One of the more frustrating things a homeowner association board deals with is unpaid assessments. I’ve written before about how the fees and costs of collecting a valid assessment can greatly exceed the amount of the assessment. Occasionally, a board will try and put social pressure on delinquent owners to pay by publishing lists of the owners who have failed to pay and the amounts they owe. I don’t know how effective these “shame lists” are, but they are not allowed under North Carolina law. First, HOAs are subject to North Carolina’s Debt Collection Act for the collection of unpaid assessments. This Act prohibits certain acts undertaken to collect a debt. One of the prohibitions is against publishing such a list of homeowners who have failed to pay their assessment. Second, the publishing of such a list would open the HOA up to a defamation lawsuit if the list was not true and accurate. A listed owner would therefore have a strong case against the HOA for publishing a list and could receive not only his actual damages, but his attorney fees as well.
Note that if a member of the HOA was to ask for financial information pursuant to his right to review financial records and minutes of the HOA, that information may be disclosed to that member.
-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.