Condos and Townhouses? Projected Completion Date, the Legal Documents Which Offers

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courts and pools, for the benefit of the owners and over time. You should find out who has the authority to ability to use your property. It could even restrict your These Acts give associations fining authority over the The members of the association’s executive board enforces the restrictive covenants. A homeowners’ establish fees and assessments, whether there are any ability to rent your unit to others. owners of condominiums created on or after October and the staff of management companies are NOT required association is usually established when the project limits on the amount that can be charged, the financial Before you purchase a townhouse or condo, you 1, 1986, the owners of townhouses created on or after to be licensed by the N.C. Real Estate Commission or any is created. The association will have an elected stability of the association, whether there are sufficient should carefully read the rules governing the project January 1, 1999, and owners of older condominiums and other state agency so long as their management activities Questions and Answers on: executive board which will manage the association dues/reserves to pay for larger expenditures in the and consult your attorney if you have any questions. townhouses whose associations have properly subjected do not involve the sale or rental of units. However, and perform such tasks as enforcing the rules and future, whether there are any pending or proposed themselves to portions of the applicable Act. licensed real estate brokers who manage homeowners’ regulations and collecting the homeowners’ dues. assessments of property owners. You are less likely Even if an association has the right to impose a fine, associations must adhere to the N.C. Real Estate License CONDOS & The developer, however, usually remains in to be shocked by fee increases if you have read this no fine can be imposed until the owner is given notice Law and related rules. This includes keeping the collected control of the association until the developer no information prior to signing a purchase agreement. of the alleged violation and an opportunity to defend funds of others in a trust account and maintaining records TOWNHOUSES longer owns a majority of the units, or no longer has against the charge at a hearing before the executive of all collections and disbursements of these funds. the majority of the votes in the association, or until a Q: Can an owner avoid paying assessments for the board of the association or a panel designated by the predetermined deadline has passed. common expense of the property? board. Once a violation is found and not corrected, Q: Can the homeowners’ association do anything about a A: No. All owners of condos including the developer the association may impose a fine up to $100.00 per developer who is causing problems in the development? must pay their share of common expenses. The same day for each day the violation continues. And, if the A: If the developer is still in control of the association, would also be true of townhouse owners if there is a owner fails to pay the fine and other charges assessed, it is unlikely that the association will be able to effectively clear and definite statement in the restrictive covenants Q: What should I do if I disagree with the association’s the association can file a lien against the property of take action against the developer; however, the individual specifying the purpose of the assessment and the rules? the offending owner and then sell the unit through a homeowners may be able to take legal action against a authority of the homeowners’ association to collect the A: If a dispute arises between you and the association foreclosure process. controlling developer. If the developer is not in control, assessment. over any of the association’s rules, it may be necessary Some problems may not be addressed by the the association can treat the developer just as it would to resolve the matter in court. Just because a provision covenants, bylaws, or rules and regulations. In such any other homeowner. appears in the bylaws or rules does not automatically cases, you may have to contact a local law enforcement mean that it is enforceable. But in most cases, a rule will official or your own attorney for assistance. Scan the code below to access the be upheld by the courts if it is considered “reasonable.” Commission Web site from your mobile devices. Q: Can my homeowners’ dues be increased? Also, you may try to change the rules. Any Q: What if I don’t pay my dues, assessments, fines, or A: Yes. The common expenses of your change in the bylaws or rules and regulations of the other changes? development may include grounds’ upkeep, building homeowners’ association requires approval by the A: If an owner fails to pay dues, fines, assessments or maintenance, insurance premiums, property taxes members of the association or its executive board. Each other lawfully imposed charges, the owner’s property is and management fees, among other things. When homeowner is entitled to vote. subject to foreclosure by the homeowners association these expenses go up, the cost is usually passed on (even if the owner’s property is fully paid for). to the property owners in the form of increased dues Q: Can the homeowners’ association tell me what I can Q: What happens if I do not abide by the restrictive and assessments. The legal authority to increase and cannot do on my own property? covenants, bylaws, or rules and regulations? Can the homeowners’ association employ a Q: THE NORTH CAROLINA dues and to assess homeowners is set forth in the To some degree. The law allows you great freedom In any condominium or townhouse development, management company to assist in managing my condo A: A: REAL ESTATE COMMISSION documents which govern the development. to tailor the use of your property to your particular an owner or the association may seek relief in court or townhouse complex? P.O. Box 17100 • Raleigh, NC 27619-7100 Prior to signing a contract to purchase a lifestyle. However, this freedom is not unlimited and is against another owner who violates the association’s A: Yes. A homeowners’ association, through its Phone: 919/875-3700 • Web Site: www.ncrec.gov condominium or townhouse, you should examine subject to certain restraints. A homeowners’ association, covenants, bylaws, rules or regulations. In addition, executive board, will often employ a management the governing documents to determine the amount or the developer, may be authorized by the declaration owners in some condominiums and townhouses may company to take care of maintenance, collect dues 7,500 copies of this public document were printed of maintenance fees and assessments you will be to adopt bylaws or other rules and regulations that may be fined by the association in accordance with either and assessments, and carry out other day‑to‑day at a cost of $.XXX per copy. obligated to pay and whether they may increase govern your conduct. This can substantially affect your the Planned Community Act or the Condominium Act. responsibilities of the homeowners’ association. REC 3.31 3/1/16 A publication of the North Carolina Real Estate Commission Questions and Answers on: Purchasing a Condo or Townhouse Act, as are certain developments which volunteer to be the specific duty to furnish these documents, but will townhouse. And you have no automatic right to cancel For townhouses and for condos created before C O N D O S & T O W N H O U S E S subject to all or a portion of the Act. Townhouses that do so if you request them. If a real estate broker is your purchase contract. October 1986, no law requires developers to provide Q: What’s the difference between a condo and a fall outside the Planned Community Act are governed assisting you in your purchase of a condo or However, when purchasing any pre‑owned condo promised amenities. However, if the developer fails to In the past, home ownership typically involved townhouse? by the same general laws that govern single-family townhouse, the broker may be able to obtain a copy unit created on or after October 1, 1986, the seller must provide a promised amenity, a property owner may file a single‑family house with a yard. But today, due to A: Condo unit owners own the inside of their units. houses. of these documents. But you may want to directly give you a “resale certificate.” This statement sets forth a civil suit based on the developer’s misrepresentation. increased prices of single‑family homes and changes in Townhouse owners own the complete unit, including consult your attorney and/or the homeowners’ the monthly assessment for common expenses and any Purchasers should be especially cautious lifestyles, many people either cannot afford or simply exterior surfaces and the land on which the unit is built. Q: How will I know if there are restrictions on the use of association as it is important to get the most current other fees payable by the unit owner. when purchasing a condo or townhouse unit in a prefer not to own traditional single-family homes. In my condo or townhouse, and what those restrictions are? version of the covenants and restrictions. If a real development that is incomplete. response to their needs, alternative forms of home A: Unit ownership in both condo and townhouse estate broker furnishes you a copy of the bylaws or Q: I’m buying a new condo or townhouse in a ownership have been developed. Among these are projects is subject to certain restrictive covenants (deed covenants, you should be aware that they may not be development that is still under construction. Does the multifamily housing complexes containing townhouses restrictions). These are usually embodied in a recorded current, since they remain subject to amendment by developer have to finish the development? and condominiums (often referred to as “condos”). legal document called a “Declaration of Condominium” the developer or homeowners’ association. A: No. Subject to applicable local and state laws. or “Declaration of Restrictive Covenants” which is Unless the developer has specifically contracted to recorded at the county Register of Deeds office. The complete the development, it can stop construction declaration describes the nature of the project and of new units at any time and sell any remaining establishes rules and restrictions governing the use of undeveloped portions of the developments. the units and common areas. Examples of restrictions Every condo or townhouse development also has include but are not limited to limiting the property Q: Does the developer have to provide “common areas” of the property such as recreation to residential use, requiring that units be a minimum promised amenities? Owning a Condo or Townhouse areas, sidewalks and parking lots. Condo owners share size and certain architectural style, prohibiting exterior A: For condos created on or after October 1, 1986, the ownership of the common areas with other owners, changes to the property, and limiting who can live in developer is required to file a plat or plan showing any Q: Who is responsible for maintaining my condo while common areas in townhouse developments are the property, etc. improvements such as swimming pools, tennis courts, or townhouse? This pamphlet focuses on questions frequently usually owned by the homeowners’ association for the Q: Are there any special protections for condo or a club house, which are planned. Each improvement A: Owners are responsible for maintaining the interior asked about purchasing and owning a townhouse or benefit and use of unit owners. Either way, owners purchasers? must be labeled “MUST BE BUILT” or “NEED NOT of their units; and townhouse owners may also be condo. What are homeowners’ associations? What typically pay dues to a homeowners’ association to A: Maybe. If you are considering the purchase of BE BUILT.” The developer is required to provide only required to maintain their doors, windows, and the are my responsibilities as an owner of a condo or cover the costs of maintaining the common areas, as a new condo unit, the developer (or the developer’s the amenities which are labeled “MUST BE BUILT.” crawl space under their units. The homeowners’ townhouse? What are the developer’s responsibilities? well as other common expenses. agent) must give you a public offering statement. This However, the developer may not promote any amenities association is typically responsible for maintaining all These are some of the subject areas addressed. statement is prepared by the developer and contains which are labeled “NEED NOT BE BUILT.” common areas and the exterior of buildings. However, The reader is cautioned however that the legal Q: Are there any other legal differences between information about the size of the development, the prospective buyers should verify this before making aspects of condo and townhouse ownership are condos and townhouses? projected completion date, the legal documents which offers. The association pays for this maintenance from too complex to be treated in detail in this pamphlet. A: Yes. The creation, sale and management of condos govern the property, and the projected common homeowners’ dues, assessments, and other charges. Therefore, prospective purchasers and owners of are governed by specificstatutes (the “Unit Ownership expense assessment. condos and townhouses are advised to consult their Act” for condos created before October 1, 1986 and the It will also inform you of your right to cancel the Q: What is a homeowners’ association? attorneys for specific guidance. In addition, for more “North Carolina Condominium Act” for condos created purchase contract within SEVEN CALENDAR DAYS A: A homeowners’ association is an organization of information on restrictive covenants, homeowners’ on or after October 1, 1986). There are no specific statutes Q: Will the closing attorney or real estate broker furnish following your execution of the contract. the property owners in a development, subdivision or associations (HOAs) and HOA dues and charges, see governing most townhouses. However, townhouse me a copy of the declaration, restrictive covenants, and No public offering statement is required to neighborhood that manages and maintains the common the Commission’s publication, Questions & Answers projects of more than 20 units and created on or after bylaws of the homeowners’ association? be given to you if you purchase a condo created areas such as open spaces, recreational areas, tennis on: Subdivisions and Planned Communities. January 1, 1999 are covered by the Planned Community A: Not necessarily. The closing attorney does not have before October 1, 1986, a condo that is not new, or a Continued