North Carolina HOA Assessment Limits

Section 1: Overview

North Carolina sets no flat percentage cap on assessment increases. Under both the Planned Community Act and the Condominium Act, the executive board adopts the annual budget — and that budget stands unless a majority of all owners affirmatively reject it at a ratification meeting, with no quorum required.¹ The North Carolina Planned Community Act, N.C. Gen. Stat. Chapter 47F, took effect January 1, 1999, and governs planned communities. The North Carolina Condominium Act, N.C. Gen. Stat. Chapter 47C, governs condominiums created on or after October 1, 1986. Both statutes belong to the uniform common-interest legislation family.² An applicability split determines who holds the ratification right: § 47F-3-103(c) reaches planned communities created on or after January 1, 1999, while pre-1999 planned communities follow their own declarations on budget increases unless they opt into the Act. The Condominium Act's executive-board section applies to condominiums regardless of creation date.² Neither Act separately caps special assessments; their authorization and limits come almost entirely from the recorded declaration, supplemented by the assessment sections at § 47F-3-115 and § 47C-3-115.³ On the national assessment-limit spectrum, North Carolina sits in the ratification-mechanism camp rather than the statutory-cap camp led by California — controlling increases through an owner veto on the adopted budget rather than a numeric ceiling.⁴ The sections below detail the framework, the procedures in practice, recent legislative and judicial activity, and where a proposed 10 percent owner-approval threshold now stands.

Section 2: The assessment framework

2A. Authority to levy and allocate assessments

In planned communities, the owners' association carries the power to adopt budgets and collect assessments for common expenses from lot owners. Section 47F-3-115 establishes that after the association makes its first common-expense assessment, assessments run at least annually against all lots in accordance with the allocations the declaration sets out.³ The board's general authority to act for the association — including adopting the proposed budget — rests in § 47F-3-103.¹ In condominiums, the parallel authority appears in § 47C-3-103 (executive board) and § 47C-3-115 (assessments for common expense), under which the association assesses common expenses against the units in proportion to their common-expense liabilities as the declaration fixes them.^5,6

Under both Acts, certain costs follow a different allocation formula from the general rule: the cost of maintaining a limited common element is assessed against the lots or units it serves; an expense benefiting fewer than all lots or units is assessed only against those benefited; insurance is assessed in proportion to risk; and utilities are assessed in proportion to usage.³

The applicability split is central. Section 47F-1-102 lists the planned-community sections that apply retroactively to communities created before January 1, 1999. That list includes § 47F-3-115 (assessments) and § 47F-3-116 (lien), but carries only subsection (f) of § 47F-3-103 — not the budget-ratification subsection (c).² The practical result: pre-1999 planned communities are bound by the assessment and lien rules but not by the statutory budget-ratification right. Their budget-increase controls come from the declaration. A pre-1999 planned community may opt into the full Act by amending its declaration with the affirmative vote or written agreement of owners holding at least 67 percent of the votes — or any smaller majority the declaration specifies.²

On the condominium side, § 47C-1-102 applies Chapter 47C to condominiums created on or after October 1, 1986, and separately makes a set of sections — including the entire § 47C-3-103 and § 47C-3-116 — applicable to condominiums created on or before that date.⁷ Condominiums created before October 1, 1986 otherwise fall under the Unit Ownership Act, N.C. Gen. Stat. Chapter 47A.⁸ In every case, the declaration controls the allocation formula that converts the total budget into each owner's individual assessment.

2B. Limits on regular assessment increases

The operative limit on a regular increase is procedural, not numeric. Under § 47F-3-103(c) for planned communities and § 47C-3-103(c) for condominiums, within 30 days after the board adopts a proposed budget, it must provide all owners a summary of that budget and notice of the meeting to consider ratification — including a statement that the budget may be ratified without a quorum.^1,5 The board must schedule the ratification meeting for not less than 10 nor more than 60 days after mailing the summary and notice. The budget is ratified unless, at that meeting, a majority of all owners — or any larger vote the declaration specifies — rejects it.¹ This is ratification by rejection: owner inaction ratifies the budget and any increase it contains, and no quorum is required.

North Carolina imposes no flat percentage cap on the size of a regular increase, and current law contains no statutory affirmative-approval threshold.¹ A 10 percent affirmative-approval threshold — under which ratification of a budget that would increase the prior year's common-expense liability by more than 10 percent would require approval by a majority of all owners, unless the increase is expressly allowed in the declaration — has been proposed but not enacted.⁹ That proposal first appeared in House Bill 959 (2023-2024), which died when the session ended. It has been reintroduced in House Bill 444 (2025-2026), the "Homeowners Association Reform Bill," filed March 18, 2025 by primary sponsors Rep. Ya Liu and Rep. Frank Iler, which remains pending in House committee.^10,11 Until such a bill is signed and takes effect, the only statutory control on a regular increase is the ratification-by-rejection mechanism described above.

If owners reject a budget at the ratification meeting, statute specifies the consequence: the periodic budget last ratified by the owners continues in effect until the owners ratify a subsequent budget the board proposes.¹ Pre-1999 planned communities, which do not hold the statutory ratification right, handle increases according to their declarations. Some pre-1999 declarations contain a cap — for example, a ceiling on annual increases above a stated percentage without a member vote. Where the declaration is silent, owners in those communities have no statutory veto and must address an unpopular budget through board elections or removal.²

2C. Special assessments, the lien, and foreclosure pre-conditions

Neither Act contains a separate special-assessment statute with a numeric cap or a mandatory owner vote. Special assessments are authorized and limited principally by the declaration, supplemented by the assessment sections — § 47F-3-115 and § 47C-3-115 — which address assessments to pay a judgment against the association and assessments charged to a single owner whose negligence or misconduct caused a common expense.^3,6 A board contemplating a special assessment looks first to the declaration for any vote, notice, or purpose limitation.

Unpaid sums due the association become a lien under § 47F-3-116 (planned communities) and § 47C-3-116 (condominiums). An assessment that sits unpaid for 30 days or longer constitutes a lien once the association files a claim of lien with the clerk of superior court.^12,13 The association may foreclose that lien by power of sale in the manner of a deed of trust under Article 2A of Chapter 45, but only if the assessment has remained unpaid for 90 days or more and only after the executive board votes to commence the proceeding against the specific lot or unit.¹³ A lien securing a debt that consists solely of fines, interest on fines, or fine-related attorneys' fees cannot be foreclosed by power of sale; the association must instead pursue judicial foreclosure.¹³ Current law contains no requirement that the delinquency reach six months of assessments or $2,500 before foreclosure, and no requirement that the association first offer an installment plan. Those pre-conditions are part of the pending HB 444 and are not in force.¹¹ Operationally, the controlling rules a board must satisfy today are the 90-day delinquency, the board vote, and strict compliance with statutory notice and service requirements.

Section 3: Assessment limits and procedures in practice

A. Regular assessment increase procedure

The board adopts a proposed budget, provides all owners a budget summary and ratification-meeting notice within 30 days, and holds the meeting 10 to 60 days after mailing. The budget and its increase are ratified unless a majority of all owners reject it — no quorum required (§ 47F-3-103(c); § 47C-3-103(c)).^1,5 This applies to planned communities created on or after January 1, 1999, and to condominiums regardless of creation date. Pre-1999 planned communities follow their declarations.²

B. Special assessment procedure

Special assessments are authorized and limited by the declaration. The Acts supply no separate cap or mandatory owner vote; the assessment sections address only judgment-related and fault-based assessments (§ 47F-3-115; § 47C-3-115). This rule is declaration-defined for both planned communities and condominiums, with no general statutory special-assessment rule.^3,6

C. Caps, ceilings, and override mechanisms

North Carolina supplies no flat percentage cap on regular or special assessments. The only statutory control is the ratification-by-rejection mechanism, and any larger rejection vote must come from the declaration (§ 47F-3-103(c); § 47C-3-103(c)).¹ A 10 percent affirmative-approval threshold is proposed in HB 444 (2025-2026) but is not law.⁹ This applies to post-1999 planned communities and to condominiums; pre-1999 planned-community ceilings are declaration-defined.

D. Notice, documentation, and disclosure tied to assessments

The board must deliver a budget summary and ratification-meeting notice (§ 47F-3-103(c); § 47C-3-103(c)). On request, the association must furnish a statement of unpaid assessments within 10 business days; it may charge a fee not exceeding $200 per statement, plus an additional fee not exceeding $100 if the request arrives within 48 hours of closing (§ 47F-3-118(b)).¹⁴ Before filing a claim of lien, the association must make diligent efforts to confirm the owner's current address and mail a statement of the amount due at least 15 days in advance (§ 47F-3-116; § 47C-3-116).¹³ These provisions apply to planned communities — including pre-1999 communities, because § 47F-3-116 and § 47F-3-118 are on the retroactive list — and to condominiums.²

Section 4: Recent legislative and judicial activity

A. Recent bills

Two bills have carried the reform proposals on North Carolina assessment limits in recent sessions. House Bill 444 is the active vehicle; House Bill 959 was the predecessor that did not survive its session.

B. Recent appellate rulings

Two cases shape the foreclosure landscape for North Carolina assessment liens: one decided in 2025, one from 2021 that continues to carry weight in how courts evaluate procedure and price at lien foreclosure sales.

C. Active legislative debates

HB 444 remains the active vehicle for a 10 percent owner-approval threshold on large increases and for tighter foreclosure pre-conditions. Related 2025 measures — Senate Bill 378 and House Bill 372 — propose overlapping fee, fine, and collection changes. As of June 9, 2026, none has been enacted.¹⁰

Section 5: National positioning and related coverage

North Carolina sits in the middle band of a three-part national spectrum. At one end are statutory-cap states, led by California, where Cal. Civ. Code § 5605(b) provides that "the board may not impose a regular assessment that is more than 20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of a majority of a quorum of members."¹⁸ North Carolina belongs to the ratification-mechanism group in the uniform common-interest family — alongside Alaska, Colorado, Connecticut, Delaware, Maine, Minnesota, Missouri, Vermont, and Washington — controlling increases through an owner veto on the adopted budget rather than a numeric ceiling.⁴ At the third end are declaration-driven states such as Alabama, Arkansas, and Georgia, where assessment limits come almost entirely from the recorded declaration.

For multi-state operators entering North Carolina, compliance turns on running the ratification meeting correctly and reading each declaration — not on tracking a percentage cap. Operators should note that the 10 percent owner-approval threshold often described as a 2024 change was never enacted and remains a pending proposal.¹¹ Federal frameworks, including the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, and the bankruptcy treatment of assessments, also bear on North Carolina assessment practice regardless of the state framework.

1. N.C. Gen. Stat. § 47F-3-103 (Executive board members and officers), North Carolina General Assembly. ↩
2. N.C. Gen. Stat. § 47F-1-102 (Applicability), North Carolina General Assembly. ↩
3. N.C. Gen. Stat. § 47F-3-115 (Assessments for common expenses), North Carolina General Assembly. ↩
4. Uniform Common Interest Ownership Act (UCIOA), Community Associations Institute. ↩
5. N.C. Gen. Stat. § 47C-3-103 (Executive board members and officers), North Carolina General Assembly. ↩
6. N.C. Gen. Stat. § 47C-3-115 (Assessments for common expense), North Carolina General Assembly. ↩
7. N.C. Gen. Stat. § 47C-1-102 (Applicability), North Carolina General Assembly. ↩
8. N.C. Gen. Stat. Chapter 47A (Unit Ownership Act), North Carolina General Assembly. ↩
9. Bill Summary for H 444 (2025-2026), UNC School of Government Legislative Reporting Service. ↩
10. House Bill 444 (2025-2026 Session), bill history and status, North Carolina General Assembly. ↩
11. House Bill 444 (2025-2026), bill text Edition 3, North Carolina General Assembly. ↩
12. N.C. Gen. Stat. § 47F-3-116 (Lien for sums due the association; enforcement), North Carolina General Assembly. ↩
13. N.C. Gen. Stat. § 47C-3-116 (Lien for sums due the association; enforcement), North Carolina General Assembly. ↩
14. N.C. Gen. Stat. § 47F-3-118 (Association records), North Carolina General Assembly. ↩
15. Bill Summary for H 959 (2023-2024), UNC School of Government Legislative Reporting Service. ↩
16. In re Foreclosure of a Claim of Lien by Irish Creek Section 2 Owners' Association (Rogers), COA24-788 (N.C. Ct. App. Oct. 1, 2025), North Carolina Judicial Branch. ↩
17. In re Foreclosure of George, 377 N.C. 129, 856 S.E.2d 483 (2021), North Carolina Judicial Branch. ↩
18. Cal. Civ. Code § 5605 (Assessment increases; requirements and limitations). ↩