In North Carolina, a homeowners association (HOA) has significant power to enforce unpaid assessments against homeowners. Under North Carolina General Statute § 47F-3-116, when an assessment goes unpaid for 30 days or longer, a HOA can typically obtain a lien against the homeowner's lot.
What is the effect of a lien for a HOA in North Carolina?
A lien creates an encumbrance on the lot which can prevent a homeowner from selling or refinancing the lot until the assessment is paid. The HOA also has the power to enforce the lien by initiating foreclosure proceedings with the Clerk of Court in the county where the lot is located. Foreclosure proceedings allow the HOA to recover the amount owed by forcing a sale of the lot in a similar matter that a bank can enforce a mortgage.
A HOA can also enforce its rights by seeking a judgment in small claims court. Once a judgment is obtained and properly docketed, it can become a lien against any real estate held by the homeowner in North Carolina.
