Are HOAs allowed to ban street parking in NC neighborhoods? Here’s what legal experts say

Homeowners’ associations (HOAs) in North Carolina are stirring debate over their power to enforce street parking bans, a common rule designed to address safety and aesthetic concerns. Recent discussions on social media platforms like Nextdoor highlight divided opinions, with some residents frustrated by restrictions that limit parking options for families or guests, while others advocate stricter enforcement to avoid street clutter and safety hazards.

Under the North Carolina Planned Community Act, HOAs established after 1999 have the authority to regulate parking, even on public streets, if outlined in their community’s restrictive covenants (CCRs). Legal experts note that these rules aim to maintain order, but they are often contentious among residents.

A proposed bill could change this dynamic by prohibiting HOAs from enforcing parking rules on public roads maintained by the state or local governments, regardless of what is stated in the CCRs. If passed, this legislation would limit HOA authority and potentially resolve ongoing conflicts.

Source: The Charlotte Observer

Myrtle Beach says they lose millions converting short-term rentals. Here’s how much

A recent report by Arnett Muldrow & Associates presented to Myrtle Beach officials warns of significant revenue losses if short-term rentals are converted to long-term use. The analysis, revealed on October 1, 2024, estimates that such conversions could cost Myrtle Beach $1.51–$2.52 million annually in lost taxes and fees, with combined losses for the city, Horry County, and South Carolina ranging from $4.58–$7.78 million. If 1,000 rental units were converted, the total impact could reach $7.61 million.

The report also highlighted increased costs for fire and police services in long-term rental areas and projected 48 job losses. Myrtle Beach had imposed a moratorium on conversions in April 2024 to assess financial impacts, covering properties near the beach. The freeze expires in January 2025, with no decision yet on an extension.

Key recommendations include creating an overlay district to manage conversions, updating zoning codes, and allowing long-term rentals in multi-family residential zones while excluding hotels and motels. However, the study’s scope was limited and excluded many property types, leaving unanswered questions about the broader economic effects and hotel room supply.

Critics argue the region’s evolving year-round economy might offset losses, but the city’s tax structure, reliant on tourism, suggests otherwise. The findings align with earlier projections of a $5.7 million economic impact loss.

Source: The Sun News

The Cockaboose Corp. is the coolest HOA ever — and it’ll throw a yellow flag if needed

The Cockabooses are a unique set of 22 retrofitted railcars turned into luxury tailgating suites near the University of South Carolina’s Williams-Brice Stadium. Created in 1990 by Ed and Cathy Robinson, these iconic cabooses sell for upwards of $220,000 today and are governed by a homeowners association (HOA) called The Cockaboose Corp.

The HOA oversees external maintenance, enforces rules (like prohibiting signage and rentals), and plans for costly future repairs, such as repainting. Annual dues recently spiked to $5,000 to cover these expenses. Quarterly board meetings also address issues like trademark rights and game-day logistics. Owners, often wealthy USC alumni or enthusiasts, view Cockabooses as more than investments—they symbolize prestige and the ultimate tailgating experience. Despite the challenges of managing HOA duties, owners cherish the joy and exclusivity of hosting in these legendary spaces.

Source: TheState.com

War over windows: Charlotte homeowner wins 5-year fight with HOA, gets $75K settlement

Sherry Loeffler won a rare legal settlement against her HOA in Lake Wylie, ending a five-year dispute over vinyl windows installed in her townhome. Despite receiving $75,000 and keeping her windows, the ordeal cost her financially and emotionally. The HOA fined her nearly $12,000, placed a lien on her house, and threatened foreclosure, prompting Loeffler to sue.

The case highlights growing tensions between homeowners and HOAs in North Carolina, where foreclosure actions by HOAs have increased. Loeffler’s victory included canceled fines and legal fee reimbursements, but she endured significant stress and financial hardship. She advises homeowners to document everything when dealing with HOAs.

The HOA board, citing complaints about property values and mismatched windows, expressed frustration over the drawn-out dispute but aims to move on. Loeffler, disillusioned by the experience, plans to relocate to a community without an HOA.

Source: The Charlotte Observer

Legal Tips for HOAs and Condos Following a Natural Disaster

This article was originally published on October 3, 2024 by Jim Slaughter in HOA & Condo Associations Real Estate Blog for Law Firm Carolinas.

Law Firm Carolinas Blog

Whenever a natural disaster strikes–whether hurricane, flood, tornado–our office is inundated with calls from HOAs and condo associations on how to move forward. That’s a difficult question to answer globally, as no one size fits all. Community associations vary. Condominiums, townhomes, and single family homes are owned differently and have different responsibilities. Governing documents, such as declarations or bylaws, also have different wording on who is responsible for maintenance of certain items. As a result, while this article can’t provide legal advice for a specific association, here are tips to consider.

(1) Prevent further damage. Almost without exception, associations are responsible for maintaining and repairing the common elements. That means doing what is necessary to prevent further damage, whether putting a tarp on a damaged roof or removing water damaged belongings from a clubhouse. The association should consider similar action over items it may be responsible for under Declaration provisions, even if not owned by the association.

(2) Make an insurance claim on the appropriate policy. We are regularly asked by associations or owners whether to file a claim for damages with insurance. If there is significant damage, almost always the answer is “yes.” Both the association and owners should contact their respective insurance agents. What is there to lose? After all, it’s not the responsibility of the policyholder to figure out whether specific damages are covered or not. That’s the carrier’s responsibility.

In addition, there could be coverage even if it’s not known or readily apparent. For instance, many associations and homeowners damaged by the recent flooding will likely discover they have no flood insurance because they weren’t in a designated FEMA flood zone. Before deciding not to report a loss, however, recognize that certain damages might be covered by other provisions of the policy. Even association policies without flood coverage might have provisions covering water/sewer backup or business income and extra expense coverage, which might help depending on the specific circumstances. While there is no guarantee specific damage will be covered, you just won’t know unless you file a claim.

“Filing on the appropriate policy” refers to the policy that would cover a particular situation. For instance, all associations should have hazard (or “property”) insurance on common areas owned by the association. As a result, damage to the association’s property should be filed with the association’s insurance. Homeowners are often responsible for insurance on their own lots or units, but that can vary in condominiums and townhomes.

We are also often asked what to do if an owner demands that a claim be filed on an association policy that covers the homeowner, such as a condominium or some townhomes. If an owner is an insured under the association’s policy and demands that a claim be filed, it should generally be filed. (If damages are well below the deductible, sometimes claims are not filed, but recognize that unknown or additional damages could greatly increase the claim.) Insurance exists to help those damaged recover from awful situations, and it is far better to make a claim that may not be covered than to refuse an owner the right to possibly obtain insurance proceeds.

(3) Determine who is responsible for specific maintenance and repair within the association. The most common questions we receive after any disaster are who is responsible for specific repairs/maintenance work and, if it’s the association, can any amounts benefiting a specific owner be charged back to that owner. Again, the answer depends. Basic real estate law is that property owners must deal with what is on their property. For instance, if in North Carolina a lot owner’s tree falls across their yard and onto the association’s road, each is responsible for the part of the tree on their property. That is, the lot owner is responsible for the portion of the tree in their yard, and the association is responsible for the portion of the tree on its common property. A state statute as to community associations even provides that, except as the declaration may provide otherwise, “the association is responsible for causing the common elements to be maintained, repaired and replaced” and “each lot owner is responsible for the maintenance and repair of his lot and any improvements.” Where things get complicated is that declarations sometime contractually re-allocate either (a) the responsibility for doing the work or (b) the cost of the work. And if insurance is involved, such as when a tree hits a building or fence, the normal rules may go out the window. As a result, a review of the governing documents should be made as soon as possible to determine who is responsible for what within the association.

(4) Carefully review new contracts. Following any disaster, there will be innumerable contracts for every imaginable type of work: storm debris cleanup, tree removal, reconstruction of buildings, roof replacement, and many more. Service providers should of course be competent and experienced, and when possible, familiar with and worked with community associations. You may wish to review the Community Association’s Institute’s Directory of Credentialed Professionals and Professional Services Directory.

During the hectic circumstances following a natural disaster, it’s understandable that some of these agreements might be handshake-type oral contracts, rather than in writing. For very small contracts, that might be fine. However, there is an accurate saying that “an oral contract isn’t worth the paper it’s written on.”

Contracts of substance should be in writing and reviewed by an attorney. Certain provisions should be included or the agreement will be lacking in the event of a later dispute. At a minimum, any contract should be clear as to:

  • who the parties entering into the agreement are

  • the terms of the agreement

  • what is or is not a breach of the contract

  • what “consideration” or money is being exchanged

  • by when the contract must be completed

  • how to terminate the contract

  • that the vendor is insured, and

  • remedies in the event of a default by either side.

Depending on circumstances, a dispute resolution provision, such as arbitration or mediation, might be warranted. While contracts will vary depending on the circumstances and scope of work, the main theme here is that in the rush to get things done, don’t forgo making certain that all contracts are in the best interests of the association and legally binding.

(5) Evaluate existing contracts that can’t be fulfilled. In addition to concerns about new contracts, the association may have existing contracts that can’t be performed due to damage of property or even destruction of buildings. As to considerations in such instances, see this recent article: Collections, Force Majeure and Other Contractual Considerations Post-Hurricane Helene 

(6) Consider how to pay for things. As mentioned above, make an insurance claim. Another question we are regularly asked is whether community associations are eligible to receive FEMA aid. HOAs and condos are NOT generally eligible for FEMA assistance, but the Governor can request such a designation. Law Firm Carolinas’ partner Harmony Taylor is Chair of the NC Legislative Action Committee (NC-LAC). The Community Associations Institute (CAI) and the NC-LAC have already requested that NC Governor Cooper make such a designation. They are following this situation closely and have also been in touch with both of North Carolina’s U.S. Senators about additional aid. However, FEMA does not tend to do or reimburse for necessary work in associations. Debris removal, even when approved, must normally be done in coordination with local municipal authorities as part of local municipal debris removal efforts. Critical infrastructure repairs, such as private roads or lakes, tend to fall to the association, but assistance can sometimes be found from other places, whether insurance, a Small Business Administration disaster grant or loan, or the NC Department of Public Safety.

As to such issues, CAI has a Disaster Recovery Resources page with useful information and links as well as a page that updates advocacy efforts at Supporting Community Associations Affected by Hurricane Helene.

If not covered by insurance or any governmental entity, association expenses tend to fall to the association (and thus, its members). However, associations as nonprofits don’t tend to have extra money sitting around. If an association doesn’t have cash on hand to cover such expenses, other possibilities include a special assessment, if permitted, or a community association loan. For more thoughts on such options, see these past articles: Help, Our HOA (or Condo Association) Needs Money! and Association Loans: What You Need to Know.

(7) Don’t forget the “community” in community associations. Following a crisis, it’s easy to get focused on the responsibilities and legal duties of the association. Don’t forget that owners are hurting as well. Given a particular HOA or condo’s circumstances, a community association might provide information on available resources or news updates, provide shelter or aid, or encourage community spirit, whether through neighborhood storm-related clean-ups or social gatherings.

(8) Prepare for the next disaster. Some associations prepare a “pre-disaster loss plan,” which outlines the actions that will be taken in the event of certain circumstances. If such a plan already exists, it will address some of the issues above. If your association has not thought about plans in the event of a disaster, if should. If recent storms, wildfires, earthquakes and other weather-related events have taught us anything, it’s that natural disasters are a matter of “when,” not “if.”

The path following any natural disaster is long. We wish strength and fortitude to the associations, owners, and professionals working through this difficult situation.

Jim Slaughter is past President of the College of Community Association Lawyers and the North Carolina Chapter of the Community Associations Institute. For questions about any HOA/condo related matter, contact a community association attorney at Law Firm Carolinas’ North or South Carolina offices.

Jim Slaughter

Law Firm Carolinas, LLC

I’ve owned my North Carolina townhouse since 2023 — but now my HOA is charging me $13K for hailstorm damage that happened 2 years before I bought. What are my legal options?

When buying a home within an HOA, you're responsible for costs, including any special assessments imposed after you move in, even if the damage occurred before your purchase. Homeowners insurance may cover these costs if you have loss assessment coverage, but if not, you could be left paying out of pocket or negotiating a payment plan with the HOA.

Read More: MSN Moneywise

Editors Note: When owning a home in a planned community, even though the association is responsible for certain maintenance duties, other issues, such as storm damage, may fall on the homeowner. In these communities, homeowners typically carry their own insurance and are responsible for making repairs related to covered perils and/or items not designated as the association’s responsibility. Additionally, homeowners may be responsible for costs like special assessments imposed after they move in, even if the damage occurred before their purchase. It’s important to check your covenants and policies carefully, particularly to understand your maintenance responsibilities and to see if you have loss assessment coverage, which may help cover the costs, in some instances. While this may seem onerous, when compared to buying a single-family home, the same or similar risks and responsibilities generally exist in both situations.

North Carolina Hurricane Helene Homeowner Resources

This article was originally published on October 15, 2024 by Community Association Institute in Disaster Recovery Resources webpage for Community Association Institute.

Community Association Institute- Disaster Recovery Resources

The devastation from Hurricane Helene has impacted communities of all sizes and types in North Carolina. CAI supports those communities recovering from this deadly storm and working to remove physical hazards in the way of recovery efforts. CAI has gathered the below information on current state, local, and federal resources to assist with the difficult task of rebuilding and recovering, online at: https://www.caionline.org/disaster-recovery-resources/.

FEMA continues to prioritize recovery efforts, including search and recovery, shelter, power, water, and other critical resources for hospitals, first responders, and those with life-threating circumstances.

IMMEDIATE DEBRIS REMOVAL

North Carolina Updated Disaster Declaration Highlights Debris Removal for Community Associations

Debris removal has been approved for Emergency Protective Measures (Category B)

Emergency protective measures conducted before, during, and after an incident are eligible if the measures:

• Eliminate or lessen immediate threats to lives, public health, or safety; OR

• Eliminate or lessen immediate threats of significant additional damage to improved public or private property in a cost-effective manner.

Community associations must work with the local municipal authorities to coordinate debris removal on public and private roads. All public and private roads should be covered under the local municipal debris removal efforts. It is important to note that community associations will not be reimbursed by FEMA or the locality for debris removal. The community MUST allow the locality to remove the debris (on both private and public roads).

For private roads, communities will be required to:

(a) Authorize the locality to remove the debris

(b) Indemnification FEMA and the locality from claims raised by debris removal.

NOTE: Communities seeking FEMA support for debris removal MUST work with their local municipality. FEMA does not provide money to community associations for debris removal. FEMA provides support and funding to the local municipality.

Common Area Critical Infrastructure Repairs

Community Association Critical Repairs of Common Area Infrastructure: Once communities move to phase II of recovery – following efforts related to life-safety – communities should:

· For removal of debris in and out of the community, that is considered life safety, contact the local municipality and coordinate debris removal.

· For other issues, not life threatening:

o Contact your insurance carrier to explore coverage.

o Contact the U.S. Small Business Association to inquire about low interest disaster loans and/or grant programs - https://www.sba.gov/funding-programs/disaster-assistance/hurricane-helene

o Contact the North Carolina Dept. of Public Safety - https://www.ncdps.gov/our-organization/emergency-management/hurricane-helene#Safety-8279

Individual Homeowner Resources

FEMA can provide individual assistance to condo owners and homeowners of housing cooperatives and single-family homes for their owner-occupied units in federally declared disaster areas.

However, FEMA will not help with damaged common areas or items that are the responsibility of the condominium association, housing cooperative, or homeowners association. Homeowners who rent out their units may not be eligible for FEMA assistance.

To qualify for FEMA assistance, you must:

· Be a U.S. citizen, non-citizen national, or qualified non-citizen

· Provide proof of identity and occupancy

· Provide proof of ownership for your home

· Have a primary residence in a disaster area that you can't access or live in

· Have no insurance or have filed a claim that doesn't cover all your losses

You can apply for FEMA assistance by: Visiting DisasterAssistance.gov, Using the FEMA mobile app, Calling the FEMA helpline at (800) 621-3362, and Visiting a Disaster Recovery Center.

You can expect FEMA assistance to last for up to 18 months after the disaster declaration, but it may be extended in some cases.

State Resources

North Carolina State Information and Resource Pages:

• North Carolina Department of Public Safety Hurricane Helene Resources Page- https://www.ncdps.gov/our-organization/emergency-management/hurricane-helene

• North Carolina Board of Elections Information Page- https://www.ncsbe.gov/voting/upcoming-election/helene-recovery-and-voting

• North Carolina Department of Insurance Hurricane Helene Information Page- https://www.ncdoi.gov/hurricane-helene-response-and-recovery

• North Carolina Department of Health and Human Services Hurricane Helene Resources Page- https://www.ncdhhs.gov/assistance/hurricane-helene-recovery-resources

List of counties included in Governor Cooper’s Major Disaster Declaration (click for designated website with disaster resources/updates, if available): Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Catawba, Clay, Cleveland, Gaston, Haywood, Henderson, Jackson, Lincoln, Macon, Madison, McDowell, Mecklenburg, Mitchell, Polk, Rutherford, Swain, Transylvania, Watauga, Wilkes and Yancey

How to Apply for FEMA Assistance Press Release: https://governor.nc.gov/news/press-releases/2024/09/29/how-apply-fema-assistance-after-hurricane-helene

Federal Resources

FEMA-designated disaster areas in North Carolina: https://www.fema.gov/disaster/4827/designated-areas

FEMA has an information page for each state impacted by Hurricane Helene with a map showing the areas recognized as disaster areas:

Alabama- https://www.fema.gov/disaster/3618/designated-areas

Florida- https://www.fema.gov/disaster/3615/designated-areas

Georgia- https://www.fema.gov/disaster/3616/designated-areas

North Carolina- https://www.fema.gov/disaster/3617/designated-areas

South Carolina- https://www.fema.gov/disaster/3619/designated-areas

FEMA also has a general landing page for Hurricane Helene with links to relevant resources and state agencies: https://www.fema.gov/disaster/current/hurricane-helene.

Federal Disaster Assistance Resources: https://www.disasterassistance.gov/

Source: Community Association Institute (CAI)

Construction prep begins on $18M downtown Greenville luxury condo development

Construction will begin this year on The Avant, an $18 million luxury condo development in downtown Greenville, slated for completion in summer 2026. The four-story building at 702 S. Main St. will feature an 84-foot water installation, an automated parking system, and locally designed architecture, with a focus on sustainability and efficient use of space. Despite initial delays due to rising construction costs, the project advanced through value engineering to optimize both cost and design.

Source: GSA Business Report

‘It’s not fair’: South Strand parents of children playing sports in community area issued cease and desist from HOA

In the Creekhaven community of Murrells Inlet, South Carolina, tensions have escalated between parents over kids playing sports in a common grassy area. Some parents received a cease and desist letter from the HOA, claiming the area is "not for organized sports," while others argue the games are informal and beneficial for the children. Despite some neighbors' concerns about growing numbers of kids and potential disruptions, many hope for a resolution that allows the children to continue playing outside.

Source: WMBF News

A regressive HOA made up a rule and then tried to take away this family's home — so they fought back in court

A Raleigh, North Carolina family won a four-year legal battle against their HOA, allowing them to keep solar panels on their roof. The HOA had fined the family and attempted foreclosure, despite state law that prohibits entirely banning solar panels but allows restrictions on front-facing installations. The North Carolina Supreme Court ruled in the family's favor, setting a precedent that makes it easier for homeowners to install solar panels in the state.

Source: The Cool Down

Elevating Customer Satisfaction: The Core of AMG's Strategy

At Association Management Group (AMG), our mission has always been clear: to deliver unparalleled service that not only meets but exceeds the expectations of our clients. Our strategy is rooted in a deep commitment to achieving the highest level of customer satisfaction. This commitment extends beyond just meeting the needs of the communities we serve; it involves creating programs and services that enhance the satisfaction of both community members and their leaders.

The Synergy of Satisfaction: Customers and Employees

At AMG, we believe that there is a powerful synergy between customer satisfaction and employee satisfaction. Our team members are the backbone of our company, and their well-being directly impacts the quality of service we provide. When our employees feel valued, supported, and empowered, they bring that positivity and dedication to their interactions with our clients. This, in turn, fosters stronger relationships with the communities we manage and drives higher levels of satisfaction across the board.

One of the leading questions clients ask us is, "How do you retain your managers?" This question arises because many new clients come to us from companies where manager turnover has been a persistent issue. At AMG, our managers have been with us for an average of over 10 years. The key to this retention lies in our belief that, in order to keep good people, they must be treated and compensated appropriately. Labor is our biggest single cost and asset, and maintaining a skilled and dedicated team is essential. By investing in our employees through competitive salaries, continuous training, and a supportive work environment, we ensure that they have the motivation and resources needed to deliver the exceptional service that AMG is known for.

Quality Service: The Value Behind the Cost

We understand that providing high-quality service comes with a cost. However, we firmly believe that the value of exceptional service far outweighs the price. At AMG, we are sensitive to the financial realities that our communities face, and we work diligently to balance quality with cost-effectiveness. Our priority is to ensure that every dollar spent translates into tangible benefits for the community.

It’s essential to recognize that just because a service has an upfront cost, that doesn’t mean it’s more expensive in the long run. I recall a situation where an association decided to proceed with repaving a parking lot without hiring an engineer to diagnose a wetness issue. Unfortunately, the repaving didn’t solve the underlying water problem. Later, the board discovered that a French drain would have addressed the issue at a much lower cost than the repaving. This is a clear example of how investing in the right services from the start can prevent more significant expenses down the line.

In another instance, a community had not reconfirmed its registered agent for many years. Although the agent was a highly competent former judge, he had retired and failed to forward crucial legal documents to the association. This oversight ended up costing the association hundreds of times what it would have cost to verify the registered agent’s status. At AMG, we’ve implemented programs that not only raise satisfaction but also, in many cases, offer associations overall lower costs by proactively addressing potential issues before they become costly problems.

Industry-Leading Results and Recognition

Our dedication to excellence is not just an internal metric; it is recognized by the broader community as well. AMG consistently achieves industry-leading results, a testament to the hard work and commitment of our team. Our company is often placed in the very elite of community management firms, as evidenced by our exceptional Google reviews and other customer feedback platforms.

These accolades are more than just numbers; they are a reflection of the trust and satisfaction of the communities we serve. We take pride in being recognized as a leader in our field, and we remain committed to maintaining and enhancing this reputation by continually striving for excellence in everything we do.

Conclusion

At Association Management Group, customer satisfaction is not just a goal—it is the foundation of our strategy. By creating programs that elevate the satisfaction of both community members and their leaders, investing in our employees, and balancing quality with cost, we ensure that AMG remains at the forefront of the community management industry. As the examples above demonstrate, a thoughtful investment in quality service can lead to significant savings in the long run, reinforcing our commitment to providing the best value for our clients. We are proud of our industry-leading results and the recognition we receive from our clients, and we will continue to prioritize satisfaction in all aspects of our work.

MAGICIAN DAVID COPPERFIELD SUED FOR ALLEGEDLY TRASHING $7M NYC PENTHOUSE: 'A STATE OF UTTER DISREPAIR'

David Copperfield is being sued by the condo board of his New York City penthouse for allegedly allowing the property, valued at $7 million, to fall into severe disrepair after abandoning it around 2018. The lawsuit claims the unit has extensive water damage, mold, and mildew, posing risks to the building's structure and other residents. The condo board accuses Copperfield of neglecting necessary repairs, only addressing cosmetic issues, and causing significant damage, including a valve failure that resulted in $2.5 million in damages. Copperfield's representative denies the allegations, framing the issue as a simple insurance claim.

adapted from source: foxbusiness

That pesky HOA? Here's why you should embrace it

South Carolina has one of the highest percentages of homeowners living in community associations (HOAs), with 80% of new homes built in 2020 requiring an HOA. Approximately 26% of the state's residents live in HOA-governed communities, reflecting a trend towards planned developments. HOAs are valuable for maintaining property values, enhancing community aesthetics, and fostering a sense of community. However, while some residents criticize HOA rules as overreaching, these organizations play a crucial role in ensuring safety, effective governance, and the overall quality of neighborhoods in the state. Despite occasional issues with board overreach, HOAs remain essential to South Carolina’s thriving communities.

Adapted from source: Greenville News

Condo owner sues HOA over Ring camera, loses, has to pay $73K

Teywonia Byrd, a Charlotte resident, installed a Ring camera outside her condo for security after being drugged and sexually assaulted, but her HOA denied her request to keep it, citing privacy concerns. Despite the denial, Byrd kept the camera, leading to daily fines and a lawsuit, which she lost. She now owes $73,000 plus potential attorney fees of $115,000. The HOA had offered to waive the fees if she removed the camera, but Byrd refused, prioritizing her safety over financial considerations.

NOTE

Harmony Taylor with Law Firm Carolinas spoke to the attorney handling this case, who reported:

 

"The owner in this case had a camera that pointed not just into the hall, but showed other units and individuals coming and going to those units. She used recordings to report on her neighbors to the Association.  It was a sad situation because the owner was assaulted in her own unit by someone she let into her units, after she initially installed the cameras.  The Association may have allowed the camera to remain in other circumstances. This case underscores the facts that:

1. Most associations require architectural approval for the installation of Ring or similar doorbell cameras, particularly in condos.

2. The cameras must be positioned to target their view to the unit's interest and not invade others' privacy.

3. The cameras must not be used to effectively police neighbors.

Adapted from article at source: WSOCTV

The Importance of Reserve Studies for HOA Management: Lessons from Surfside Beach

As an HOA management company executive, I urge all community leaders to prioritize long-term maintenance and the proactive identification of structural needs within their properties. Recent events have highlighted the critical importance of regular inspections and reserve studies in safeguarding our communities. The closure of the Sandfiddler condo building in Surfside Beach due to severe structural deficiencies underscores this necessity.

On July 1, Surfside Beach officials deemed the Sandfiddler at 813 S. Ocean Blvd. unsafe after identifying "inadequate means of egress and structural deficiencies." Fire Marshal Keith Williams, the town building inspector, and an outside engineer concluded that the building posed a fire hazard and was otherwise dangerous to human life or public welfare. This decision came after the fire marshal first noticed problems during a routine inspection, leading to a thorough assessment that revealed significant issues with the front walkway posts, railings, and balconies.

This incident is not isolated. Similar closures have occurred along the Grand Strand, including the Kingfisher Inn and the Renaissance Tower, both of which faced structural problems that necessitated evacuations. These events serve as stark reminders of the vulnerability of coastal buildings to structural decay, particularly from the corrosive effects of the sea and salty oceanfront climate.

A comprehensive 2023 investigation by Florida newspaper, The Post and Courier, revealed that many aging coastal high-rises are at risk of structural decay. The study identified over 500 tall structures near the coast, vulnerable to storm surge flooding during hurricanes, with about 230 of these buildings being at least 30 years old. The slow-motion destruction caused by saltwater corrosion is a hidden threat to buildings along the East Coast, from Maryland to Florida. The tragic collapse of the Champlain Towers near Miami in 2021, which killed 98 people, highlighted the long-overlooked risk posed by saltwater to these coastal structures.

Given these alarming trends, it is imperative for HOA and condominium community leaders to adopt proactive measures to ensure the safety and longevity of their buildings. One of the most effective ways to do this is through regular reserve studies.

What is a Reserve Study?

A reserve study is a comprehensive analysis of a community’s physical assets and their expected lifespan. It assesses the condition of key components such as roofs, plumbing, electrical systems, and structural elements, estimating the remaining useful life of each. The study then provides a funding plan to ensure that sufficient reserves are set aside to cover future repairs and replacements.

Why Reserve Studies are Crucial

1. Preventing Catastrophic Failures: Regular reserve studies help identify potential issues before they become critical. In the case of the Sandfiddler, a proactive reserve study might have detected the structural deficiencies earlier, allowing for timely repairs and avoiding the need for an abrupt closure.

2. Financial Planning: Reserve studies provide a roadmap for financial planning, ensuring that funds are available when major repairs or replacements are needed. This prevents the sudden imposition of special assessments on homeowners, which can be financially burdensome.

3. Maintaining Property Values: Well-maintained properties retain their value better than those that are neglected. By ensuring that buildings are kept in good condition through regular reserve studies and subsequent maintenance, community leaders can protect and enhance property values.

4. Legal Compliance: In some states and governing documents, including those with high coastal populations, there are legal requirements for reserve studies. Adhering to these regulations not only ensures compliance but also enhances the safety and well-being of residents.

5. Enhancing Safety: The primary goal of reserve studies is to ensure the safety of residents. By identifying and addressing potential hazards, community leaders can prevent accidents and tragedies, fostering a secure living environment.

Implementing Regular Reserve Studies

To implement regular reserve studies, community leaders should:

1. Schedule Regular Inspections: Conduct inspections at least every three to five years, or more frequently for older buildings. Engage qualified professionals to carry out these inspections comprehensively.

2. Review and Update Reserve Studies: Ensure that reserve studies are updated regularly to reflect the current condition of the building and any changes in the estimated lifespan of key components.

3. Establish a Reserve Fund: Create a dedicated reserve fund based on the recommendations of the reserve study. Ensure that adequate contributions are made to this fund annually to cover future maintenance needs.

4. Communicate with Homeowners: Keep homeowners informed about the findings of reserve studies and the importance of maintaining adequate reserves. Transparency helps build trust and support for necessary assessments.

5. Act on Recommendations: Promptly address any issues identified in reserve studies. Delaying repairs can exacerbate problems and increase costs in the long run.

In conclusion, the closure of the Sandfiddler and other similar incidents serve as powerful reminders of the importance of proactive maintenance and reserve studies. As community leaders, it is our responsibility to ensure the safety, financial stability, and long-term viability of our properties. By prioritizing regular reserve studies and acting on their findings, we can prevent catastrophic failures, maintain property values, and, most importantly, protect the lives of our residents. Let's commit to making proactive maintenance a cornerstone of our management practices, ensuring the well-being of our communities for generations to come.

Paul K. Mengert, CEO

Association Management Group, Inc.

When Is an HOA or Condo Rental Restriction Unreasonable (Part II)

This article was originally published on August 7, 2024 by Harmony Taylor in HOA & Condo Associations Real Estate Blog for Law Firm Carolinas.

Law Firm Carolinas Blog

As attorneys, we are regularly asked by homeowner and condominium associations to assist with restrictions on rentals, whether complete or percentage bans, restrictions on short-term rentals, or limiting corporate rentals. (See past articles, including HOA/Condo Rental Restrictions, Corporate Owners & Institutional Investors and Short-Term Rentals in North Carolina and South Carolina HOAs and Condominiums). In February of this year, the NC Court of Appeals struck down a condominium rental amendment as unreasonable. (When Is an HOA/Condo Rental Amendment Unreasonable?)

Yesterday, August 6, 2024, the NC Court of Appeals again visited the issue of whether a specific declaration amendment restricting rentals is reasonable.

McDougald v White Oak Plantation HOA (“White Oak Plantation”) is an “unpublished opinion,“ which means the decision is not controlling legal authority and should not be cited in other cases. However, even unpublished opinions give a sense of the Court’s thinking as to specific issues and how subsequent courts may rule.

White Oak Plantation is a planned community in Buncombe County, NC. The original 1992 restrictive covenants predated modern rental platforms such as VRBO or Airbnb and contained no language regarding rentals. Instead, the covenants contained general language related to “residential use” and prohibitions against “business operation.” Many owners believed the business operation prohibition already restricted rentals. The covenants were amended at various points, but no specific rental restrictions were added. Plaintiffs are lot owners who began to rent their properties on a short term basis. Thereafter, the membership in 2019 adopted a declaration amendment to prohibit rentals of less than 90 days. Plaintiffs filed suit seeking a declaration that the amendment was invalid as to them and their lots. The trial court granted summary judgment in favor of the homeowners, and the association appealed.

The Court of Appeals analyzed the rental amendment to determine if it was “reasonable” using the standard established by the Armstrong v Ledges case. Noting that reasonableness may be determined from the language of the original covenants, deeds and plats, as well as other objective circumstances, the Court determined that nothing in the original development scheme precluded short term leasing. Thus, the court concluded, the new rental restriction was not reasonable and would not be applicable as to the Plaintiffs who brought suit.

So, what does the case mean or not mean? Again, as an unpublished decision, the opinion only applies to the parties involved and does not have precedential value. Fundamentally, the decision does not change our firm’s approach to rental amendments. ALL amendments must be reasonable, which means that circumstances matter. Associations that have never had any rental restrictions should approach them carefully. Any rental restrictions should be tailored to address membership wishes while protecting vested usage rights. This is why we always encourage associations to discuss such issues with the membership before pursuing any rental amendment to solicit input on the scope of the change and how it should be applied to existing owners (see Rental Amendment Concerns).

With any decision, it’s always best to read the actual case if you want to know how it might impact a specific association. The White Oak Plantation decision can be found here: McDougald v White Oak Plantation HOA.

If your association is considering a rental amendment, you should consult an experienced community association attorney at the outset to make sure that any amendment is pursued correctly–both as to the procedure and as to the substance of the amendment. Please contact any of our community association attorneys in North or South Carolina to discuss such issues.


Harmony Taylor

Law Firm Carolinas, LLC

Mastering Emotions in High-Stress Situations: A Guide for HOA Volunteers

As a volunteer for a community association (HOA), you often find yourself navigating complex situations that may be beyond your expertise. These circumstances can lead to intense emotions, making it crucial to develop strategies to manage these feelings effectively. Here are three key elements of emotional intelligence that can help you stay composed and productive, along with the importance of selecting and relying on qualified experts to relieve stress.

 

1. Select and Rely on Qualified Experts

One of the most effective ways to relieve stress is to acknowledge when a situation requires expertise beyond your knowledge and to seek out qualified professionals. By selecting and relying on experts, you can:

Reduce Personal Stress: Delegating complex tasks to professionals can alleviate your burden and reduce stress.

Ensure Quality Solutions: Qualified experts bring specialized knowledge and skills, leading to better outcomes.

Enhance Community Trust: Demonstrating a commitment to seeking professional help can build trust within the community, showing that you prioritize effective and informed decision-making.

Avoid becoming a “do it yourself” community leader. The role of a community leader is often to engage the right experts to help them manage or execute a situation.

 

2. Tap into Your Self-Awareness

Enhancing self-awareness is the first step to managing strong emotions. By understanding what you’re feeling and why, you can better control your responses. Try this simple exercise to improve your self-awareness:

Notice Your Body: Take a moment to scan your body from head to toe. Are you tense? Where is your energy level? Recognizing physical signs of stress can help you address them promptly.

Check-in with Your Thoughts: Assess your mental state. Are your thoughts loud or quiet? Clear or confused? This can provide insight into your emotional state.

Identify Your Emotions: Pinpoint what you’re feeling. How pleasant or unpleasant are these emotions? How intense are they? Naming the feeling can help you manage it more effectively.

3. Self-Regulate Using Your Breath

Breathing exercises are a powerful tool for self-regulation. When you feel overwhelmed, take a few minutes to focus on your breath. Slow, deep breathing activates your parasympathetic nervous system, which helps reduce stress and bring you into a more relaxed state. Try this technique:

Lengthen Your Exhales: Focus on making your exhales longer than your inhales. This simple practice can slow your heart rate and calm your mind, helping you transition from a heightened emotional state to a more relaxed one.

 

4. Find Small Moments to Uplift Others

Building positive relationships within your community can significantly enhance your emotional well-being. Seeing each encounter as an opportunity to uplift others can foster a supportive and productive environment. Here are some ways to do this: 

Offer Compliments: A genuine compliment can make someone’s day and strengthen your relationship with them.

Smile: A simple smile can convey kindness and approachability, making interactions more pleasant.

Kind Greetings: Starting your interactions with a kind greeting sets a positive tone and can lead to more constructive conversations.

 

Putting It All Together

Managing intense emotions in high-stress situations is a critical skill for HOA volunteers. By selecting and relying on qualified experts, tapping into your self-awareness, using breathing techniques to self-regulate, and finding small moments to uplift others, you can navigate your role more effectively and create a more positive environment for everyone involved.

Remember, it’s normal to experience negative feelings in challenging situations. The key is to manage them in a healthy way that supports both your well-being and your effectiveness as a volunteer. Start incorporating these strategies today and notice the difference they make in your ability to handle stress and maintain composure.

 

Paul K. Mengert, CEO

Association Management Group, Inc. 

What You Need to Know about the Corporate Transparency Act

This article was originally published on March 15, 2024 by Lindsey Behnke in Association of Corporate Counsel South Carolina, First Quarter Newsletter.

ACC South Carolina Newsletter

The Corporate Transparency Act (CTA) was enacted into the National Defense Authorization Act for Fiscal Year 2021 as part of an effort to curb money laundering and other illicit activities by increasing transparency in the ownership of businesses. The CTA went into effect on January 1, 2024, and requires the United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to establish and maintain a national registry of beneficial owners of entities that are deemed reporting companies.

            The CTA potentially subjects attorneys and other professionals who advise businesses and assist with their formation to new obligations and penalties. However, the exact implications for these professionals are still unclear. The overarching concerns include advising on the CTA’s requirements and balancing disclosure requirements with responsibilities and ethical obligations.

Timeline for Compliance

            On January 1, 2024, Reporting Companies were able to make their first Beneficial Owner Information (BOI) report on the FinCEN website. New entities formed on or after January 1, 2024, but before January 1, 2025, must file the report within 90 days of receiving confirmation of the entity’s creation. 31 CFR § 1010.380(a)(1)(i)(A). New entities formed on or after January 1, 2025, must file the report within 30 days of the entities’ creation. 31 CFR § 1010.380(a)(1)(i)(B).

            Entities that existed before January 1, 2024, have a full year to comply with the CTA and must file the report by January 1, 2025. 31 CFR § 1010.380(a)(1)(iii). Further, companies that existed before January 1, 2024, do not need to include company applicant information on their initial report. 31 CFR § 1010.380(b)(2)(iv).

            Once the initial report is made, companies must remain mindful of updating requirements. There is no recurring annual update requirement; the company must only update as needed. 31 U.S.C. § 5336(b)(1)(D). If there is any change to the beneficial ownership or any other information submitted in a report, the reporting company must, within 30 days of the change, submit an updated report to FinCEN. 31 CFR § 1010.380(a)(2)(i)

Who Needs to Comply?

            Not every company needs to file a BOI report with FinCEN. The new requirements apply only to “Reporting Companies,” which is any corporation, limited liability company, limited partnership, or “other similar entity” created by filing a document with the Secretary of State or similar office under the law of a state or Indian tribe. 31 U.S.C. § 5336(a)(11)(A)(i).

Foreign reporting companies are also subject to the reporting requirements, including any corporation, LLC, or other entity formed under the law of a foreign country and registered in any state or tribal jurisdiction by filing a document with a secretary of state or any other similar office. 31 U.S.C. § 5336(a)(11)(A)(ii).

            There are several exceptions to the reporting requirements, which generally fall within, but are not limited to, the following three categories: (1) entities that already carry significant disclosure obligations, such as banks, insurance companies, and registered investment advisors; (2) tax-exempt entities, such as charities, charitable trusts, and political organizations; and (3) large operating companies. 31 U.S.C. § 5336(a)(11)(B). A company is considered a large operating company if it meets three requirements: (1) operating presence at a physical office within the United States; (2) at least 20 full-time employees within the United States; (3) filed an income tax or information return demonstrating at least $5 million in gross receipts from U.S. sources. See § 5336(a)(11)(B)(xxi). Exempt entities should be made aware that if their exempt characteristics change, they may become Reporting Companies.

Contents of the Report

            Reporting Companies need to identify each Beneficial Owner and each Company Applicant by that person’s full legal name, date of birth, current residential street address (or business street address for a Company Applicant that files in the ordinary course of business), a unique identifying number from an identification document (e.g., passport or driver’s license), and an image of the identification document. 31 U.S.C. § 5336(b)(2)(A); 31 CFR § 1010.380(b)(1)(ii). The report must also include the full legal name and any “doing business as” name of the reporting company, its complete current address, the company’s TIN, and the state, tribal, or foreign jurisdiction of the company’s formation. 31 CFR § 1010.380(b)(1)(i).

Who is a Beneficial Owner?

            The CTA defines a Beneficial Owner as anyone who either (1) exercises “substantial control” over the Reporting Company or (2) directly or indirectly owns at least 25% of a Reporting Company. 31 U.S.C. § 5336(a)(3)(A).

            “Substantial control” includes any individual acting as a senior officer, exercising authority over appointing or removing senior officers or the majority of the board of directors, exercising substantial influence over important decisions, or any other similar exercise of control. 31 CFR § 1010.280(d). The Regulations provide a non-exhaustive list of important decisions that indicate substantial control. 31 CFR § 1010.380(d)(1)(i)(C).

            Ownership includes equity, stock, or similar instruments regardless of transferability or classification and capital or profit interests in an entity; any instrument that can be converted into shares or instruments, including warrants, rights, or futures; and options, privileges, or arrangements to buy or sell the items above are also considered ownership interest, except for those created and held by third parties without the Reporting Company’s knowledge or involvement. 31 CFR § 1010.380(d)(2)(i). Additional parameters for ownership can be found in 31 CFR § 1010.380(d)(2).

            There are a few exceptions where individuals who meet the requirements may not be considered Beneficial Owners: (1) a minor child, if the information of the parent or guardian is reported instead; (2) an individual whose sole interest in the company derives from a future right of inheritance; (3) an individual who holds an interest merely on behalf of another person as a nominee, intermediary, custodian or agent (the individual acting as the principal is the Beneficial Owner); (4) employees of the Reporting Company (who are not senior officers); and (5) creditors whose interest derives solely from the right to be repaid a sum of money or similar right intended to secure the right of payment or to enhance the likelihood of repayment. 31 U.S.C. § 5336(a)(3)(B)

Who is a Company Applicant?

            A Company Applicant is the person who files the document with the Secretary of State or similar office that creates the entity and/or the individual who directs or controls the filing of the document. 31 CFR § 1010.380(e). For example, this could be the paralegal who files the document and the attorney who directs them to do so. Both would be required to submit their personal information to FinCEN as part of the reporting company’s initial report. If an attorney or law firm chooses to have the reporting company itself make the disclosures to FinCEN, it will have to provide personal identifying information to the client. To avoid this, the attorney may submit the report to FinCEN, leaving the attorney responsible for ensuring the report is accurate. The only way for an attorney to entirely avoid these concerns is to refrain from filing formation documents.   

Penalties

            It is unlawful for any person to “willfully provide, or attempt to provide, false or fraudulent beneficial ownership information, including a false or fraudulent identifying photograph or document, to FinCEN. . .or willfully fail to report or complete or update beneficial ownership information to FinCEN.” 31 U.S.C. § 5336(h)(1). Anyone who violates this can be subject to a civil penalty of $500 per day for each day the violation continues, or a fine of not more than $10,000 or two years imprisonment, or both. 31 U.S.C. § 5336(h)(3)(A).

            Further, it is unlawful for any person to knowingly disclose or use the beneficial ownership information obtained by the person through a report or disclosure submitted to FinCEN. 31 U.S.C. § 5336(h)(2). An unauthorized disclosure can lead to civil penalties of $500 per day for each day the violation continues, or a fine of not more than $250,000, or five years imprisonment or both. 31 U.S.C. § 5336(h)(3)(B). There is a safe harbor whereby an individual is not subject to civil or criminal penalty if the person has reason to believe that the report is inaccurate and voluntarily and promptly (90 days after the initial submission date) submits a corrected report. 31 U.S.C. § 5336(3)(C).

Practical Implications for Attorneys

            The CTA raises new obligations for attorneys, whether they serve as Company Applicants or not. Some clients, such as small businesses with simple ownership structures, would likely pose very few concerns for the professionals who assist them. More complicated business structures, however, will require additional diligence.

            The CTA effectively obligates professionals to fully understand the structure of the entities they serve and those entities’ beneficial owners. The Company Applicant disclosure ensures that the professionals who form the entity are tied to it in a federal database. It is unclear from the CTA how harshly the federal government will assess attorneys or other corporate service providers. On the more extreme end, filing false or incomplete information when there are obvious red flags as to an entity’s ownership could subject legal service providers to penalties.

            Attorneys and firms retained outside of companies must decide whether they will continue to file entity formation documents on behalf of their clients and whether they will assist with compiling and submitting reports to FinCEN. Serving as a Company Applicant means that the attorney will always be associated with the entity in the federal database, even if the representation of the client has ended. In-house counsel will need to familiarize themselves with the requirements of the CTA, ensure their companies’ records of beneficial owners are accurate and current, and ensure there are data security measures in place to protect the personal information the CTA requires.

Further, if an attorney chooses to submit reports to FinCEN on behalf of a client, the attorney will be responsible for providing accurate information. Until policies and procedures are in place to meet these new requirements, some attorneys may refrain from serving as a Company Applicant, particularly for more complex entities.

            For those attorneys who elect to step back from filing formation documents and/or submitting FinCEN reports, the CTA still raises additional obligations, particularly for those who advise businesses and assist with drafting operating agreements and similar governing documents. The following are some considerations, although more may become apparent:

  • Implementing a system to inform existing clients of their new reporting obligations;

  • Adding language to LLC agreements and other similar governance documents that obligates members to comply with reporting requirements;

  • Identifying Beneficial Owners in governing documents;

  • Revising firm engagement letters to clarify that clients will provide complete and accurate reporting information, especially if submitting reports to FinCEN;

  • Determining whether attorneys will continue to assist with filing formation documents, refrain entirely from doing so, or make the determination on a client-by-client basis;

  • If attorneys will not be assisting with FinCEN reports or filing formation documents, ensure that is made clear in each engagement letter; and

  • If attorneys want to serve as Company Applicants, develop a vetting process to ensure accurate information is provided and that clients are making any needed updates to FinCEN.

Lindsey Behnke is an attorney in Turner Padget's Columbia, South Carolina, office, where she is a member of the Business and Commercial Litigation team. She may be reached at lbehnke@turnerpadget.com. The preceding was prepared for informational purposes only and does not constitute legal advice. Please seek professional counsel before acting on this information.

NC Real Estate Commission’s property flood history disclosure rule started July 1st

Starting July 1st, North Carolina will require sellers to disclose detailed information about their properties' flood risk and history, allowing homebuyers to make more informed decisions. This rule change, finalized by the North Carolina Real Estate Commission, was prompted by a petition from several nonprofit groups seeking greater transparency in real estate transactions. Sellers will now need to provide information on past flood incidents, insurance claims, and existing flood insurance premiums. While the new requirements may affect property values, advocates argue that increased transparency will ultimately benefit the real estate market and improve market efficiency.

Source: PortCityDaily

Embracing Diversity and Inclusion: A Core Value at AMG

As we approach Juneteenth, I wanted to share with our AMG team the company’s commitment to diversity and inclusion. We believe strongly in these principles as they are integral to our mission to be a community management company of excellence. Here are some thoughts: 

The Moral Imperative

First and foremost, embracing diversity and inclusion is fundamentally the right thing to do. Every individual, regardless of their background, deserves to feel valued, respected, and included. By creating a workplace and communities where everyone can thrive, we uphold the principles of equity and justice, which are cornerstones of a fair and just society. Our dedication to these principles reflects our integrity and commitment to ethical practices.

Broader Perspectives and Richer Experiences

Incorporating diverse perspectives is crucial for our growth and success. When we bring together individuals with dissimilar experiences and viewpoints, we enrich our collective understanding and creativity. Different backgrounds lead to diverse ideas, which can inspire innovative solutions and approaches. This variety in thought processes and experiences allows us to tackle challenges more effectively and seize opportunities that might otherwise go unnoticed.

Enhanced Client Relationships

Our commitment to diversity and inclusion extends beyond our internal culture—it significantly impacts our relationships with clients. By reflecting the diversity of the communities we serve, we are better equipped to understand and address the unique needs and concerns of our clients. This broader understanding enables us to build stronger, more meaningful relationships and to offer services that truly resonate with our diverse clientele.

Expanding Our Reach

A diverse and inclusive company is inherently more attractive to a wider range of potential clients. By showcasing our commitment to these values, we signal to the market that we are a forward-thinking, socially responsible organization. This reputation helps us attract a broader group of clients who value diversity and inclusion as much as we do. Our inclusive practices open doors to new opportunities and markets, fueling our company's growth and sustainability.

Empathy and Advocacy

At AMG, we deeply empathize with individuals from diverse backgrounds who are integral parts of the communities we manage. We are committed not only to championing their rights but also to encouraging everyone within our sphere to do the same. By fostering a culture of empathy and advocacy, we ensure that every voice is heard and valued, creating inclusive communities where all members can thrive.

A Call to Action

I encourage each of you to embrace and champion diversity and inclusion in your daily work. Recognize and appreciate the unique perspectives your colleagues bring to the table. Actively seek out opportunities to learn from one another and to foster an environment where everyone feels empowered to contribute their best.

Together, we can continue to build a company that not only excels in its field but also serves as a beacon of diversity and inclusion. Thank you for your dedication to these values and for your unwavering commitment to our shared success.

 With appreciation,

Paul K. Mengert, CEO

Association Management Group, Inc.