Do homeowners need to pay for HOA records? Rewriting covenants?

Q: I recently requested records from my condominium’s property management company. They told me that they only have records for the past two years that they can email to me at no cost, and that the prior six years’ worth of records are in a storage unit.  In order to inspect them, I would need to schedule a time to come to their offices to review the records.  Is this correct? Or can they provide me with copies that I can take home?

A: If your HOA is like most in North Carolina, it is organized as a nonprofit corporation. Under the North Carolina Nonprofit Corporation Act, the HOA can require you to pay a reasonable fee for producing the records for inspection and also for copying the records, if that is requested.

The statute, which is N.C. Gen. Stat. § 55A-16-03(c), reads, “the corporation may impose a reasonable charge, covering the costs of labor and material, for producing for inspection or copying any records provided to the member. The charge shall not exceed the estimated cost of production or reproduction of the records.”

What is best way to adopt a new set of covenants?

Q: Can my HOA completely replace its current covenants with an entirely new set containing dozens of changes and new restrictions, with a single yes or no vote by each member, or must each separate change to the language of the existing covenants be voted on separately?

A: I have seen major covenant revisions handled both ways. Sometimes, each proposed change is listed separately on the ballot with a space for the owner to mark “for” or “against.”

However, in cases of older HOAs or condominiums with outdated covenants, we often find it simpler and less expensive to draft an entirely new set of covenants than to have an amendment with dozens of changes spelled out.

There have been so many changes to the laws and our knowledge of the mechanics of running a community have expanded so much in the last several years, that a comprehensive rewrite of the covenants is often the better choice.

The North Carolina Nonprofit Corporations Act says only that written ballots must describe each proposed action and provide an opportunity for members to vote for or against each action. Voting on the adoption of an “amended and restated” Declaration of Covenants, Conditions and Restrictions would constitute a single action by the members.

This article was originally published in the Charlotte Observer’s “Association Answers” column on August 21, 2014.  ©  All rights reserved

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