“Are you SURE they can do that?” — The Powers of a Homeowners Association

The standard powers of a HOA
under N.C.G.S. Chapter 47C and 47F are fairly broad and usually consist of the enumerated powers
contained in those statutues, including:

• Adopt and amend
  bylaws and rules and regulations;
• Adopt and amend
  budgets for revenues, expenditures, and reserves and collect assessments for
  common expenses from lot owners;
• Hire and
  discharge managing agents and other employees, agents, and independent
  contractors;
• Institute,
  defend, or intervene in litigation or administrative proceedings on matters
  affecting the planned community;
• Make contracts
  and incur liabilities;
• Regulate the use,
  maintenance, repair, replacement, and modification of common elements;
• Cause additional
  improvements to be made as a part of the common elements;
• Acquire, hold,
  encumber, and convey in its own name any right, title, or interest to real or
  personal property, provided that common elements may be conveyed or subjected
  to a security interest only pursuant to G.S. 47F-3-112;
• Grant easements,
  leases, licenses, and concessions through or over the common elements;
• Impose and
  receive any payments, fees, or charges for the use, rental, or operation of the
  common elements other than the limited common elements and for services
  provided to lot owners;
• Impose reasonable
  charges for late payment of assessments, not to exceed the greater of twenty
  dollars ($20.00) per month or ten percent (10%) of any assessment installment
  unpaid and, after notice and an opportunity to be heard, suspend privileges or
  services provided by the association (except rights of access to lots) during
  any period that assessments or other amounts due and owing to the association
  remain unpaid for a period of 30 days or longer;
• After notice and
  an opportunity to be heard, impose reasonable fines or suspend privileges or
  services provided by the association (except rights of access to lots) for
  reasonable periods for violations of the declaration, bylaws, and rules and
  regulations of the association;
• Impose reasonable
  charges in connection with the preparation and recordation of documents,
  including, without limitation, amendments to the declaration or statements of
  unpaid assessments;
• Provide for the
  indemnification of and maintain liability insurance for its officers, executive
  board, directors, employees, and agents;
• Assign its right
  to future income, including the right to receive common expense assessments;
• Exercise all
  other powers that may be exercised in this State by legal entities of the same
  type as the association; and
• Exercise any
  other powers necessary and proper for the governance and operation of the
  association.

          The powers themselves are mostly exercised by the HOA’s Board
of Directors. Other than elect its members, amend the declarations or bylaws,
or determine the qualifications and terms of the directors, the Board is
empowered to exercise all the powers of the HOA. The directors typically elect
the officers of the HOA. The directors and officers have a legal fiduciary duty
to act in good faith and loyalty to the HOA.

–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.