North Carolina H.B. 444 (2025): Homeowners Association Reform Bill Is Not Law

Quick Answer

North Carolina House Bill 444 (2025), the "Homeowners Association Reform Bill," is not law. It was filed March 18, 2025 and its last recorded action on the legislature's bill page is "Re-ref Com On Judiciary 1" on May 6, 2025. It has not passed the House, and nothing in it binds any association today. This page describes the latest edition we read, Edition 3 (Committee Substitute #2 Favorable 5/6/25), which would change the Planned Community Act, the Condominium Act, prelitigation mediation and the Department of Justice's role.

At a Glance

What the Bill Says

This section describes the text of Edition 3 only. None of it is current law. The PDF text we read does not display strike-through marks, so where we describe a change from existing law we say so only where the edition's own wording shows it.

Declaration amendments (new G.S. 47F-2-117.1 and 47C-2-117.1A)

Amendments to a declaration "shall only affect lot owners whose lots are conveyed or transferred after the amendment takes effect." For an amendment made while an owner holds a lot, "the amendment has no effect until the lot is conveyed or transferred to another lot owner." An owner takes the lot "subject to existing rules in the declaration at the time of conveyance or transfer." The condominium version is parallel.

Management contracts and fines collected by managers (G.S. 47F-3-102(3), 47C-3-102(a)(3))

• A contract with a managing agent "shall not have a term exceeding one year" and no automatic renewal requiring notice of nonrenewal "more than 30 days prior to the contract's anniversary date."
• An automatically renewed contract would be terminable for any reason on 60 days' notice.
• A managing agent could not be paid based on fines collected and could not collect from the association or an owner "any fee in connection with its collection of a fine."
• These limits would apply to management contracts entered into on or after the effective date (Section 14).

Parking on public streets, tutoring and architectural decisions

• Absent express authority in the declaration, an association could not enforce parking restrictions on a personal vehicle on a public street maintained by the Department of Transportation or local government unless authority was delegated to it, for up to five years at a time. "Personal vehicle" is defined as an automobile under 26,001 pounds used for personal pleasure, travel or commuting, excluding motor homes and commercial-use vehicles.
• No fine could be levied for violating a provision restricting tutoring, educational, academic or swimming lessons given on the owner's lot or unit to a group of no more than five people at a time, whether or not paid.
• An association exercising authority to approve changes to a lot or unit would need a fair and expeditious written procedure, with a decision "within 90 days" after initial submission or after requested additional information, made in good faith and "not unreasonable, arbitrary, or capricious." A denial would need an explanation and a description of reconsideration by the executive board.
• Edition 3 also adds a subdivision on charging a reasonable fee for record copies, not to exceed actual photocopying cost, in the condominium powers section (47C-3-102(a)(12b)).

Budgets (G.S. 47F-3-103(c), (c1); 47C-3-103(c), (c1))

The edition's text of subsection (c) shows the existing ratification process: within 30 days after adopting a budget the board sends a summary, the ratification meeting is held 10 to 60 days after mailing, no quorum is required, and the budget is ratified unless a majority of all owners rejects it. A new subsection (c1) says that after ratification no board action may "increase the budgeted common expense liability for that fiscal year by more than five percent (5%) without the approval of a majority of all the lot owners or any larger vote specified in the declaration." This is the five percent figure in this edition; other editions may differ.

Fines hearings (G.S. 47F-3-107.1, 47C-3-107.1)

• Written notice of the hearing "not less than 10 days prior to the scheduled hearing date," stating the date, time, place and a general description of each alleged violation and any cure.
• A fine "not to exceed one hundred dollars ($100.00)" per day for each day more than five days after the decision, "up to a maximum fine of two thousand five hundred dollars ($2,500)."
• The structure of an adjudicatory panel and a 15-day appeal to the board appear in the edition's text.

Liens and foreclosure (G.S. 47F-3-116, 47C-3-116)

• A claim of lien for fines or fine-related charges would be filed separately from other liens and within 90 days after the fine is imposed; "fine-related charges" means fines, interest on fines and attorneys' fees related to fines. Such a lien would be extinguished unless enforcement proceedings start within one year of filing, while other assessment liens keep a three-year period.
• Pre-lien notice would add email delivery of the assessment statement where the owner designated an email address, and the association would need to keep a current email address of record.
• In fine-lien enforcement, attorneys' fees would be discretionary with the court, limited to the greater of $10,000 or 15 percent of the amount recovered, with findings.
• No attorneys' fees or costs until the owner receives written notice and 15 days to pay the balance without them.
• Foreclosure by power of sale: the edition text shows "90 180 days," which we read as replacing 90 with 180 days of delinquency. It would also require a board vote against the specific lot, a lien of at least the lesser of six months of assessments or $2,500, and an offer of an installment schedule that the owner declined or defaulted on.
• Foreclosure clerk hearing steps: inquiry whether the lot is a principal residence, and a mandatory continuance of up to 90 days where good cause shows a reasonable likelihood of resolving the delinquency.
• Liens consisting solely of fines, fine-related charges or fees could be enforced only by a civil action seeking a judgment, and an association could not charge a service, collection, consulting or administration fee unless the declaration expressly allows it.
• Sections 6 and 10 would take effect December 1, 2025 for liens filed on or after that date.

Records (G.S. 47F-3-118, 47C-3-118)

• Records reasonably available within 30 days of a written request if the bylaws do not set a shorter time; financial records older than three years need not be made available unless bylaws provide otherwise.
• An owner could inspect and copy management contracts on five business days' written notice, with a demand presumed made in good faith and a court-ordered fee award if the association refuses and loses.

Mandatory prelitigation mediation (G.S. 7A-38.3F)

New subsection (b1) says that before filing a civil action arising under Chapter 47C, Chapter 47F or an association's declaration, bylaws or rules, "a party shall initiate mediation." On motion before trial the action would be dismissed without prejudice unless certain exceptions apply, including good cause such as irreparable harm. The edition keeps the carve-out for disputes solely about assessments and related fines or fees (subsection (a1)). The mediation changes would take effect October 1, 2025 for actions filed on or after that date.

Department of Justice complaint tracking (new G.S. 114-8.8)

The Department would receive and record owner complaints against associations, publish a complaint form and information, forward complaints for response, and report each July 1 to legislative committees. The text bars the Department from issuing regulations on association governance and from serving "as an arbiter in disputes." Section 13 would be effective July 1, 2025.

What This Means in Practice

Today

Because the bill is not law, current statutes control. Associations should not change fine caps, foreclosure timing, management contracts or amendment practice based on this bill. Several effective dates written in the edition (July 1, 2025, October 1, 2025 and December 1, 2025) have already passed. Our reading: if the bill were revived, those dates would likely need to change, but that is a legislative matter and we cannot predict it.

Why it still matters

The bill shows the topics legislators have raised: amendments, management contracts, fines, foreclosure, records, mediation and oversight. Related bills are covered on our pages for H.B. 542 (2023) and S.B. 378 (2025). Boards may want to review their management contracts, fine schedules and records practices on their own merits.

Correcting a common mix-up

Some summaries group H.B. 444 with "HB 372." H.B. 372 is a separate, enacted law about home-based businesses; see S.L. 2026-51. It is not part of this reform bill.

Open questions

• Whether the bill can still move in the current 2025-2026 session is not something the bill page tells us; check the legislature's site.
• If it moved, it could change again. We read only Edition 3, and the filed version and Edition 1 and 2 contain different text.

Timeline

Related North Carolina Law

• S.B. 378 (2025): HOA revisions
• H.B. 542 (2023): HOA revisions
• G.S. 47F-3-107.1: fines and suspension hearing
• G.S. 47F-3-116: assessment liens and foreclosure
• G.S. 7A-38.3F: prelitigation mediation
• G.S. 47F-3-118: records
• North Carolina HOA laws complete guide

Board Checklist

• Treat H.B. 444 as proposed only. Follow current statutes and your governing documents.
• Check the bill page for any new action before telling owners anything about it.
• Review your management agreement for term, renewal and termination provisions.
• Review your fine and hearing procedures for clear notice and a written decision.
• Check that your records-request process works and is documented.
• Do not publish newsletters or website text calling these changes law.

Frequently Asked Questions

Is North Carolina House Bill 444 law?

No. Its last action shown on the General Assembly's bill page is a re-referral to the Judiciary 1 committee on May 6, 2025.

What would the bill do?

In Edition 3, among other things: limit management contracts to one year, restrict how declaration amendments apply, change fine, lien and foreclosure rules, require mediation before suit, and have the Department of Justice track complaints.

Would it cap fines at $2,500?

Edition 3 would add a maximum of $2,500 to the continuing daily fine of up to $100. We read only this edition, and it is not law.

Would it extend the time before foreclosure?

The edition's text shows a change from 90 to 180 days of delinquency, plus a board vote, a minimum lien amount and an installment offer. It is not law.

Is H.B. 372 part of this bill?

No. H.B. 372 became S.L. 2026-51 and concerns home-based businesses.

Could it still pass?

We cannot say. Check the bill page on the legislature's website for current status.

Where This Comes From

This page is based on the text of Edition 3 of House Bill 444 (H444v3, Committee Substitute #2 Favorable 5/6/25) and the bill's history page, both at ncleg.gov, read on October 26, 2026. We did not read the filed version or Editions 1 and 2 in full, and we did not read any fiscal note or committee debate.

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Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed North Carolina attorney before acting.