As a prospective homebuyer, you may or may not have had previous experience living in a community with a homeowner association. As you consider making what is likely the largest investment of your life, it is important that you understand the following rights and responsibilities of living in a community with a homeowner association.

• In most cases, becoming a member of the homeowner association is not voluntary. It is typically required by the ‘restrictive covenants’ which are part of the deed restrictions. If in doubt, ask your REALTOR® , builder agent, or seller.
• Read and understand the governing documents for the homeowner association before making an offer. These include the CCR’s (Covenants, Conditions, and Restrictions) and the Bylaws; and often include other Rules and Regulations.
• The Rules and Regulations may include boat and recreational vehicle parking restrictions, parking space limitations, pet restrictions, lawn maintenance requirements, etc.
• Most homeowner associations have architectural restrictions and homeowners typically must submit a written request and receive approval before making architectural changes. This may include home additions and remodeling; as well as fences, sheds, exterior garages, pools, gazebos, playground equipment, exterior paint colors, mailbox styles, etc.
• Understand the financial condition of the homeowner association. The association is required by North Carolina General Statutes to provide an annual income and expense statement and balance sheet to all lot owners at no charge and within 75 days after the close of the fiscal year. As a potential homebuyer, ask for copies of these financial reports.
• The normal annual operating expenses of a homeowner association are evenly distributed among all lot owners. The fees are referred to as Assessments and may be due on a monthly, quarterly, semi-annual or annual basis. Failure to pay your assessments on time typically results in late fees and over time may result in a lien or foreclosure action.
• The association should maintain a Reserve Fund which is similar to a savings account for future capital improvements. These capital expenses may include maintenance of private streets and parking, roofs and exterior maintenance in townhome communities, HVAC replacement in condominiums, as well as major expenses associated with clubhouses, pools, tennis courts, fitness centers, lakes, ponds, marinas, etc. Associations that do not properly maintain adequate Reserve Funds will eventually pass these expenses to the lot owners in the form of Special Assessments. Special Assessments may be one-time or recurring. They are often expensive and once approved by the association, all lot owners are required to pay their share. The consequences of not paying special assessments are possible late fees, liens, and foreclosure.
• Is the association self managed, managed by the builder/developer, does it contract with a management company, or have an on-site employee? Are the common areas well maintained? Are phone calls and requests handled promptly and professionally? Ask other residents and potential neighbors if the community is well managed and friendly. Are there any recent or pending lawsuits? Are meetings conducted in an orderly and business manner?