Senate committee substitute to the 2nd edition makes the following changes.

Sections 1 and 5.

Changes certain powers of the unit owners’ association (Association) under the NC Condominium Act (GS 47C-3-102) or a homeowners’ association (HOA) under the NC Planned Community Act (GS 47F-3-102) as follows. Specifies that an Association/HOA cannot compensate a managing agent based in whole or in part on the amount of fines collected on behalf of the Association/HOA. Prohibits any such contracts from containing an automatic renewal provision or exceeding one year in duration. Applies to contracts between an Association/HOA and a managing agent entered into on or after the date the act becomes law.

Prevents an Association/HOA from enforcing any restriction on parking on a public street or public road for which the NC Department of Transportation or local government has assumed responsibility for maintenance and repairs. Prevents an Association/HOA from levying a fine for a violation of a provision restricting or prohibiting tutoring, educational lessons, academic lessons, music lessons, or swimming lessons provided in the owner's unit to a group of no more than five people at any one time, regardless of whether compensation is received for such lessons. Permits an Association/HOA to impose a reasonable charge for providing copies of records requested by a member, not to exceed the actual cost of photocopying the records.

Prevents an Association/HOA from imposing a charge for administrative tasks required upon the transfer of title to a unit, except as authorized by GS 47C-3-102(12a) (Associations) or GS 47F-3-102(13a) (HOAs). Specifies that a violation of this provision is an unfair and deceptive trade practice under State law.

Sections 2 and 6.

Specifies that all fines collected by either an Association under GS 47C-3-107.1 or an HOA under GS 47F-3-107.1 as part of a proceeding for fines and suspension of planned community privileges or services must be remitted to the Civil Penalty and Forfeiture Fund (Fund).

Sections 3 and 7.

Amends GS 47C-3-116 (pertaining to liens imposed for sums due to Associations) and GS 47F-3-116 (pertaining to liens imposed due to HOAs in planned communities) as follows.

Removes requirement that the delinquent assessment be at least $2,500 or one year of Association/HOA assessments, whichever is less, that remains unpaid for a period of 30 days or longer to constitute a lien on the unit/lot when a claim of lien is filed. Now specifies lien-filing deadline of 30 days after the fine was imposed for debts consisting solely of fines imposed by the Association/HOA interest on unpaid fines, or attorneys' fees incurred by the Association/HOA solely associated with fines imposed by the Association/HOA.

Clarifies that if an Association/HOA is going to provide notice of a delinquent assessment to the unit/lot owner by phone or email, it can only do so if the owner has designated an email address or telephone number with the Association/HOA.

Specifies that a lien for a debt consisting solely of fines imposed by the Association/HOA, interest on unpaid fines, or attorneys' fees incurred by the Association/HOA solely associated with fines imposed by the Association/HOA is extinguished unless proceedings to enforce the lien are instituted within 180 days after the filing of the claim of lien in the office of the clerk of superior court. Further specifies in any such action to enforce any such liens, any award of attorneys’ fees cannot exceed 15% of the amount recovered.

Deletes authority to Associations/HOAs to foreclose a claim of lien in like manner as a mortgage or deed of trust on real estate under power of sale if the assessment remains unpaid for 90 days or more along with accompanying procedural requirements for those foreclosure proceedings. Instead, Associations/HOAs may, through their executive boards, enforce a claim of lien by judicial foreclosure under GS Chapter 1, Article 29A, so long as the following four requirements are met: (1) the amount of the unpaid assessments exceeds $2,500 or twelve months of assessments, whichever is less; (2) the debt secured by the claim of lien does not consist solely of fines imposed by the Association/HOA, interest on unpaid fines, or attorneys' fees incurred by Association/HOA; (3) the assessment remains unpaid for at least 90 days; and (4) the Association/HOA’s executive board votes to commence the proceeding against the specific lot.

Requires the unit owners’/homeowners’ association to provide proper notice of delinquent assessment to the unit/lot owner before filing a claim of lien. Sets forth rules related to notice and makes conforming changes to the owner's contact information that must be given to the association.

Makes conforming changes.

Amends the required language for a claim of lien asserted by an Association under GS 47C-3-116(c) so that it reads, “This document constitutes a lien against your property, and if the lien is not paid, the Association may proceed with judicial foreclosure (was, foreclosure) against your property (was, against your property in like manner as a mortgage under NC law)."

Sections 4 and 8.

Amends GS 47C-3-118 (Association records) and GS 47F-3-118 (HOA records) authorizing a property owner or their authorized agent to inspect and copy, at a reasonable time and location specified by the Association/HOA, any contract entered into authorizing a managing agent to exercise any of the powers granted to the Association/HOA under GS 47F/C-3-102 if the owner gives the Association/HOA written notice of the demand at least five business days prior to the date on which the owner wishes to inspect and copy.

Section 9.

Amends GS 115C-457.1 (creation and administration of the Civil Penalty and Forfeiture Fund) to authorize the General Assembly to authorize the placement of additional funds from other sources into the Fund. Amends GS 115C-457.2 (remittance of monies into the Fund) to direct that any additional funds that the General Assembly authorizes to be placed in the Fund must be remitted to the Office of State Budget and Management by the entity having custody of the funds within 10 days after the close of the calendar month in which the funds were received or collected.

Section 10.

Amends exceptions to the formatting requirements set forth in GS 161-14(b) (registration of instruments) to also exclude certified copies of a court-filed document presented for registration on paper (was, just instruments listed under GS 25-9-521 [uniform form of written financing statement and amendment]). Effective December 1, 2023.

Section 11

Amends GS 45-21.4 (places of sale of real property) to increase the number of places where sale of real property may occur when either (1) the mortgage or deed of trust with power of sale of real property confers the mortgagee or trustee the right to designate the place of sale or (2) the mortgage or deed of trust with power of sale of real property does not designate, or confer upon the mortgagee or trustee the right to designate, the place of sale, or when it designates as the place of sale some county in which no part of the property is situated, to include another public location within the county (or counties) where the land (or any part thereof, if the land is in more than one county) is situated as designated by the mortgagee or trustee if the deed of trust/mortgage confers them with the right of sale or as designated by the clerk of the superior court where the land (or any part thereof) is located.

Amends GS 45-21.23 (time of sale of real property) to increase the time when a sale must begin from no later than one hour after the designated start time in the notice of sale to three hours after that start time.  

Enacts new GS 45-21.25A authorizing remote bids for sale of real property, as follows. Authorizing the person exercising the power of sale of real property or their agent to accept remote bids from persons not physically present at the place of sale, as designated pursuant to GS 45-21.4. Requires that all bids accepted at the sale must be clearly announced to all participating bidders, whether physically present or not. Directs the person exercising the power of the sale or their agent to collect all funds required to be by the winning bidder prior to accepting a remote bid. Prohibits the person exercising the power of sale of real property or their agent from assessing any charges to the mortgagor incurred in connecting with remote bidding. Further specifies that such charges are not recoverable as costs and expenses of the foreclosure. 

Makes Section 11 effective October 1, 2023, and applicable to notices of foreclosure sale filed with the clerk of superior court on or after that date.

Makes organizational changes and conforming changes to the act’s effective date. Makes conforming changes to the act’s titles.