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In one of the articles of the by-laws of my HOA there is the…

In one of the articles...
In one of the articles of the by-laws of my HOA there is the following:
"The Lessee shall be bound in all respects by the provisions contained therein. Any default by a lessee of such provisions which is not cured within 10 days' written notice from the Board to the owner and the lessee, shall entitle the association to terminate the lease, and the lot owner hereby irrevocably appoints the association as its attorney-in-fact (which appointment is coupled with interest) to take all actions necessary to terminate the lease ...."
My question is, will the court accept the declaration of covenants as an attorney in fact document, and accept the HOA as part to the lease contract, which it was not party to in the first place?
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Answered in 14 minutes by:
8/25/2017
Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 8,905
Experience: 30 years of experience in General Practice, Real Estate Law and Estate Law.
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Because there is an association the Covenants, Conditions and Restrictions (CC&R's) are record in the county where the HOA is situated. Therefore, these HOA governing documents run with the land and would apply to any tenant. The Tenant should have been advised that there was an HOA. If that was not disclosed that is an issue between the landlord and the tenant.

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Customer reply replied 10 months ago
Well these are just proposals as of now. But I find it absurd that the court will take the HOA's word that there was a default, and that it was properly served, and that it was uncured in time, and that they are the attorneys-in-fact, all in one swoop without a shred of evidence.

HOA's are a nightmare. Based on the recorded documents that run with the land they have a great deal of power. That being said, if there is a valid defense a Judge would certainly take that into consideration.

What is happening?

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Customer reply replied 10 months ago
A catastrophe. They came up with pages upon pages of revisions, and if they pass the owners will have almost no control over their properties, and can foreclosed upon, and it is all at the soul discretion of the Board, and all their decisions are final. It is a chapter from Orwell, mixed with some Aldous Huxley.

The HOA Board needs to remember that they have a fiduciary duty to the owners which means they MUST act in the best interests of the owners. If they are not the owners have the option of removing them and /or suing them.

What do your governing documents set out as the requirements for the amendment (revision) process?

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Customer reply replied 10 months ago
Is there something I can do to circumvent this?
I am leasing my house, and I need to keep leasing it. They are imposing an artificial 10% cap also, at their discretion.
Could I sign a long term lease with somebody I trust, with the right to sublease?
Customer reply replied 10 months ago
67% of the vote. But the voting process is not defined. Usually the management company, count the votes and that is it. The management company is in their pocket and they have no scruples.

Yes, you can ask them for a variance. You base this on the fact that your purchase of your property was to have a solid investment. Unless the governing documents state otherwise you could set up a long term lease.

Is there anything in the documents requiring board approval for tenants?

Amending HOA governing laws http://www.wardandsmith.com/articles/residential-planned-communities-and-condominiums-changing-restrictive-covenants

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You can report the management company to the State. Give me a moment to provide some information for you.

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Customer reply replied 10 months ago
Not as of yet. But the proposed revisions, do. They will require 3 weeks notice, a copy of the contract, and they reserve the right to change the terms, they want to be able to run a background check on the prospective tenant, and reserve the right to decline his candidacy. There does not seem to be a requirement that they explain the decline. As you say, it is a nightmare.
Customer reply replied 10 months ago
But I have no evidence. They destroy the ballots after counting them.

"§ 47F-2-117. Amendment of declaration.

(a) Except in cases of amendments that may be executed by a declarant under the terms of the declaration or by certain lot owners under G.S. 47F-2-118(b), the declaration may be amended only by affirmative vote or written agreement signed by lot owners of lots to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies or by the declarant if necessary for the exercise of any development right. The declaration may specify a smaller number only if all of the lots are restricted exclusively to nonresidential use.

(b) No action to challenge the validity of an amendment adopted pursuant to this section may be brought more than one year after the amendment is recorded.

(c) Every amendment to the declaration shall be recorded in every county in which any portion of the planned community is located and is effective only upon recordation.

(d) Any amendment passed pursuant to the provisions of this section or the procedures provided for in the declaration are presumed valid and enforceable.

(e) Amendments to the declaration required by this Chapter to be recorded by the association shall be prepared, executed, recorded, and certified in accordance with G.S. 47-41. (1998-199, s. 1; 2012-18, s. 1.8; 2013-34, s. 5.)

§ 47F-2-118. Termination of planned community.

(a) Except in the case of taking of all the lots by eminent domain (G.S. 47F-1-107), a planned community may be terminated only by agreement of lot owners of lots to which at least eighty percent (80%) of the votes in the association are allocated, or any larger percentage the declaration specifies. The declaration may specify a smaller percentage only if all of the lots in the planned community are restricted exclusively to nonresidential uses.

(b) An agreement to terminate shall be evidenced by the execution of a termination agreement, or ratifications thereof, in the same manner as a deed, by the requisite number of lot owners. The termination agreement shall specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications thereof shall be recorded in every county in which a portion of the planned community is situated and is effective only upon recordation.

(c) A termination agreement may provide for sale of the common elements, but may not require that the lots be sold following termination, unless the declaration as originally recorded provided otherwise or unless all the lot owners consent to the sale. If, pursuant to the agreement, any real estate in the planned community is to be sold following termination, the termination agreement shall set forth the minimum terms of the sale.

(d) The association, on behalf of the lot owners, may contract for the sale of real estate in the planned community, but the contract is not binding until approved pursuant to subsections (a) and (b) of this section. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale shall be distributed to lot owners and lienholders as their interests may appear, as provided in the termination agreement.

(e) If the real estate constituting the planned community is not to be sold following termination, title to the common elements vests in the lot owners upon termination as tenants in common in proportion to their respective interests as provided in the termination agreement.

(f) Following termination of the planned community, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for lot owners and holders of liens on the lots as their interests may appear. All other creditors of the association are to be treated as if they had perfected liens on the common elements immediately before termination.

(g) If the termination agreement does not provide for the distribution of sales proceeds pursuant to subsection (d) of this section or the vesting of title pursuant to subsection (e) of this section, sales proceeds shall be distributed and title shall vest in accordance with each lot owner's allocated share of common expense liability.

(h) Except as provided in subsection (i) of this section, foreclosure or enforcement of a lien or encumbrance against the common elements does not of itself terminate the planned community, and foreclosure or enforcement of a lien or encumbrance against a portion of the common elements other than withdrawable real estate does not withdraw that portion from the planned community. Foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not of itself withdraw that real estate from the planned community, but the person taking title thereto has the right to require from the association, upon request, an amendment excluding the real estate from the planned community.

(i) If a lien or encumbrance against a portion of the real estate comprising the planned community has priority over the declaration and the lien or encumbrance has not been partially released, the parties foreclosing the lien or encumbrance may, upon foreclosure, record an instrument excluding the real estate subject to that lien or encumbrance from the planned community. (1998-199, s. 1.)

§ 47F-2-119. Reserved for future codification purposes." http://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByChapter/Chapter_47F.html

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Customer reply replied 10 months ago
Is there any way I can ask for the vote counting process to be observed by neutral third parties?

You can certainly request poof of the vote. Let me set out the procedures for the vote.

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Customer reply replied 10 months ago
O.K.
It says 76% of the signatures, does the vote counting count as equivalent to signature?
Customer reply replied 10 months ago
It is usually difficult to find a lawyer who is willing to take on an HOA. Do you know anybody good who would be willing to take them on?
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Pursuant to the terms of service of the site I am not permitted to provide a personal referral to you. I can provide sources for finding reputable Attorneys. The State Bar Association is one resource at https://www.ncbar.org/members/lawyer-referral-service/

The other is Martindale http://research.lawyers.com/martindale-hubbell-peer-review-ratings.html

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Please do not hesitate to ask me any additional questions that you may have with regard to this matter. It would be my pleasure to continue to assist you.

If you would be kind enough to rate my service positively so I will receive credit for my work from the site I would appreciate it.

You may not be familiar with how the site works. The Attorneys to not receive credit from the site for their time or with customers unless the customer provides a positive rating. We answer your questions in good faith, hoping for a good faith response regardless of whether the law is in your favor or not. If you were unhappy with my service please let me know that you would prefer to work with another Attorney and I will opt out.

Thank you for your consideration.

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Customer reply replied 10 months ago
I was not unhappy.
But would you clarify the answer to one of my questions.
The one involving a long term lease with subletting.
At the moment there is absolutely no control on leases.
The process of the revisions has just stated, we have two meetings scheduled for Monday and Tuesday.
I do not think anything will pass before late October.
So can I in the mean time do such a long term contract, and will it stand a court test.
Customer reply replied 10 months ago
After the revisions are passed.

I don't see any reason why you could not do a long term contract, if there is nothing in the governing documents that prohibits the long term.

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Customer reply replied 10 months ago
the Board cannot void it using retroactively?

A lease is a contract that would be unreasonable for the board to interfere with a legal contract and they could be sued.

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Customer reply replied 10 months ago
O.K thank you.
I'll be sure to give the best rating.

Thank you.

Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 8,905
Experience: 30 years of experience in General Practice, Real Estate Law and Estate Law.
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Thank you very much.

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Customer reply replied 10 months ago
The HOA wants to run a criminal Background check on all prospective lessors.
My question: Does an ex-convict lose the right to rent or buy properties, after serving his sentence, or his parole period?
Can you discriminate against such an individual?

They can run a criminal background check. People with criminal records are not a protected class of people.

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"People with criminal records aren't a protected class under the Fair Housing Act, and the guidance from HUD's general counsel says that in some cases, turning down an individual tenant because of his or her record can be legally justified" http://www.npr.org/sections/thetwo-way/2016/04/04/472878724/denying-housing-over-criminal-record-may-be-discrimination-feds-say

This is slowly heading toward changing. The rejection of a tenant needs to be reasonable.

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Customer reply replied 10 months ago
Thank you
Ask Your Own Real Estate Law Question
Customer reply replied 10 months ago
thank you

My pleasure.

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