HOA Disputes in Wilmington, NC: Frequently Asked Questions

Understanding HOA Disputes in Wilmington

Homeowners associations (HOAs) can offer structure and shared services to a community. In Wilmington and across North Carolina, a lot of residents appreciate the well-maintained common areas, clear architectural guidelines, and community resources that an HOA can bring. Still, conflicts do arise when homeowners and board members disagree on the scope of responsibilities, the handling of funds, or the enforcement of certain rules.

Below are answers to frequently asked questions (FAQs) about HOA disputes in Wilmington. The goal is to provide straightforward information about common legal issues, potential resolutions, and how North Carolina law—including the North Carolina Planned Community Act—may apply. This information is for general educational purposes. If you have specific questions, give us a ring at the Law Office of Bradley Coxe:  910-834-8400.  We’re located at: 3907 Wrightsville Ave Suite 200, Wilmington, NC 28403. 

What causes HOA Disputes? 

One common reason for HOA disputes involves allegations of financial management. HOAs must budget for maintenance, reserve funds, and community improvements. If there is a suspicion that funds are misused—such as board members spending HOA money on personal expenses—that can lead to allegations of breach of fiduciary duty. Another source of conflict involves rule enforcement, such as pet policies or guidelines for architectural modifications. Homeowners might disagree with how strictly an HOA board applies these rules, especially if they believe the board is treating some residents differently.

Additionally, board action disagreements occur when a board’s decision about spending, fines, or community guidelines does not align with what homeowners believe is appropriate. Clients in Wilmington sometimes contact an attorney because they feel certain decisions do not benefit the community as a whole, or they suspect an infringement on homeowner rights. Have questions? We’re here to help.  

What Is a Breach of Fiduciary Duty in an HOA? 

Fiduciary duty means the board must act in the best interests of the community. In legal terms, it is the obligation to exercise good faith, care, and loyalty in handling HOA affairs, including financial decisions, rule enforcement, and overall governance. Under the North Carolina Planned Community Act, this duty obligates board members to make decisions that align with governing documents (like covenants and bylaws) and to avoid conflicts of interest.

When clients suspect misuse of funds, such as board members paying for lavish dinners or covering personal expenses with HOA money, they may claim the board breached its fiduciary duty. Proving this in court generally requires showing that:

• • The HOA board or specific members owed a fiduciary duty.

• • That duty was not met.

• • The breach caused harm or financial loss to the association or homeowners.

In Wilmington, a case might lead to injunctive relief (a court order directing the board to take or stop certain actions) or damages to compensate the HOA or homeowners for losses.

Can Homeowners Challenge an Architectural Request Denial?

Yes, in some circumstances challenging an ARC denial is possible.  Architectural guidelines exist so communities can maintain consistency in design, aesthetics, and property appearance. However, if a homeowner’s request fits within the official guidelines but is still denied, the homeowner may be able to challenge the denial. A board might provide reasons for refusal—such as concerns about structural changes or the style of modifications—but these reasons must align with published community standards.

When a homeowner feels the HOA board rejected a request arbitrarily or out of bias, they may:

• • File a formal appeal with the board, citing the relevant covenants or regulations.

• • Request alternative dispute resolution, like mediation, if the HOA bylaws permit it.

• • Seek legal advice on whether the denial conflicts with state law or the association’s governing documents.

Should the HOA’s denial run counter to clear guidelines, a homeowner may pursue litigation. Under North Carolina law, courts typically examine whether the HOA acted reasonably and in accordance with its own rules.

How Do Discrimination Claims Arise in HOA Communities?

Discrimination claims may involve issues under the Fair Housing Act (FHA) or the Americans with Disabilities Act (ADA). These federal laws prohibit discrimination based on factors such as race, color, religion, sex, disability, familial status, or national origin. In an HOA context, disputes might surface if:

• • A board fails to provide a reasonable accommodation for a homeowner with a disability, such as installing a ramp or allowing a service animal due to a “no pets” rule.

• • A homeowner believes the board is enforcing certain policies selectively, disproportionately affecting a protected group.

If a homeowner files a discrimination complaint, the board might need to show it followed established rules uniformly. A homeowner could also allege discrimination if a rule that appears neutral on its face is applied in a way that limits a protected group’s rights or access to amenities. This area can be complex, and homeowners or boards facing potential discrimination claims sometimes seek legal counsel to navigate the state and federal laws involved.

Can a Homeowner Demand to see HOA Records?

Yes. Under North Carolina law, homeowners have a right to certain records . N.C. Gen. Stat. §55A-16-01 provides for the records required for any North Carolina non-profit corporation, including most homeowner associations. In addition, N.C. Gen. Stat. §47F-3-118 specifically governs the records for HOAs in planned communities. Under these statutes, the HOA should maintain the following:

1. 1. The minutes should be of all meetings, both of the membership and the board of directors. The proper form of minutes should just be the actions taken by the group, not the discussion surrounding each vote or action. The past three years of the membership meetings should be kept in the principal office of the HOA and are subject to inspection on five days written notice by the homeowner. The remaining minutes are subject to inspection on five days written notice and where the homeowner’s request is made in good faith and for a proper purpose, are described with reasonable particularity, and the records requested are directly connected with the proper purpose.

1. 1. Actions without a Meeting. Records of the past three years of the actions taken without a meeting should be kept in the principal office of the HOA and are subject to inspection on five days written notice by the homeowner. The remaining actions without a meeting are subject to inspection on five days written notice and where the homeowner’s request is made in good faith and for a proper purpose, are described with reasonable particularity, and the records requested are directly connected with the proper purpose.

1. 1. Committee Actions. A record of all actions taken by a committee that where that committee is operating as the decision maker in place of the board of directors (not where it is merely advisory). The past three years of the committee meeting records should be kept in the principal office of the HOA and are subject to inspection on five days written notice by the homeowner. The remaining committee records are subject to inspection on five days written notice and where the homeowner’s request is made in good faith and for a proper purpose, are described with reasonable particularity, and the records requested are directly connected with the proper purpose.

1. 1. Appropriate Accounting Records. These are subject to on five days written notice and where the homeowner’s request is made in good faith and for a proper purpose, are described with reasonable particularity, and the records requested are directly connected with the proper purpose. These records should include (if not stated otherwise in the bylaws) cash receipts and expenditures and all assets and liabilities.

1. 1. Income and Expense Statement and Balance Sheets. These should be made available to all lot owners within 75 days after the close of the fiscal year.

1. 1. Membership List. The HOA should maintain a record of all members including names and addresses in alphabetical order and the number of votes each member is entitled to cast. The list is subject to inspection by any member on five days written notice and where the homeowner’s request is made in good faith and for a proper purpose, are described with reasonable particularity, and the records requested are directly connected with the proper purpose. The membership list cannot be used to solicit money or property, any commercial purpose, or sold to or purchased by any person. It is specifically allowable to use the membership list to solicit votes of the members for an election.

1. 1. Unpaid Assessments. The HOA should maintain the amount of unpaid assessments and other charges against the lots in the planned community. Any lot owner may obtain a record of these charges against his lot with 10 days written notice. The lot owner has no right to the information on who other delinquent owners may be and their amount of unpaid assessments.

1. 1. Articles of Incorporation of the HOA. These should be kept at the principal office of the HOA and are subject to inspection with 5 days written notice from the homeowner.

1. 1. Bylaws of the HOA. These should be kept at the principal office of the HOA and are subject to inspection with 5 days written notice from the homeowner.

1. 1. Resolutions regarding Directors. Ch. 55A requires the retention of resolutions relating to the number or classification of directors or the characteristics of members. Since these types of rules for an HOA are contained in its bylaws and declarations, this provision normally would not apply for a planned community.

1. 1. Director List. A list of names and contact information for the current directors and officers should be maintained. These should be kept at the principal office of the HOA and are subject to inspection with 5 days written notice from the homeowner.

In addition to the statutes, the HOAs bylaws may require additional records be kept and available to homeowners, such as an annual audit. Finally, if any issue with the HOA results in the filing of a civil complaint, the North Carolina Rules of Civil Procedure would allow additional document production within the confines of the lawsuit.

Who Is Responsible for Maintaining Common Areas?

An HOA typically handles common area maintenance and repairs, including landscaping, recreational facilities, community buildings, and parking lots. The HOA’s governing documents (bylaws and covenants) usually outline which portions of the property the association is expected to maintain. In Wilmington, communities may include beach or coastal amenities, community pools, or shared docks, adding unique upkeep requirements.

When an HOA fails to maintain common elements—causing safety risks or property damage—homeowners may file a claim asserting the HOA did not fulfill its obligations. For instance, if a set of stairs remains in disrepair, and a resident or visitor trips and suffers an injury, the HOA might face a negligence claim. The North Carolina Planned Community Act can guide courts on whether the HOA took reasonable steps to mitigate hazards or allocate funds for timely repairs.

Can You Sue an HOA for Personal Injury on Common Property?

Yes, it is possible to pursue a personal injury claim against an HOA if negligence contributed to someone’s injury. In legal terms, negligence means the HOA did not exercise ordinary care in maintaining the premises. This might include ignoring repeated reports of a hazard, failing to fix dangerous conditions, or not implementing safety measures.

To establish negligence, clients generally need to show:

1. 1. Duty: The HOA had a duty to maintain the area in question.

1. 1. Breach: The HOA breached that duty by not addressing or fixing the hazard.

1. 1. Causation: The breach directly caused the injury.

1. 1. Damages: The injured party suffered quantifiable harm (medical expenses, lost wages, etc.).

Sometimes, the HOA’s insurance coverage may cover the claim. Even so, injured parties sometimes find it helpful to have legal representation if serious injuries or complicated liability issues are involved.

What Happens When a Homeowner Disagrees with Board Actions?

Board actions can involve new assessments, fee increases, or community-wide policy changes. Disagreements might result if a homeowner believes the board’s decision benefits only select members, goes against the association’s bylaws, or unnecessarily raises dues. Some ways to address these disagreements include:

• • Direct Dialogue: Attending board meetings and voicing concerns.

• • Petitioning: Gathering support from other homeowners to request a special meeting or propose bylaw amendments.

• • Mediation: Attempting to resolve conflicts with a neutral third party if permitted under the HOA’s procedures.

• • Legal Action: Pursuing a lawsuit for breach of fiduciary duty or seeking injunctive relief to halt or reverse the contested board action.

In Wilmington, some HOAs voluntarily implement dispute resolution processes before matters escalate to court. Reviewing the association’s governing documents can clarify what steps are available.

Are Pet Disputes Common in Homeowners Associations?

Yes. Even though pet-related rules can seem straightforward, conflicts occur over pet limits, breed restrictions, or noise complaints. A homeowner might sue if they feel the HOA applied rules inconsistently or refused to allow a service animal or emotional support animal as might be required by law. Conversely, an HOA may enforce restrictions if pets pose a nuisance or create safety concerns.

Common questions about pet disputes include:

• • “Can the HOA ban certain dog breeds?”

• • “Is there a three-pet limit?”

• • “Can I keep an emotional support animal even if the HOA has a no-pet policy?”

Homeowners uncertain about how these restrictions apply can review their bylaws and covenants and consult a legal professional to see if state or federal laws protect their situation.

What About Violation Notices and Fines?

When a homeowner violates community guidelines—whether related to yard maintenance, noise, parking, or something else—an HOA may issue a formal notice and can, in some circumstances, impose fines. The governing documents of the HOA may provide for a procedure that has to be followed before imposing fines. Regardless, North Carolina law requires a homeowner have the right to be heard before the Board and cannot be fined more than $100/day for any violation. If the Board issues fines for violations after the hearing, , some homeowners escalate the matter to court, if board improperly enforced a covenant or other rule of the HOA. In North Carolina, udges look at whether the HOA followed due process under its own governing documents  and state law.

Where to Go from Here

HOA disputes range from minor misunderstandings to full-scale litigation. While each situation is unique, knowing the basics of how HOAs function in North Carolina—and where board powers begin and end—can help homeowners navigate conflicts. When questions arise about misused funds, discrimination, pet rules, or architectural changes, it’s smart to understand your rights under the North Carolina Planned Community Act and the association’s own governing documents.

For more information or guidance, please reach out to our team at 910-834-8400, visit us at 3907-200 Wrightsville Ave, Wilmington, North Carolina 28403, or send an email to [email protected]. It would be an honor to provide clarity on the most appropriate path forward, whether it involves dialogue with the HOA, mediation, or court action. Our team is here to help clients explore options and address disputes in a way that fits the particular needs of your community.