I recently had a homeowner’s association question regarding the conveyance of common elements. Basically, the HOA owned property between a small river and about six member lots. The HOA and the rest of the property owners did not have any access to the property except by the river. The land is mostly marsh and wetlands and therefore is not buildable. There were a few existing dilapidated docks on the property that had been used in the past by the six property owners and sporadically by other property owners accessing from the river or accessing through one of the six lots by permission or without permission when the lots were vacant. Rather than continue to pay taxes on the marshland and pay to maintain the marshland when they were seldom used by the entire community, the HOA wanted to sell the property to the six owners.
While an HOA in North Carolina has fairly broad powers by statute, which include entering into contracts with third parties and the use and management of common areas, when an HOA wants to sell, give away, or otherwise convey a piece of the common areas, they are much more limited. Under the Planned Community Act, at least 80% of the members of the HOA need to approve the conveyance in writing. Because this provision of the Planned Community Act does not apply retroactively, a planned community created prior to January 1, 1999 may have an even harder time conveying the property. Unless the declarations say otherwise, in these older planned communities, the transfer cannot be made unless 100% of all the members agree in writing.
My association was one of these older ones, with no provision in their declarations. Therefore unless they can get in writing from all members that they can convey the marshland, they will not be able to get rid of it and will continue to have the duty to maintain the property.
-Bradley A. Coxe is a practicing attorney in Wilmington, NC who practices in Personal Injury, Car Accidents, Medical Malpractice, Contract and Real Estate disputes, and all forms of Civil Litigation. Please contact him at (910) 772-1678.