North Carolina HOA Collections & Liens

Overview — How assessment collection and liens work in North Carolina

North Carolina built its HOA lien framework on two separate statutes rather than one unified code. The North Carolina Condominium Act (Chapter 47C) governs condominiums created on or after October 1, 1986, and the North Carolina Planned Community Act (Chapter 47F) governs planned communities created on or after January 1, 1999.¹ Condominiums created before October 1, 1986 fall under the older Unit Ownership Act (Chapter 47A), although several Chapter 47C sections — including the lien section — apply to those older condominiums unless their declarations expressly say otherwise.² The two modern lien statutes, § 47C-3-116 and § 47F-3-116, use nearly identical language and operate the same way.³

The association lien does not arise automatically on the date an assessment becomes due. An assessment that remains unpaid for 30 days or longer becomes a lien only when the association files a claim of lien of record with the clerk of superior court in the county where the unit or lot is located.¹ North Carolina does not grant any portion of the association lien priority ahead of a first mortgage. The lien is prior to all liens and encumbrances except those recorded before the claim of lien is filed — specifically including a mortgage or deed of trust — and liens for real-estate taxes and other governmental charges.¹ An association may foreclose either by power of sale (nonjudicial) or by judicial action.¹ No statute sets a minimum dollar amount before foreclosure; the only durational triggers are 30 days unpaid to file the lien and 90 days unpaid to start a power-of-sale foreclosure.¹

That places North Carolina apart from super-priority-lien states such as Nevada, where NRS 116.3116(2)(b) gives the association lien priority over a first deed of trust to the extent of assessments due during the nine months immediately preceding the notice of default, and Connecticut, where Conn. Gen. Stat. § 47-258(b) likewise grants a nine-month priority portion.⁴ It also differs from threshold-restricted states such as California, where Cal. Civ. Code § 5720 bars foreclosure unless delinquent assessments reach $1,800 or are more than 12 months delinquent, and Arizona, where A.R.S. § 33-1807 bars foreclosure on planned-community lots unless the owner is delinquent 18 months or owes $10,000 or more.⁵ North Carolina protects owners through procedure instead: mailed pre-lien statements, a recorded board vote, a clerk hearing, and an upset-bid window. The sections below cover the lien, its priority, the collection and foreclosure sequence, and recent legislative and judicial activity.

North Carolina HOA Collections & Liens at a glance

Source: N.C.G.S. § 47C-3-116, § 47F-3-116, § 47A-22, § 45-21.27, § 47C/47F-3-102, § 47C/47F-3-115. Last verified: June 9, 2026.

The lien and its priority

Lien creation, authority, and what it secures

§ 47C-3-116 supplies the assessment lien for condominiums and § 47F-3-116 supplies it for planned communities. For condominiums created before October 1, 1986, § 47A-22 of the Unit Ownership Act provides a parallel lien, and Chapter 47C also extends its lien section to those older condominiums unless their declarations expressly say otherwise.^1,2 Under all three statutes, an assessment that remains unpaid for 30 days or longer becomes a lien on the unit or lot, but only when the association files a claim of lien of record with the clerk of superior court. The lien is a recording-triggered lien — it does not spring into existence automatically on the due date.¹

Before filing, the association must mail a statement of the amount due by first-class mail no fewer than 15 days before filing the lien, sent to the unit or lot address and to the owner's address of record and, if different, the address shown in county tax records.¹ The claim of lien itself must set forth the name and address of the association, the name of the record owner at the time of filing, a description of the unit or lot, and the amount claimed; it may also appoint a trustee to conduct a foreclosure. Its first page must carry a boldface, capital-letter warning that the document is a lien that may lead to foreclosure.¹ Once filed, the claim of lien secures all sums due through the date of filing and any sums due afterward.¹

The lien secures unpaid assessments and, unless the declaration provides otherwise, late charges, fees, fines, interest, and other charges that the statute treats as assessments.¹ Late charges may not exceed the greater of $20 per month or 10% of the unpaid installment.⁸ Interest on past-due assessments may not exceed 18% per year.⁹ Reasonable attorney fees and collection costs are recoverable, but the owner cannot be charged attorney fees until the association sends written notice of intent to seek them and gives the owner 15 days to pay the balance without those fees; in an uncontested matter, attorney fees and the trustee commission collectively may not exceed $1,200.¹ The lien attaches to the unit or lot, not to the owner's other property.¹

Lien priority and any super-priority component

The priority rule is unambiguous. Under § 47F-3-116(d) and § 47C-3-116(d), the claim of lien "is prior to all liens and encumbrances on a [lot/unit] except (i) liens and encumbrances, specifically including, but not limited to, a mortgage or deed of trust ... recorded before the filing of the claim of lien ... and (ii) liens for real estate taxes and other governmental assessments and charges." The same subsection states it "does not affect the priority of mechanics' or materialmen's liens."¹ The older Unit Ownership Act lien in § 47A-22 is similar: it is prior to all other liens except unpaid real-estate taxes and sums unpaid on deeds of trust and mortgages recorded before the lien was docketed.²

North Carolina does not recognize any super-priority or limited-priority portion ahead of a first mortgage. There is no six-month carve-out, no nine-month carve-out, and no rolling super-priority of any kind. Because the association lien is junior to a prior-recorded first deed of trust, a foreclosure by the association ordinarily does not wipe out the first mortgage, and a first-mortgage foreclosure extinguishes the association's claim against that owner. The statute confirms that a first-mortgage holder or other purchaser that takes title through foreclosure of a first mortgage is not liable for assessments that became due before it acquired title; those unpaid sums become common expenses spread across all owners.¹

CC&R interaction, corporate-law overlay, and federal overlay

Recorded declarations (CC&Rs) supplement the statutory lien and may broaden what counts as an assessment, since the statute defers to the declaration on whether fees, fines, and other charges are enforceable as assessments. The declaration cannot, however, manufacture a priority position the statute withholds. A lien for unpaid assessments is extinguished unless enforcement proceedings are instituted within three years after the claim of lien is filed.¹ The underlying assessment debt is a contract obligation generally subject to North Carolina's three-year limitations period for contracts. Because most North Carolina associations are nonprofit corporations, the Nonprofit Corporation Act (Chapter 55A) also governs board authority, records, and member rights.

Federal law operates on top of the North Carolina framework. The federal Fair Debt Collection Practices Act applies when third-party collectors or attorneys pursue assessments, and North Carolina courts have treated past-due assessments as debts subject to the state's debt-collection rules. A bankruptcy filing triggers the automatic stay under 11 U.S.C. § 362, halting collection and foreclosure until the stay is lifted or terminated. The Servicemembers Civil Relief Act adds protections — including limits on foreclosure — for owners in qualifying military service.

The collection and foreclosure process

Pre-lien collection sequence

Before recording a claim of lien, the association must make reasonable and diligent efforts to keep current owner-address records and must mail, by first-class mail, a statement of the amount due no fewer than 15 days before filing the lien.¹ The statement goes to the physical address of the unit or lot and to the owner's address of record and, if different, to the address shown in county tax records; if the owner is a corporation or limited liability company, it also goes to the registered agent.¹ A separate written notice is required before the association may add attorney fees and costs: that notice must state the outstanding balance, give the owner 15 days to pay without attorney fees, and inform the owner of the opportunity to contact a named representative to discuss a payment schedule.¹ The board may agree to an installment plan in its sole discretion, but neither the association nor the owner is required to offer or accept one.¹

Recording and the pre-foreclosure sequence

The claim of lien is filed with the clerk of superior court in the county where the property sits and must contain the contents described above, including the boldface foreclosure warning.¹ The person signing the claim of lien must attach a certificate of service attesting to attempted service on the record owner in accordance with Rule 4(j) of the Rules of Civil Procedure.¹ After filing the claim of lien and before commencing a nonjudicial foreclosure, the association must give the owner notice of its intention to commence a nonjudicial foreclosure, containing the information required by § 45-21.16(c)(5a).^1,6

Two board prerequisites apply to power-of-sale foreclosure. First, the assessment must remain unpaid for 90 days or more. Second, the association may not foreclose unless the executive board votes to commence the proceeding against the specific unit or lot — a per-property vote, not a blanket authorization.¹ North Carolina maintains a voluntary prelitigation mediation program under § 7A-38.3F for disputes arising under Chapter 47C, Chapter 47F, or an association's governing documents, but disputes related solely to the failure to pay an assessment — or to fines or fees associated with collecting an assessment — are expressly excluded from that program. Mediation is not a mandatory step before an assessment foreclosure.¹⁰

Foreclosure mechanics and thresholds

An association may foreclose either by power of sale in the manner of a deed of trust under Article 2A of Chapter 45 or by judicial action.¹ In a power-of-sale foreclosure, the association appoints a trustee, and the matter proceeds to a hearing before the clerk of superior court. If the clerk finds a valid debt, default, the right to foreclose, and proper notice to those entitled to it under § 45-21.16(b), the clerk authorizes the trustee to sell the property.^1,6 After the sale, the property remains subject to a 10-day upset-bid period under § 45-21.27, during which any person may file a higher bid that exceeds the prior bid by at least 5% or $750, whichever is greater; each upset bid restarts a new 10-day period, and only when no further upset bid is filed do the parties' rights become fixed.⁷

On thresholds: North Carolina sets no minimum dollar amount that must be owed before an assessment foreclosure, and it imposes no minimum delinquency beyond the 30-day period to file the lien and the 90-day period to begin power-of-sale foreclosure.¹ Reports that a $2,500-or-six-months threshold became effective in late 2025 describe House Bill 444, which did not pass.¹¹

Fines and certain fees cannot support a power-of-sale foreclosure. A claim of lien securing a debt consisting solely of fines, interest on unpaid fines, or attorney fees incurred solely in connection with fines may be enforced only by judicial foreclosure under Article 29A of Chapter 1. The same judicial-only limit applies to any lien securing only service, collection, consulting, or administration fees not expressly authorized in the declaration.¹ A power-of-sale assessment foreclosure that proceeds without contest typically runs a few months from board vote to confirmation, driven by the clerk's hearing calendar, the statutory notice periods, and the 10-day upset-bid window.

Post-sale: redemption, deficiency, surplus, reinstatement

North Carolina provides no separate post-sale statutory right of redemption for power-of-sale foreclosures. The functional equivalent is the 10-day upset-bid period: at any time before that period expires, the owner may satisfy the debt secured by the claim of lien and pay all enforcement expenses (advertising costs, attorney fees, and the trustee commission), and the trustee then dismisses the foreclosure and the association cancels the lien.^1,7 That same right lets an owner reinstate by paying the arrears before the sale becomes final.

For any deficiency, the statute does not authorize the association to reach a unit or lot owner's other assets through the power-of-sale proceeding itself; the association's route to a money judgment is a separate civil action or judicial foreclosure, and owners retain the deficiency defenses available to mortgagors under Chapter 45. Surplus proceeds from a sale are distributed in the statutory order under Chapter 45: sale costs and the trustee commission first, then unpaid taxes and special assessments, then the foreclosing lienholder's debt, with any remaining surplus going to junior lienholders in order of priority and finally to the former owner; contested or uncertain surpluses are deposited with the clerk of superior court for a special proceeding.¹²

Recent legislative and judicial activity

Recent Bills

Lawmakers considered broad changes to the Condominium and Planned Community Acts through HB 444, SB 378, and HB 372 during the 2025-2026 session, including foreclosure thresholds, mandatory mediation, fine caps, and Department of Justice complaint reporting. As of the most recent legislative record, none had been enacted.

Recent Court Rulings

North Carolina appellate courts are holding associations to their own procedures and to the detailed requirements of the foreclosure statutes. Three rulings — one on service defects, one on surplus-fund recovery, and one on the retroactive reach of Chapter 47C — define the current enforcement landscape.

National positioning

North Carolina sits in the middle of the national collections spectrum, but distinctly on the lender-protective side of the priority question. Unlike super-priority-lien states — where a portion of the association lien jumps ahead of the first mortgage (Nevada's nine-month carve-out under NRS 116.3116, which the Nevada Supreme Court in SFR Investments Pool 1 v. U.S. Bank, 334 P.3d 408 (2014), held grants true lien priority capable of eliminating a first deed of trust, is the common reference point; Connecticut grants a parallel nine-month priority portion under Conn. Gen. Stat. § 47-258) — North Carolina keeps the association lien junior to any prior-recorded mortgage.⁴ It is not a threshold-restricted state like California (foreclosure barred below $1,800 or 12 months delinquent under Cal. Civ. Code § 5720), Arizona (18 months or $10,000 for planned communities under A.R.S. § 33-1807), or Colorado (six months of assessments plus a recorded board vote under C.R.S. § 38-33.3-316), which bar foreclosure below a set dollar figure or delinquency period; North Carolina's only limits are the 30-day and 90-day timing triggers and the judicial-only rule for fines.⁵ Nor is it a CC&R-primary state with no statute: the lien and foreclosure mechanics are codified in detail. For a multi-state operator, the practical implication is concrete: collection sequences and foreclosure economics differ enough between states that a notice or lien valid in one state can be defective in another, and North Carolina's recording-triggered lien, board-vote prerequisite, and upset-bid window must be built into any compliant workflow. North Carolina's current direction of travel points toward tighter owner protections, with multiple 2025 reform bills proposing foreclosure thresholds and mandatory mediation, though none has yet become law.

Recommendations

• Treat the lien as recording-triggered: do not assert a lien or its priority date until the claim of lien is filed with the clerk of superior court, and only after the assessment has been unpaid 30 days and the 15-day pre-lien statement has been mailed.
• Never represent or rely on a super-priority position in North Carolina. If a workflow or notice template carries a "six-month super-priority" field, disable it for North Carolina; the lien is junior to prior-recorded mortgages.
• Build the board-vote prerequisite and the 90-day delinquency into any foreclosure trigger, and route fines-only debts to judicial foreclosure rather than power of sale.
• Treat strict Rule 4(j) service as a hard gate after Irish Creek; do not advance a power-of-sale foreclosure on unsigned or "contactless" certified-mail receipts.
• Benchmarks that would change this guidance: enactment of HB 444, SB 378, or HB 372 (or any successor) imposing a dollar/six-month foreclosure threshold, a mandatory payment-plan offer, or mandatory mediation would require immediate template and workflow changes.

Caveats

• Several secondary sources state that $2,500-or-six-months foreclosure limits "took effect December 1, 2025." That is inaccurate as of the legislative record reviewed; the language belongs to bills that have not been enacted.
• Bill status can change quickly; the legislative findings here reflect the record as verified on June 9, 2026.
• The underlying-debt limitations period is stated generally; statutory numbers for the lien-extinguishment period (three years from filing) are read directly from § 47C/47F-3-116(c).
• Comparative-state figures (Nevada, Connecticut, California, Arizona, Colorado) reflect those states' statutes as cited; Arizona's planned-community threshold was raised effective September 26, 2025, and condominiums there remain at the older one-year/$1,200 trigger.

1. N.C.G.S. § 47F-3-116, Lien for sums due the association; enforcement (North Carolina General Assembly) ↩
2. N.C.G.S. § 47A-22, Liens for unpaid common expenses; recordation; priorities; foreclosure (North Carolina General Assembly) ↩
3. N.C.G.S. § 47C-3-116, Lien for sums due the association; enforcement (North Carolina General Assembly) ↩
4. Nev. Rev. Stat. § 116.3116, Liens against units for assessments (nine-month priority); see SFR Investments Pool 1 v. U.S. Bank, 334 P.3d 408 (Nev. 2014) ↩
5. Cal. Civ. Code § 5720 ($1,800/12-month foreclosure threshold); Ariz. Rev. Stat. § 33-1807 (planned-community 18-month/$10,000 threshold); Colo. Rev. Stat. § 38-33.3-316 (six-month threshold and board vote) ↩
6. N.C.G.S. § 45-21.16, Notice and hearing (North Carolina General Assembly) ↩
7. N.C.G.S. § 45-21.27, Upset bid on real property; compliance bonds (North Carolina General Assembly) ↩
8. N.C.G.S. § 47F-3-102(11), Powers of owners' association — late charge cap (North Carolina General Assembly) ↩
9. N.C.G.S. § 47F-3-115(b), Assessments for common expenses — 18% interest cap (North Carolina General Assembly) ↩
10. N.C.G.S. § 7A-38.3F, Prelitigation mediation of condominium and homeowners association disputes (North Carolina General Assembly) ↩
11. House Bill 444 (2025-2026 Session), Homeowners Association Reform Bill — bill history (North Carolina General Assembly) ↩
12. Forest Ridge Townhomes Corporation of Greensboro v. HEAG Pain Management Center, No. COA25-600 (N.C. Ct. App. Mar. 18, 2026) (unpublished) ↩
13. Senate Bill 378 (2025-2026 Session), HOA Revisions — bill history (North Carolina General Assembly) ↩
14. In re Foreclosure of a Claim of Lien by Irish Creek Section 2 Owners' Association (Rogers), No. COA24-788 (N.C. Ct. App. Oct. 1, 2025) (published) ↩
15. In re Foreclosure of a Lien by Executive Office Park of Durham Association v. Rock, 382 N.C. 360, 879 S.E.2d 169 (N.C. 2022) ↩