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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 116708
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Can a homeowner's/landowner's association make capital

Customer Question

Can a homeowner's/landowner's association make capital expenditures, ($55,000) to acquire a parcel of land behind closed doors and not make this known to the association members either by notice or vote to spend this kind of money? An association in NC did this and tried to keep it secret only announcing they did after the fact.
Thank you.
Ann K.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
What do the bylaws say about the power of the HOA board, since this is not something covered by the HOA Act in NC?
Customer: replied 1 year ago.
I'll have to search and let you know
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Under NC law, the bylaws and Covenants of the association are the governing documents, laws so to speak, for the organization. If the board violated the bylaws, in this case they can be sued for acting "ultra vires" or outside of the scope of their authority and the board can be held personally liable for the debt and damage to the HOA. So, if they acted outside their powers in the bylaws, you will need an attorney because the board has to be sued in a derivative action (by members on behalf of the association) for acting outside of the scope of their powers and this cannot be done by a pro se litigant, the members need to be represented by an attorney.

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