“How do we pay for that?” — Assessments and Fees for Homeowners Associations

Annual assessments for homeowners associations should be
calculated to satisfy the budget and are shared equally among the homeowners
pursuant to the allocations set forth in the declarations. Special assessments
can also be passed pursuant to the declarations for larger or unexpected items,
such as capital improvements or catastrophic damage. The better practice is to
maintain and fund reserves for known large future expenses, such as painting,
parking lot repair, new condominium roofs, etc. Other assessments can be
limited to a few or a single homeowner where damage or expense is done to a
common element that only a limited number of homeowners have access to, such as
a firewall, or where a common element is damaged by the negligent or
intentional acts of a homeowner. Late fees not to exceed $20 per month or 10%
of the unpaid assessment can be imposed on unpaid Assessments.

          Fees for services, collections, consulting or other
administrative tasks cannot be levied against homeowners unless it is
specifically set forth in the declarations. Fees also cannot be assessed in a
home sale as a “transfer fee” although the HOA can charge a reasonable amount
for any recordation and preparation of documents requested to close the home
sale. Legal fees can be assessed under the Acts for any lien put on the
property for failure to pay assessments, fees or fines, provided written notice
is given.

          Fines are also allowed for the violation of the
declarations, bylaws or rules and regulations as long as they are reasonable
and the homeowner has been provided notice and given an opportunity to be heard
on the issue. In addition to fines, the HOA can limit or remove access to
common elements, such as a swimming pool or clubhouse, for violations.   

–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.