Bill Summary – FastDemocracy

H.B. 542
                           GENERAL ASSEMBLY OF NORTH CAROLINA
                                                                                                Mar 30, 2023
                                       SESSION 2023                                       HOUSE PRINCIPAL CLERK
     H                                                                                                    D
                                     HOUSE BILL DRH30234-NK-28
     Short Title:    Protect Homeowners' Rights.                                                    (Public)
     Sponsors:       Representative Liu.
     Referred to:
                                      A BILL TO BE ENTITLED
 AN ACT TO REQUIRE A MINIMUM AMOUNT FOR DELINQUENT ASSESSMENTS
      BEFORE A UNIT OWNERS' ASSOCIATION OR HOMEOWNERS' ASSOCIATION
      CAN BEGIN FORECLOSURE PROCEEDINGS AND TO STRENGTHEN NOTICE OF
      DELINQUENT ASSESSMENTS GIVEN BY THE ASSOCIATIONS TO OWNERS TO
      APPRISE OWNERS OF THE DELINQUENCY AND POTENTIAL FILING OF A CLAIM
      OF LIEN TO INITIATE FORECLOSURE.
 The General Assembly of North Carolina enacts:
              SECTION 1. G.S. 47C-3-116 reads as rewritten:
 "§ 47C-3-116. Lien for sums due the association; enforcement.
      (a)     Any assessment Any delinquent assessment of an amount of two thousand five
 hundred dollars ($2,500) or one year of unit owners' association assessments, whichever is lesser,
 attributable to a unit which that remains unpaid for a period of 30 days or longer shall constitute
 a lien on that unit when a claim of lien is filed of record in the office of the clerk of superior court
 of the county in which the unit is located in the manner provided in this section. Once filed, a
 claim of lien secures all sums due the association through the date filed and any sums due to the
 association thereafter. Unless the declaration provides otherwise, fees, charges, late charges and
 other charges imposed pursuant to G.S. 47C-3-102, 47C-3-107, 47C-3-107.1, and 47C-3-115 are
 subject to the claim of lien under this section as well as any other sums due and payable to the
 association under the declaration, the provisions of this Chapter, or as the result of an arbitration,
 mediation, or judicial decision.
      (b)     The association must provide proper notice of delinquent assessments to the unit
 owner before filing a claim of lien. The association must make reasonable and diligent efforts to
 ensure that its records contain the unit owner's current physical mailing address. address, current
 electronic mailing address, and current telephone number. No fewer than 15 days prior to filing
 the lien, the association shall do the following: (i) mail a statement of the assessment amount due
 by first class mail to the physical address of the unit and the unit owner's address of record with
 the association and, if different, to the address for the unit owner shown on the county tax records
 for the unit. If the unit owner is a corporation or limited liability company, the statement shall
 also be sent by first class mail to the mailing address of the registered agent for the corporation
 or limited liability company. Notwithstanding anything to the contrary in this Chapter, the
 association is not required to mail a statement to an address known to be a vacant unit or to a unit
 for which there is no United States postal address.address and (ii) send a statement of the
 assessment amount due via electronic mail. In addition, the association shall attempt to notify the
 unit owner via telephone of the delinquent assessments and the delivery details of the statement
 of the assessment amount due. If the association is unable to locate the current physical mailing
                                     *DRH30234-NK-28*
     General Assembly Of North Carolina                                                      Session 2023
 address or current electronic mailing address of the unit owner, the association shall contact the
 closing attorney who represented the unit owner in the real estate transaction for the property as
 indicated in public records and attempt to obtain the contact information from that person.
 Nothing in this subsection shall prevent the person responsible for providing the contact
 information from seeking reasonable compensation for the procurement process.
      (c)     A claim of lien shall set forth the name and address of the association, the name of
 the record owner of the unit at the time the claim of lien is filed, a description of the unit, and the
 amount of the lien claimed. A claim of lien may also appoint a trustee to conduct a foreclosure
 as provided in subsection (f) of this section. The first page of the claim of lien shall contain the
 following statement in print that is in boldface, capital letters, and no smaller than the largest
 print used elsewhere in the document:
      "THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF
 THE LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH
 FORECLOSURE AGAINST YOUR PROPERTY IN LIKE MANNER AS A MORTGAGE
 UNDER NORTH CAROLINA LAW."
      The person signing the claim of lien on behalf of the association shall attach to and file with
 the claim of lien a certificate of service attesting to the attempt of service on the record owner,
 which service shall be attempted in accordance with G.S. 1A-1, Rule 4(j), for service of a copy
 of a summons and a complaint. If the actual service is not achieved, the person signing the claim
 of lien on behalf of the association shall be deemed to have met the requirements of this
 subsection if service has been attempted pursuant to both of the following: (i) G.S. 1A-1, Rule
 4(j)(1)c, d, or e and (ii) by mailing a copy of the lien by regular, first class mail, postage prepaid
 to the physical address of the unit and the unit owner's address of record with the association,
 and, if different, to the address for the unit owner shown on the county tax records and the county
 real property records for the unit. The association shall also send a copy of the claim of lien and
 certificate of service via electronic mail to the unit owner. In the event that the owner of record
 is not a natural person, and actual service is not achieved, the person signing the claim of lien on
 behalf of the association shall be deemed to have met the requirements of this subsection if
 service has been attempted once pursuant to the applicable provisions of G.S. 1A-1, Rule 4(j)(3)
 through G.S. 1A-1, Rule 4(j)(9). Notwithstanding anything to the contrary in this Chapter, the
 association is not required to mail a claim of lien to an address which is known to be a vacant
 unit or to a unit for which there is no United States postal address. A lien for unpaid assessments
 is extinguished unless proceedings to enforce the lien are instituted within three years after the
 filing of the claim of lien in the office of the clerk of superior court.
      …."
              SECTION 2. G.S. 47F-3-116 reads as rewritten:
 "§ 47F-3-116. Lien for sums due the association; enforcement.
      (a)     Any assessment Any delinquent assessment of an amount of two thousand five
 hundred dollars ($2,500) or one year of homeowners' association assessments, whichever is
 lesser, attributable to a lot which that remains unpaid for a period of 30 days or longer shall
 constitute a lien on that lot when a claim of lien is filed of record in the office of the clerk of
 superior court of the county in which the lot is located in the manner provided in this section.
 Once filed, a claim of lien secures all sums due the association through the date filed and any
 sums due to the association thereafter. Unless the declaration provides otherwise, fees, charges,
 late charges, and other charges imposed pursuant to G.S. 47F-3-102, 47F-3-107, 47F-3-107.1,
 and 47F-3-115 are subject to the claim of lien under this section as well as any other sums due
 and payable to the association under the declaration, the provisions of this Chapter, or as the
 result of an arbitration, mediation, or judicial decision.
      (b)     The association must provide proper notice of delinquent assessments to the lot owner
 before filing a claim of lien. The association must make reasonable and diligent efforts to ensure
 that its records contain the lot owner's current physical mailing address. address, current
     Page 2                                                                            DRH30234-NK-28
     General Assembly Of North Carolina                                                         Session 2023
 electronic mailing address, and current telephone number. No fewer than 15 days prior to filing
 the lien, the association shall do the following: (i) mail a statement of the assessment amount due
 by first-class mail to the physical address of the lot and the lot owner's address of record with the
 association and, if different, to the address for the lot owner shown on the county tax records for
 the lot. If the lot owner is a corporation or limited liability company, the statement shall also be
 sent by first-class mail to the mailing address of the registered agent for the corporation or limited
 liability company. Notwithstanding anything to the contrary in this Chapter, the association is
 not required to mail a statement to an address known to be a vacant lot on which no dwelling has
 been constructed or to a lot for which there is no United States postal address.address and (ii)
 send a statement of the assessment amount due via electronic mail. In addition, the association
 shall attempt to notify the lot owner via telephone of the delinquent assessments and the delivery
 details of the statement of the assessment amount due. If the association is unable to locate the
 current physical mailing address or current electronic mailing address of the lot owner, the
 association shall contact the closing attorney who represented the lot owner in the real estate
 transaction for the property as indicated in public records and attempt to obtain the contact
 information from that person. Nothing in this subsection shall prevent the person responsible for
 providing the contact information from seeking reasonable compensation for the procurement
 process.
     (c)      A claim of lien shall set forth the name and address of the association, the name of
 the record owner of the lot at the time the claim of lien is filed, a description of the lot, and the
 amount of the lien claimed. A claim of lien may also appoint a trustee to conduct a foreclosure,
 as provided in subsection (f) of this section. The first page of the claim of lien shall contain the
 following statement in print that is in boldface, capital letters, and no smaller than the largest
 print used elsewhere in the document:
 "THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE
 LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH
 FORECLOSURE AGAINST YOUR PROPERTY IN LIKE MANNER AS A MORTGAGE
 UNDER NORTH CAROLINA LAW."
     The person signing the claim of lien on behalf of the association shall attach to and file with
 the claim of lien a certificate of service attesting to the attempt of service on the record owner,
 which service shall be attempted in accordance with G.S. 1A-1, Rule 4(j), for service of a copy
 of a summons and a complaint. If the actual service is not achieved, the person signing the claim
 of lien on behalf of the association shall be deemed to have met the requirements of this
 subsection if service has been attempted pursuant to both of the following: (i) G.S. 1A-1, Rule
 4(j)(1)c, d, or e and (ii) by mailing a copy of the lien by regular, first-class mail, postage prepaid
 to the physical address of the lot and the lot owner's address of record with the association, and,
 if different, to the address for the lot owner shown on the county tax records and the county real
 property records for the lot. The association shall also send a copy of the claim of lien and
 certificate of service via electronic mail to the lot owner. In the event that the owner of record is
 not a natural person, and actual service is not achieved, the person signing the claim of lien on
 behalf of the association shall be deemed to have met the requirements of this subsection if
 service has been attempted once pursuant to the applicable provisions of G.S. 1A-1, Rule 4(j)(3)
 through G.S. 1A-1, Rule 4(j)(9). Notwithstanding anything to the contrary in this Chapter, the
 association is not required to mail a claim of lien to an address which is known to be a vacant lot
 on which no dwelling has been constructed or to a lot for which there is no United States postal
 address. A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are
 instituted within three years after the filing of the claim of lien in the office of the clerk of superior
 court.
     …."
              SECTION 3. This act is effective when it becomes law.
     DRH30234-NK-28                                                                                    Page 3
Statutes affected: 
Edition 3: 161-14, 45-21.4, 45-21.23
Edition 4: 161-14, 45-21.4, 45-21.23