Q. Is it possible for an HOA to file a foreclosure on a residence without an attorney?
As to whether a non-lawyer can file foreclosures, I checked with David Johnson, an attorney with the N.C. State Bar.According to Johnson, the N.C. Court of Appeals has held that corporations may not appear before the courts unless represented by counsel, except for cases in small claims court or to avoid the entry of a default in a higher court. Because a foreclosure proceeding requires the preparation and drafting of court pleadings and a court appearance, an incorporated HOA may not lawfully conduct its own foreclosure without an attorney.
Before an HOA can file a foreclosure, it must file a claim of lien on the property sought to be foreclosed upon, and before the HOA can file a claim of lien, at least a cursory examination of the title to the subject property must be performed.
At this point, the question of whether an HOA may prepare and file its own liens is unsettled, as neither the N.C. courts nor the State Bar Committee that oversees the unauthorized practice of law has addressed the issue.
As a practical matter, if you or someone on your HOA board is familiar with real estate titles and research, it is certainly possible for a non-lawyer to do the title research, and draft and file the lien, but I would not recommend it for anyone without a solid grasp on the principles of real estate law.
There were significant changes made to the procedures for filing and serving liens within the last few years, and if these procedures are not strictly followed, a claim of lien and any resulting foreclosure could be defective. The safest approach is to allow an attorney to handle the filing of the claim of lien and the foreclosure.
Charlotte attorney Michael Hunter focuses on community and condominium association law for the firm of Horack Talley.
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“Ask The Experts” Articles have been Reprinted with permission from the Charlotte Observer
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