ROLL FOLD... MAKE ADJUSTMENTS FOR ROLL FOLD. MAKE ADJUSTMENTS FOR DOT GAIN.

rules. Although the Commission cannot referee Q: Don’t my constitutional rights to freedom of A: With only rare exceptions, you will be developers and sellers of certain residential disputes between an association and its members, speech, freedom of religion and the enjoyment of my responsible for your own attorney fees and other subdivision lots have been required by law to give it has disciplined its licensees for failing to deliver property prevail over the restrictive covenants or the legal expenses. the first purchaser of each property a Subdivision the Subdivision Street Disclosure Statement, selling powers of the association? Street Disclosure Statement containing important lots in unapproved subdivisions, misrepresenting A: Not in all cases. If you choose to purchase Roads and Common Areas information about road ownership and maintenance material facts in a transaction, mishandling funds, a restricted property, you agree to abide by the responsibility. However, the application of this law is Questions and Answers on: and other violations of the Real Estate License restrictions. Display of signs, flags or banners, certain Q: Who owns the roads in a residential subdivision quite limited, so it is very important that you inquire Law. The Consumer Protection Division of the uses of the property, storage of personal property or planned community? into the status of roads in the subdivision and find out North Carolina Attorney General’s Office also (e.g., boats, RV’s, etc.), keeping of animals, and other A: Unless the roads have been dedicated to public who is responsible for their maintenance. RESIDENTIAL has power to act against legal entities engaged in practices can lawfully be controlled by restrictive use and formally accepted by the appropriate SUBDIVISIONS certain unlawful practices [Phone: 919/716-6000]. covenants if they are properly created and enforced. government agency, neither the state nor any public Q: How do I know which “common areas” of a SUBDIVISIONS agency owns legal title to the land over which a subdivision or planned community are reserved AND PLANNED Property Restrictions Q: What if a purchaser doesn’t want to follow the street runs. Where the developer has retained title to for the use of all owners? restrictive covenants affecting the property? the streets (i.e., the lot lines border the edge of the A: They will be specified by the developer in COMMUNITIES Q: Can property restrictions dictate the style of my A: A purchaser who does not abide by the street), it is liable under state law for erosion control the recorded map or plat of the property. Even if home or the colors I choose for its exterior? restrictions on the property can be fined. That fine and possibly civil damages if injuries result from a the developer retains title to the common areas or A: Yes, if the restrictions are properly drawn and can become a lien on the property and collected lack of maintenance. This is true even after all lots conveys them to some other person or entity, these consistently enforced. by sale of the property through foreclosure. If the have been sold. areas (trail systems, recreation areas, lakes, roads, etc.) association is subject to the Planned Community Act, cannot be used for any other purpose, and all of the Q: Can the developer, through restrictive it may impose a fine up to $100.00 per day, after Q: Who is responsible for road maintenance in a owners in the subdivision may use the property for covenants or sales contracts, control my choice giving written notice to the owner of the alleged subdivision or planned community? the specified purpose. of builder or real estate agent? violation and providing an opportunity to defend A: Until responsibility for road maintenance is A: Not in most cases. However, a developer may against the charge at a hearing. lawfully transferred to a municipality or the North lawfully refuse to sell directly to you and instead Carolina Department of Transportation, either require you to purchase a lot and home from Q: What can I as an owner do if the association is the developer or the owners will be responsible. a particular builder. As to real estate agents, a not performing its duties or if other owners violate However, if the roads are private or the developer developer may include the agent’s commission in restrictive covenants or bylaws? becomes insolvent, is dissolved or dies, the owners the home’s purchase price. A: Your remedy is to sue the association and/or alone will have to bear the cost unless a government the offending property owners in court for an order agency takes control. Since there is no guarantee compelling them to abide by all lawful covenants that any government agency will ever take control The North Carolina Real Estate Commission and bylaws. But remember, these are private rights of the roads in a subdivision, owners are ultimately P.O. Box 17100 of action that you must assert on your own. No called upon to bear the cost of road maintenance in Raleigh, North Carolina 27619-7100 state agency, other than the court system, can many situations. 919/875-3700 determine or enforce an owner’s rights. Web Site: www.ncrec.gov Before I buy, will I know who is responsible for Q: 7,500 copies of this public document were printed at a cost of $.XXX per copy. Q: Who pays my legal expenses if I am sued by my the road maintenance? association? A: Not necessarily. Since October 1, 1975, REC 3.49 9/1/12 ROLL FOLD... MAKE ADJUSTMENTS FOR ROLL FOLD. MAKE ADJUSTMENTS FOR DOT GAIN.

Questions and Answers on: Homeowners Associations mandatory, you must pay all lawful assessments, common property. The Act covers creation, alteration recorded plat to the buyer before closing; R E S I D E N T I A L dues or charges. and management of planned communities. Smaller (2) plainly and conspicuously notify the S U B D I V I S I O N S A N D Q: What is a Homeowners Association (“HOA”)? projects created after that date and older properties buyer that final subdivision approval has not been P L A N N E D C O M M U N I T I E S A: It is an association of owners, typically in a Q: Is there any limit on what an owner has to pay to that meet the definition of a planned community may, obtained, that the city or county may not grant residential subdivision or planned community, whose the association? under certain circumstances, be brought under the approval, that changes between the preliminary and properties are subject to restrictive covenants limiting A: Not so long as the dues, charges and/or Act so long as they have covenants requiring payment final plat are possible and that the contract can be As North Carolina becomes an increasingly their use. The association may be responsible for assessments are lawfully imposed in accordance with of common expenses.] terminated without the buyer being in breach if the urban state, more and more people are purchasing the maintenance and control of the common areas in procedures established by the restrictive covenants. final plat is materially different from the preliminary the development and enforcement of the restrictive Sometimes, when assessments are for substantial Q: What happens if an owner (or the developer) fails plat; homes and lots in residential subdivisions and covenants. undertakings (road maintenance, utility services, to pay funds claimed by the association including (3) provide that even if the final approved plat planned communities. In these subdivisions and building maintenance, etc.) they can be costly; assessments, fines, fees or other charges? is not materially different from the preliminary communities, there is usually a homeowners therefore, prospective purchasers should consider the A: The association must use the rights granted plat, the buyer may not be required to close earlier amount of any current or pending dues, charges and in the restrictive covenants to collect them. In than five days after delivery of a copy of the final association that may be responsible for maintaining assessments and the financial health of the association developments subject to the Planned Community recorded plat; and the common areas of the development and the when determining whether they can afford the Act, liens and foreclosures of the owner’s property (4) provide that if the final approved plat is enforcement of “restrictive covenants.” Many property. If an existing owner believes an association are permitted. materially different from the preliminary plat, the purchasers seek residential subdivisions and planned has improperly imposed a charge of some kind, only buyer may not be required to close any earlier than a court can determine whether it is lawful. 15 days after the delivery of the final recorded plat, communities with restrictive covenants (sometimes and during that 15-day period, may terminate the referred to as “restrictions”) because they believe Q: What is the developer’s role in a mandatory contract and receive a refund of the earnest money the covenants will help assure consistency in the association? Must it pay dues, charges and or prepaid purchase price, without breach or further assessments? obligation. neighborhood and the preservation of property Q: Do I have to join the association? A: Under North Carolina law, the developer of any Typically, after plat approval and inspection of value. Restrictive covenants may address everything A: It depends on whether it is “voluntary” or real estate project is the owner of all unsold lots or construction, the local government has no further from whether single or multi-family housing is “mandatory.” Membership in an association is typically units in the project. As long as the developer owns role in administering the homeowner association mandatory if the restrictive covenants are recorded in a majority of them, it controls the votes and therefore except to assure compliance with local ordinances permitted to the type, size and color of construction. a property’s chain of title. But some neighborhoods the association itself. The developer (or its successors) Q: What is the role of local government in HOA or state laws (for example, a Health Department This publication is intended as an introduction have less formal voluntary associations, generally with may have the power to amend the covenants and administration? permit for a swimming pool operation). to issues affecting residential subdivisions and less power than mandatory associations. Regardless restrictions so long as it acts in accordance with A: Generally, residential subdivisions and of whether it is mandatory or voluntary, if you are a the legal documents creating the association. The planned communities must be approved by a city Are associations and persons who manage them planned communities (other than condominiums) Q: member of the association, typically you will have a developer has a fiduciary obligation to act in good or county zoning authority, depending upon the required to be licensed? that are subject to restrictive covenants. (For voice in its operation. faith, in accord with law, and in the best interest location of the property. When subdivision approval A: Not unless they engage in acts classified as real information on condominium ownership and of the association. [Note: Residential developments is required, and preliminary plat approval has been estate brokerage (sales or rental of real estate for townhouse properties, see the Commission Q: Do I have to pay association dues? created on or after January 1, 1999 are covered by the obtained, a developer may then offer lots for sale and others) or time share development. If they do, they A: If your association is voluntary, then any payments North Carolina Planned Community Act if they have enter into contracts so long as the contracts: must be licensed by the North Carolina Real Estate publication, Questions and Answers on: Condos & necessary to maintain membership are also voluntary. more than 20 lots or units and a covenant in their (1) incorporate a copy of the preliminary plat Commission and act in accordance with Commission Townhouses, or contact your attorney.) However, if membership in the association is chain of title requiring owners to pay the expenses for and obligate the owner to deliver a copy of the Continued