Debate looms over the power of HOAs, are they effective? - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Debate looms over the power of HOAs, are they effective?

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CHARLOTTE, NC (WBTV) - Jim Land faced foreclosure and thousand of dollars in fines after planting flowers in a common area of his Gilead Ridge neighborhood.

"I thought the whole thing was an absolute joke until I got notice of collections and then a lien and then a foreclosure," Land said.

It prompted Land to look at the power of homeowners associations in the state. He started a website as an online support group designed to create awareness about the lack of HOA laws.

He even got the attention of lawmakers. Representative Bill Brawley says, "There are two concerns I have. [One] that a homeowner may have fewer protections against the association than a tenant does against a landlord from a home that the tenant rents...and it also seems to me it's easy that a home owner's association run up a big number of fines...and foreclose on a property easier than a mortgage holder can on someone that's not making the payments."

"The issue is we have boards of directors that don't know how to run $300,000 business," Land said.

Brawley says he's directed his legislative staff to study the issue.

"Homeowners associations aren't a creation of the law - they are contracts usually drawn by the developers and because of that may have power that the lawyers put in that may not be fair and don't offer constructional protection like the 5th amendment," Brawley said. "I want to make sure the homeowner is protected while the home owners association have sufficient authority to do what they reasonably should be able to do."

President of HOA-USA Jim Laumann told WBTV HOAs exist for several reasons. State law requires one anytime a community has more than 20 homes. There's 18-thousand HOAs in North Carolina. Laumann says the biggest benefit of an HOA - it helps protect property values. "It sets a certain standard for the community," Laumann said.

A new law set to go into effect October 1 requires HOAs to wait until fines are 90 days overdue before beginning foreclosure procedures. Laumann thinks this particular legislation is positive. He's not sure the state needs something more.

"In many states where they've created a state agency with oversight of gets so bogged down in the becomes ineffective," Laumann said.

Laumann thinks HOAs get a bad rap for several reasons. But says he usually sees things get out of hand when folks ignore letters or fight a case when it's clear cut.

"If the HOA isn't fair and deliberate about collecting the funds then they don't have the money to run the association and that may mean turning off the street lights or closing the pool for the season," Laumann said.

Jim Land and some legislators say it could be several years before they find middle ground. "The biggest thing is the homeowners getting past the fear of standing up, [saying] I'll just pay the fine because I don't want to lose my home," Land said.

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