The North Carolina HOA laws update for 2025 features three major bills that could change how community associations operate across the state. These bills are House Bill 444, Senate Bill 378, and House Bill 372.
North Carolina HOA Laws Update: What’s New in 2025?
The North Carolina HOA laws update includes significant legislative changes affecting planned communities and condominium associations. Lawmakers often review HOA statutes, and this year they focus on strengthening member rights, introducing dispute processes, and improving financial transparency.
House Bill 444: Homeowners Association Reform Bill
Introduced March 18, HB 444 is one of the new North Carolina HOA laws 2025. This bill makes targeted changes to governance, contracts, fees, budgets, and homeowner rights.
It passed its first reading, was referred to several committees, and then passed the House committees. Unfortunately, that’s where it currently remains pending review and has not been fully passed into law yet.
Amendments to HOA Declarations
One of the most impactful provisions in House Bill 444 is that any amendment to an HOA’s declaration will apply only to property owners who purchase or acquire their home after adopting the amendment. Current owners are not subject to new rules until they sell or transfer their property, protecting them from sudden changes to community regulations.
Management Contract Limits
The bill limits HOA management contracts to one year. It also prohibits automatic renewal clauses that require more than 30 days’ notice for nonrenewal.
If the contract automatically renews, it must be terminable with at least 60 days’ notice. This gives boards more flexibility to make management changes when necessary.
Parking on Public Roads
HB 444 would limit an HOA’s authority to regulate parking on public streets. The exception is if the local government or the NCDOT expressly delegates this power to the HOA. Any delegation must also be renewed every five years.
Financial Transparency
Associations must prepare and deliver an annual income and expense statement within 75 days of the fiscal year’s close. Homeowners would also have the right to inspect management contracts under reasonable conditions.
Budget Approval Rules
The bill introduces tighter controls on spending increases. Any proposed annual budget that raises common expenses by more than 10 percent must receive majority approval from homeowners. Mid-year increases exceeding 5 percent would also require owner approval before taking effect.
Regulation of Fees and Fines
HB 444 caps fees for lender questionnaires and statements of unpaid assessments at $200, with expedited requests capped at an additional $100. No other transfer-related fees can be charged unless authorized by law.
Property Change Requests
The bill gives associations 90 days to decide on architectural or property modification requests. Associations must issue any denials in writing and include the reasons for the decision, along with a process for reconsideration.
Due Process for Fines and Suspensions
Before imposing fines or suspending privileges, HOAs must give homeowners notice, an opportunity for a hearing, and a chance to respond. Fines would be limited to $100 per violation, with a maximum of $2,500 for ongoing issues.
Pre-Litigation Mediation
Most disputes between HOAs and homeowners must go through mediation before any court action. This is designed to encourage early resolution and reduce legal costs.
DOJ Oversight
The North Carolina Department of Justice would be responsible for collecting and reporting HOA complaint data annually. This would improve transparency and provide a clearer picture of association-related disputes across the state.
Senate Bill 378: HOA Revisions
SB 378 builds on HB 444 but expands operational rules and enforcement safeguards. It’s one of the new HOA laws in North Carolina, but it hasn’t passed the House or become law.
Management Contracts
Senate Bill 378 permits HOA management contracts to run for up to two years but prohibits automatic renewals, requiring more than 60 days’ notice to terminate. If a contract does renew automatically, it must allow termination for any reason with at least 90 days’ notice.
Prohibited Management Fees
The bill bans management companies from receiving compensation based on the amount of fines they collect from owners or the association.
Parking Restrictions
Associations can’t regulate personal vehicle parking on public streets unless they have explicit delegation from a local government or the DOT. The term “personal vehicle” does not include motor homes, RVs, or commercial vehicles.
Home-Based Lessons
SB 378 prohibits associations from fining homeowners for hosting small-scale lessons, such as tutoring, music lessons, or other educational activities, provided that no more than 5 people are present at any time. This applies regardless of time or noise concerns.
Lender Questionnaire and Transfer Fee Rules
The bill mirrors HB 444’s limits by capping lender questionnaire fees at $200 and expedited fees at $100. Violations would be considered unfair and deceptive trade practices.
Copying Costs for Records
Associations may charge only the actual cost of photocopying when providing copies of HOA records.
Architectural Review Standards
SB 378 requires that all architectural decisions be made in good faith within 90 days of submission. Denials must come in writing, include reasons for the decision, and outline a process for reconsideration.
Violation Hearings and Fine Limits
Homeowners must receive at least 10 days’ notice before any violation hearing. The board must then communicate the decision in writing afterward. This includes details on the violations and the necessary corrective action.
Additionally, fines have a limit of $100 per day and $2,500 total per violation. Associations must file any lien for fines within 90 days.
Collection of Delinquent Assessments
Notices for delinquent assessments must be sent by both mail and email if the owner has provided an email address. Liens for fines expire unless enforced within one year. Plus, foreclosure can’t begin until the owner is at least 180 days delinquent.
Attorney’s Fees
In assessment collection cases, courts may require the HOA to pay its own attorney’s fees rather than passing the cost to homeowners.
Contract Transparency
Owners would have the right to inspect contracts between the association and its management company with proper notice.
Automatic License Plate Readers
Any association that uses automatic license plate readers must maintain written policies for their use.
Mandatory Mediation
Most disputes, except those involving assessment collections, would have to go to mediation before litigation could proceed.
DOJ Complaint Oversight
The Department of Justice would collect and publish data on homeowner complaints against associations, creating a public record of issues statewide.
House Bill 372: Consolidated Reform Bill
HB 372 started as a home-based business fairness bill but now incorporates most of SB 378’s provisions, creating a single reform package. The bill remains under consideration.
Management Contract Rules
House Bill 372 adopts SB 378’s two-year limit on management contracts and the restrictions on automatic renewals.
Fee Caps and Prohibitions
The bill retains the $200 lender questionnaire fee cap, the $100 expedited fee limit, and the classification of violations as unfair and deceptive trade practices.
Parking Authority
Like SB 378, HB 372 prevents HOAs from regulating personal vehicle parking on public streets unless they receive formal government or DOT delegation.
Home-Based Lesson Protection
The protections for small-scale educational activities with no more than five participants are preserved in this bill.
Architectural Review
HB 372 keeps the 90-day decision limit, written denial requirements, and appeal process from SB 378.
Fine and Collection Rules
It maintains the $100-per-day and $2,500-total-fine limits, the 180-day threshold for foreclosure, and the dual-notice requirement for delinquencies. It also eliminates judicial foreclosure for fines, replacing it with a civil court process.
Mediation and DOJ Oversight
The mediation requirement and Department of Justice reporting provisions are carried over from SB 378.
In the Future
Together, these measures could form the most substantial North Carolina HOA laws 2025 reform package in a long while. While they have yet to pass, they mark a significant shift in the HOA landscape in the state and could indicate future changes.
An HOA management company can help associations navigate NC law changes. Start your search with HOA Explore!
