/>iHomeowners’ Associations (HOAs) play a critical role in managing residential communities across North Carolina.
Their governing documents, specifically the Declaration of Covenants, Conditions, and Restrictions (commonly called CC&Rs, covenants, or the declaration), and Bylaws, establish the legal and operational framework for how a community is governed. As communities evolve, the need to amend these documents may arise to address outdated provisions, clarify ambiguities, or adapt to new laws and homeowner preferences. The amendment process must be handled with care and in full compliance with North Carolina law.
Legal Framework: 47F and 47C
In North Carolina, the legal authority for HOA governance is primarily derived from Chapter 47F of the North Carolina General Statutes, known as the North Carolina Planned Community Act (the "PCA"), which governs all single-family home subdivisions and planned unit developments created on or after January 1, 1999. Condominiums are governed by Chapter 47C of the North Carolina General Statutes, known as the North Carolina Condominium Act (the "Condo Act"), which applies to all condominium communities created on or after October 1, 1986. These statutes provide default procedural rules, including requirements for notice, voting thresholds, and the recording of amendments.
For planned communities formed before January 1, 1999, the amendment process for the bylaws and declaration is governed primarily by the language in the governing documents themselves, and by the North Carolina Nonprofit Corporation Act ("Chapter 55A") for amendments to Bylaws. For condominiums formed before October 1, 1986, the amendment process for the Bylaws and declaration is governed by Chapter 47A of the North Carolina General Statutes and the language in the governing documents themselves (and Chapter 55A for amendments to Bylaws).
Step 1: Review Governing Documents
The first step in the amendment process is to thoroughly review the HOA’s declaration and bylaws. These documents typically contain their own provisions describing how amendments may be proposed and approved, including who is authorized to initiate an amendment – often the board of directors or a group of homeowners through a petition – and the percentage of votes required for adoption. Under the PCA, unless the declaration provides a higher threshold, an amendment to a planned community’s declaration requires the approval of the owners of lots to which at least 67% of the total votes in the association are allocated. The same threshold applies to condominium declarations under the Condo Act, provided that amendments that create or increase declarant rights, increase the number of units, change the boundaries of units, change the allocated interest of a unit, or change the uses to which a unit is restricted require unanimous consent of all the unit owners.
The Condo Act also provides a method for amending the declaration without 67%-member approval in certain circumstances. The executive board may propose amendments to the declaration without a vote of all unit owners to correct errors, comply with legal or lending requirements, or accommodate persons with disabilities, so long as such amendments are not explicitly prohibited by the declaration or the Condo Act. These amendments are considered ratified unless a majority of unit owners reject them at a meeting held within 10 to 60 days after notice.
Amendments to bylaws are generally subject to less stringent requirements than declarations. Under the Planned Community Act and Condo Act, the association’s executive board is authorized to adopt bylaws. However, amendments to the bylaws require a membership vote, as governed by Chapter 55A, which requires that amendments to bylaws be approved by the members by two-thirds of the votes cast or a majority of votes entitled to be cast, whichever is less. The association's governing documents may require a greater vote, but cannot require a lesser vote.
Step 2: Drafting the Amendment
After confirming the applicable process and voting requirements, the next step is to carefully draft the proposed amendment. Legal counsel should be consulted to ensure that the amendment language is clear, enforceable, and does not conflict with any existing provisions or applicable law. A well-drafted amendment should avoid ambiguity, align with North Carolina statutes, and be internally consistent with the rest of the association’s documents. Poorly drafted language can lead to confusion, disputes, or litigation, and may ultimately be found unenforceable by a court. Even if statutory requirements are met, homeowners may still challenge an amendment by arguing that it fails to meet the "reasonableness" and "original intent" tests established by North Carolina courts.
Step 3: Notice and Voting
Before a vote can be held, members must be provided with adequate notice. Under both the PCA and the Condo Act, at least 10 days’ notice (and no more than 60 days) must be given for any meeting of the association membership. The notice must clearly explain the proposed amendment and provide clear instructions for how members may vote. The notice should also explain the rationale behind the proposed change. Voting procedures may vary and can include in-person meetings, mail-in ballots, or electronic voting, provided these methods are permitted under the association’s governing documents or adopted rules.
Step 4: Approval and Recording
Once the amendment has been approved by the required percentage of votes, the final step is to properly document and, if necessary, record the amendment. Amendments to the declaration must be recorded with the Register of Deeds in the county where the community is located, in accordance with the PCA and Condo Act. Without proper recording, even a validly approved amendment may not be legally enforceable.
Amendments to the bylaws, on the other hand, generally do not require recording in the Register of Deeds. However, they should be dated, clearly written, and retained in the association’s official records for transparency and future reference.
Conclusion
Amending HOA bylaws and covenants in North Carolina requires careful adherence to both the association’s governing documents and applicable state law. By understanding and following the procedures set forth under North Carolina law and seeking legal guidance when needed, associations can implement changes that are legally sound and reflective of the community’s evolving needs. When properly executed, amendments strengthen governance, improve clarity, and help preserve the integrity and functionality of the homeowners’ association for years to come.
