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COVID-19 prevented in-person learning at our March Law Day event, 

but our 2020 Community Association Law Day speakers share Q&A tips from

their session topics. Watch this space for new posts every other day! 


Financial Hurdles- Why Associations Fail to Qualify for
Loans & Practical Solutions

Cynthia Jones / Sellers, Ayers, Dortch & Lyons, PA
Chris Bruffey / CommunityPLUS Div. of North State Bank
Mike Roche / CIT



  1. What are the most common reasons associations would borrow money?Associations typically borrow money in order to perform repair and replacement projects within the community. A loan may allow the association to pay for part or all of the expense without having to deplete reserves. Or it may allow the association to complete a project such as paving, roofing or siding for the entire community all at once which would allow them to obtain better pricing from a contractor because they mobilize the crew once and purchase materials in bulk.

  2.  What are the most common reasons associations don’t qualify for a loan? 
    Sometimes Associations have too few units/homes (minimums can range from 20-50 units) or a high delinquency percentage which is detrimental to them in qualifying for a loan.  If more than 10% of the units are past due in paying assessments, there is a high investor ownership percentage, or the dues increase or special assessment being used to repay the loan is too high in relation to current annual dues the association may not qualify.

  3. When considering applying for a loan, does an association need to involve an attorney? 
    As the song goes, start at the very beginning - it’s a very good place to start.  Your attorney can (and should) help you determine what approvals are needed to obtain a loan, to approve the dues increase or special assessment being implemented to repay the loan and to pledge the dues and assessments as collateral for the loan.  Your attorney can also advise about any other aspects the board should consider before moving forward with the loan.



Time Bombs Hidden in Association Restrictions, Rules, Regulation & Policies

Steve Black & Adam Marshall / Black, Slaughter & Black, PA




  1. What specific areas of community property can be controlled or regulated at any time by rules and regulations?  
    Rules and regulations, in most cases, are developed and adopted by the Board of Directors and can be imposed to govern common areas only (that the Association owns or controls). In contrast, restrictive covenants are those restrictions that govern the usage of an owner’s property or owner behavior on their property.  These restrictions must be recorded in the community declaration. 
    In a single family home community owners usually own their home and all of the land surrounding the home on their lot. Therefore the rules and regulations will likely not be helpful in regulating these areas.   In a townhome community owners own their lot. However, the question becomes what property is included in the lot. Some townhome lots are merely the footprint of the townhome, and in others land surrounding the townhome may be included. Rules and regulations will be able to control the common area, but will not be helpful in regulating the townhome itself or any strip of land included in the ownership of the townhome lot. Rules and regulations in condominium properties can obviously govern more because the vast majority of the community property is common area. 

  2. Why are rules and regulations focused on children a potential violation of the Fair Housing Act (FHA)?
    The Fair Housing Act (FHA) applies to housing providers (i.e. community associations) and prohibits discrimination based on certain protected classes. Familial Status is a protected class under the Act and includes families with children. While often well intentioned, rules and regulations often single out children. For example, a rule that designates a certain period of time for “adult swim” may be a violation of the FHA. Why? This is because “adult swim” is often really a rule to get children out of the pool so adults can enjoy some undisturbed swim time. While that may seem reasonable, it prohibits families with children from having equal access to the pool facilities. Another pool related example of a potential FHA violation would be to state that children must be potty trained and must wear swim diapers before entering the pool. We see this in almost every set of pool rules that we review.  Part of our job is to change rules to make them age neutral. Anyone can be incontinent. Simply changing a rule to state that incontinent persons must wear swim diapers before entering the pool can neutralize potential FHA issues.
    The goal of the FHA is to prevent protected classes from being treated differently because of their status as a member of identified protected classes. Whenever the word children is used in a set of rules and regulations it should raise a red flag and trigger further review.

  3. How much detail should a board include when drafting a particular rule or regulation, so that the association has the best chance of enforcement?
    There is a fine line when drafting rules and regulations between being too vague in the language and too structured. Both have unintended consequences. The courts in North Carolina are trending sharply toward finding rules and regulations and restrictions unenforceable for vagueness. The courts do not like subjective standards. For example, a rule states that vehicles may not be improperly parked in the association’s parking lot. What does “improper” mean? We would suggest that Boards define these types of vague terms.
    In the alternative, rules and regulations often offer too much structure. It is common to see rules and regulations that give very detailed explanations of collection and fining procedure. In most cases the North Carolina Statutes will govern and set certain procedures for these items. We have seen that when a detailed procedure for taking certain action is published in the rules and regulations, and for some reason the association’s own published procedure is not followed, the courts will find the action taken invalid. We tend to encourage Boards to rely on the North Carolina Statutes.



Service Animals and Comfort Animals and Exotic Pets, Oh my!

Adam Beaudoin / Ward and Smith, PA and Andrew Bateman / TriSure




  1. How do we know the difference between a service animal and an emotional support animal?
    The only type of animal that can be considered a service animal is a dog, and in rare cases a miniature horse.  Accordingly, if the animal is not a dog, it cannot be a service animal, so the next step is to figure out whether the animal's owner qualifies for a support animal.

  2. What if we don't believe that the information submitted by the member requesting a reasonable accommodation is legitimate?
    The new HUD guidance provides that in such circumstances the Association may contact the prescribing physician for more information. Granted, the Association cannot inquire as to what disability the member has, but the Association can get more information on the causal link between the member's disability and the need for the support animal.

  3. Are there any types of animals that cannot qualify as a support animal?
    Support animals can almost be any type of animal, but if the animal is inherently dangerous and poses a risk to other members or their pets, it is likely that the Association can deny the request.  We once received a request for an emotional support alligator…and the member wanted to let it swim in the pool!



Insurance, Amendments, Deductible and Who Pays- the Law and Best Practices

Hunter Litaker / Litaker Insurance and Chris Gelwicks / The McIntosh Law Firm




  1. Why would an association need to make an insurance-related amendment?

    To clarify the Responsibility to Insure: If we know who insures it and what caused the claim, we know who is responsible for the damages. The clearer this is, the easier the claim process is. Easy Claim Process = Happy People

    To reduce claims: If an owner is now responsible for damages to the unit or anything up to the deductible whereas they were not prior, they are typically much more proactive on proper maintenance & repair moving forward.

    To save money: The less insurable you are, the less attractive your annual premium will be. Passing costs onto owners opposed to paying everything from common expenses also helps reduce claim payouts. A 30% increase to an owner’s HO6 policy is likely exponentially less expensive than a 30% increase to an association’s policy that insures the buildings throughout the entire community.

  2. Would an association policy pay for a condo owner’s appliance leak causing damage to flooring and the ceiling of the unit below?

    The association is responsible for providing insurance based on the language found in the insurance section of the CC&Rs or Declaration. If the documents say the association is to insure the units to 100% replacement cost minus a specific or ambiguous deductible, then that is what the association must do. Water is a covered cause of loss so therefore if the association insures the unit and water from the appliance overflowing causes damage, the association insurance is the policy applicable – subject to the deductible. If you can prove the damage was caused by a willful or neglectful act, the owner would likely be responsible for damages but that is almost impossible to prove.

  3. Why do we need to amend the Declaration? Can’t we impose rules/policies?

    Changing insurance requirements that are contained in the Declaration of Covenants requires an amendment to the Declaration, adopted either via vote or written agreement, of at least 67% of the membership votes or voting percentage. Such amendments may require the Board and supportive members to go door to door to obtain the required number of votes or voting percentage to pass the amendment.



Assessment Collections: Overview of North Carolina Law

Tina Pace / Hatch, Little & Bunn, LLP  




  1. What is the first step an association should take for delinquent dues or fees? 
  2. When should an association consider filing a lien against a delinquent owner?
  3. Do all associations really need a formal Collections Policy?



Common Problems Transitioning from Developer to Association Control

Adam Beaudoin / Ward and Smith, PA




  1. What does it mean for our community to “transition?
  2. When does a community transition?
  3. What’s the big deal about transition?



Managing the Mob:  Social Media’s Advantages, Disadvantages, What You Can and Can’t Control

Chris Gelwicks and Ted Mitchell / The McIntosh Law Firm, PC



  1. What are some important items to remember regarding social media?
  2. If the association controls the content on a social media site, is it infringing on the members’ right to “free speech”?
  3. Can an association stop individuals from posting derogatory, false, and/or inflammatory content on social media sites not owned and operated by the association?




Complicated Collections

Bonnie Braudway and Charles Meier / Marshall, Williams & Gorham, LLP



  1. How should a board handle collections when there is evidence the owner may be mentally incompetent? 
  2. Can an association cut off water to a delinquent unit owner when water service is provided by the Association?
  3. Is there a minimum amount that must be owed before a delinquent account is sent to an attorney? 



Case Law Update

Brian Edlin / Jordan Price 





  1. Can a developer build homes in a subdivision in any manner or sequence it chooses?
  2. Can an Owner block a beach access that is maintained by an Association, and can an Association construct improvements in an access easement?
  3. Is an Owner entitled to legal fees when he/she sues the Association to compel it to produce certain Association records where the Association, in good faith, attempts to respond to the Owner’s records requests?



Green Initiatives for Associations: Solar, Electric Vehicle Stations & More

David Wilson / Black, Slaughter & Black, PA and Tina Pace / Hatch, Little & Bunn, LLP




  1. Is my community subject to North Carolina’s solar statute?
  2. Why should my community adopt a solar policy?
  3. How can my community be prepared for electric charging stations? 



What HOA/Condo Leaders Need to Know About Meeting Procedures and Robert’s Rules

Jim Slaughter / Black, Slaughter & Black, PA




  1. Do North Carolina HOAs and Condominiums have to follow Robert’s Rules of Order?
  2. What procedures should HOA and condo boards follow at board meetings?
  3. Where can I find more help on running effective meetings?



Anything but Easy: Easements and HOAs

Ben Karb and Mike Hunter / Offit Kurman Horack Talley





  1. Why are easements important in an HOA?
  2. How are easements created? 
  3. Why is it important to understand easements?




Community Association Psychology 101: Building Relationships and Dealing with (or Avoiding) Certain Personalities

Matt Waters / Jordan Price Law Firm



  1. What is “community psychology”?
  2. How can community psychology and emotional intelligence help the Association function better?
  3. How can recognizing and addressing cognitive bias help associations avoid conflict?




Rentals, Rentals, Rentals

Lori Jones, Jordan Price




  1. Are rental restrictions the answer?
  2.  What options are there when it comes to rental restrictions?
  3. Are there “bad” or unenforceable rental restrictions? 



more Calendar

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