Category Archives: Ask the Experts

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Condo parking space hog

 

Q. A homeowner in our association has been parking a vehicle with no tag in one of his two parking spaces for over three years. He has two other drivable vehicles taking up parking spaces in the guest parking area. Our rules state that uninspected, unregistered, unlicensed, abandoned or junk vehicles are not permitted on condominium property and further, that no vehicle may be stored on the common or limited common property. What can be done about this?

Part of the answer to your question depends on whether an owner’s assigned parking spaces are deeded to the owner along with his unit, or if they are common elements.If the spaces are deeded, then the association’s board, by itself, cannot impose additional restrictions on the use of those deeded spaces on top of whatever restrictions are already in the declaration. Adding additional restrictions to property owned by the homeowner would require an amendment to your declaration, approved by at least two-thirds of the voting power in the association.

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Are unpaid dues protected in bankruptcy?

Q. Is the debt of an uncollected homeowners association annual dues assessment considered a “secured debt” when filing a Proof of Claim if the owner files for bankruptcy, since it involves real estate (vacant land or land with a home)? Or is it just an unsecured debt?

Creditors of a bankrupt person who has filed for protection are generally lumped into one of two categories by the federal Bankruptcy Code: secured creditors and unsecured creditors. To understand the difference, it is important to understand the difference between a debt and a lien. A debt is a legal obligation to pay money to a creditor. A lien, on the other hand, is a property interest held by the creditor that secures the underlying debt. Thus, secured creditors hold a lien on certain property owned by the debtor (real estate, motor vehicle, equipment, etc.), while unsecured creditors do not have a lien on property owned by the debtor.A Chapter 7 or completed Chapter 13 plan will discharge most or all of a person’s debts, but many liens will survive the bankruptcy discharge, meaning that the creditor may still repossess or foreclose on the collateral even though the debt has been discharged. While this may seem counterintuitive, it makes sense if you think of a mortgage loan. If the lender’s mortgage lien on a home were wiped out by a bankruptcy filing along with the underlying debt, then that would mean any homeowner who filed bankruptcy could keep his house free and clear of the lender’s debt. Certainly that is not the result that Congress intended with the Bankruptcy Code.

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Get advice from expert on reserve fund needs

Q. I am the board secretary for a condo community on Lake Norman. We have 60 units and are about 25 years old. We strive to keep everything in good order but things happen. My question concerns setting amounts for reserve funds.

We have looked into having a professional “reserve study” done but the cost, from $4,000 to $5,500, is expensive for us. Do you have a rule of thumb that might give us some guidance? Is there a Web site that you can suggest for me to search? Are there reserve requirements in North Carolina as there are in some other states that set limits?Most HOAs that have clubhouse/swimming pool, trails, athletic fields, etc. have capital accounts, also known as reserve funds, to pay for upkeep and replacement. Condominium associations are responsible for maintaining the buildings themselves, so capital reserves are absolutely critical for them. Most HOAs allocate a portion of each month’s assessment income to these accounts.

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Do HOAs have any clout in prohibiting sex offenders?

Q. We live in a small neighborhood in Union County with a volunteer board of directors. A few families are interested in adding a amendment to our covenants, conditions and restrictions (CCRs) prohibiting sex offenders from residing in our neighborhood. The board went to our attorney last year and was informed that we could spend the money to try to do this, but he doubted it would hold up in the courts if the sex offender is registered and living by the law. Your advice?

Dealing with residents who are convicted felons or sex offenders is a growing concern. It is possible to ban such persons from renting a home by amending the CCRs to adopt specific leasing restrictions that give the HOA board the authority to approve or reject all proposed leases.But attempting to ban such persons from purchasing a home likely would be found unenforceable by the courts. While felons and sex offenders are not considered a “protected class” under anti-discrimination laws, it is possible that a restriction that prohibits sex offenders from purchasing a home in your community would not be upheld by the courts, or worse, expose the HOA to a potential civil rights claim.

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