The NC General Assembly has passed House Bill 806 that requires:

1. The homeowners associations to make a reasonable and diligent effort to locate and notify a lot
owner prior to filing a claim of lien for assessments.

The written notice must include a statement of the assessment amount due and must
be sent by first-class mail to the owner at all of the following addresses if different:

  • The physical address of the lot/unit within the community;
  • The owner’s address of record with the Association;
  • The address for the owner shown on the county tax records;
  • The address for the owner shown on the county real property records for the lot or unit; and,
  • If the owner is a corporation, the address of the registered agent listed with the Secretary of State.

2. The lien paperwork from the attorney’s office must be sent by certified mail. The attorney’s office must also provide proof that it made a reasonable effort to contact the homeowner. The attonrey will have to provide an affidavit affirming this fact. The first page of the lien must also include this verbiage

THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE LIEN IS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH FORECLOSURE AGAINST YOUR PROPERTY IN LIKE MANNER AS A MORTGAGE UNDER NORTH CAROLINA LAW.


Conclusion
The laws governing collections by Associations will become more complicated and labor intensive on and after October 1, 2009. Associations will be required to take additional steps before and during the collection process in order to file claims of lien properly and to collect on them through the foreclosure process. As a result, Associations should review and update their collection policies and procedures, including routine updating of owner information, to ensure that they can navigate effectively through the new statutory framework.

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