Can an HOA sell your home? What NC law says, and how to challenge foreclosures

Mary Ramsey
·2 min read
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Sherry Loeffler holds the notice of the lien that her HOA put on her home after fining her nearly $12,000 - over windows that she contends they approved. A Mecklenburg County judge ordered the HOA to remove the lien.

In North Carolina, HOAs can initiate foreclosures and also have other powers over homeowners. But there are steps homeowners can take to fight back when issues arise.

Here’s what to know about what HOAs can control in North Carolina and how to handle disputes with your HOA:

What authority do HOAs have in North Carolina?

North Carolina HOAs have the authority to approve “architectural changes” to your property, the state Attorney General’s Office explains. That includes projects such as painting and additions.

An HOA may also “require its members to pay for construction or repair of common facilities.”

“Be aware that you will have to pay the fees even if you don’t use the facilities,” the AG’s office advises.

Whether an HOA can prevent homeowners from installing solar panels has been the subject of legal disputes in North Carolina.

A June 2022 state Supreme Court ruling somewhat affirmed a homeowner’s right to install solar panels.

Hopes Foreclosed

NC rules make it easy for HOAs to foreclose on homeowners. State law allows them to force the sale of homes for any amount of unpaid dues, no matter how small. Our investigation shows how often it's happening — and how it can be devastating to homeowners.

How to respond to disputes with HOAs

Many homeowners like the work their HOA does — 89% of respondents to a survey of North Carolina homeowners by the Community Associations Institute said their HOA experience has been “positive” or “neutral.”

Still, disputes arise.

HOA foreclosures differ somewhat from those initiated by banks or mortgage lenders. Scams sometimes follow foreclosure filings, and a lawyer may be able to help you navigate the process.

If you’re at risk of foreclosure, declaring bankruptcy can be an option to stop the process, but that should be researched deeply since it can have long-term financial implications.

“Under North Carolina law, a homeowner’s last chance to stop a foreclosure with a bankruptcy filing comes upon the expiration of the upset bid period,” the Sasser Law Firm explains. “This either means the sale date plus 10 days or another 10 days after the final upset bid is submitted at the country courthouse.”

HOA members have power too

If you’re unhappy with an HOA’s bylaws, members have options under North Carolina law for changing them.

Your HOA can require up to 67% of all property owners to vote in favor of a change, and a property owner not voting can constitute a “no” vote. At least 80% of property owners must vote in favor in order to disband an HOA in North Carolina.

HOAs are also required by North Carolina law to hold at least one executive board meeting per year for property owners to speak about any issues.

This article is a modified version of a story published on Dec. 6, 2022