned community and governed by the declarations. Usually those declarations provide for a homeowner’s association who has the authority and power to manage the planned community after the developer has moved on. So once it is established that you are in a planned community, you look at the declarations and the North Carolina statutes to determine what assessments and other powers are allowed.
–Bradley A. Coxe is a practicing attorney in Wilmington, NC with Hodges & Coxe PC who specializes in Personal Injury, Medical Malpractice, Homeowner's Associations, Contract and Real Estate disputes and all forms of Civil Litigation. Please contact him at (910) 772-1678.
