Quick Answer
G.S. 47F-3-111 is the Planned Community Act's short tort and contract liability section. It says neither the association nor any lot owner other than the declarant is liable for the declarant's torts in connection with any part of the community the declarant is responsible to maintain, and that a lawsuit over a wrong done by the association is brought against the association, not against a lot owner.
The one thing a board or owner most needs to know: subsection (c) pauses the clock on the association's own claims during declarant control, so an association with a turnover-era problem should have counsel check timing early rather than assume a limitation period has run.
At a Glance
| Item | Detail |
|---|---|
| Law/citation | G.S. 47F-3-111, "Tort and contract liability" |
| History | S.L. 1998-199, s. 1 (no later amendment listed) |
| Applies to | Planned communities (HOAs) created on or after January 1, 1999. Our reading: the section is not on the pre-1999 list in G.S. 47F-1-102(c), so it does not reach older communities by force of the statute |
| Key sections | Subsections (a), (b) and (c) |
| Remedy or penalty | None stated. The section allocates who may be sued and tolls limitation periods |
What the Law Says
- (a) Declarant torts: "Neither the association nor any lot owner except the declarant is liable for that declarant's torts in connection with any part of the planned community which that declarant has the responsibility to maintain."
- (b) Who is sued: "An action alleging a wrong done by the association shall be brought against the association and not against a lot owner."
- (c) Tolling and standing: "Any statute of limitation affecting the association's right of action under this section is tolled until the period of declarant control terminates. A lot owner is not precluded from bringing an action contemplated by this section because the person is a lot owner or a member of the association."
That is the whole section. It has no definitions of its own. Terms such as "declarant" and "period of declarant control" come from G.S. 47F-1-103 and G.S. 47F-3-103(d).
What This Means in Practice
For boards
Subsection (b) keeps a claim over the association's conduct from landing on an individual owner. It does not say anything about directors or officers, so whether an individual board member can be named in a suit is outside this section (open question; confirm with counsel and see the board's insurance).
Subsection (a) matters at turnover. If a declarant built or was responsible for maintaining a part of the community and someone is hurt there, the association and the other lot owners are not the ones liable for the declarant's torts under this section.
For owners
An owner can bring an action "contemplated by this section" even though the owner is also a member of the defendant association. Being a member is not a bar. If you are suing over an association's wrong, the statute points the suit at the association itself.
What the law does not say
- It does not make the declarant reimburse the association for losses. The condominium counterpart, G.S. 47C-3-111(c) and (d), does: it makes a declarant liable to the association for uninsured tort losses and for contract losses the association would not have had but for a breach, if the declarant gets reasonable notice and a chance to defend, and adds litigation expenses and attorneys' fees. The 47F text we read has no such subsection. Our reading: a planned community seeking that kind of recovery must rely on other law or the declaration.
- It does not define "tort," set damages or create insurance duties. Insurance is addressed in G.S. 47F-3-113.
- It does not say which claims count as "under this section" for the tolling rule in (c). Our reading is that the tolling covers the association's claims tied to the section's subject matter, but this is an open question for counsel.
- It does not apply by its own terms to pre-1999 communities (our reading, from the list in G.S. 47F-1-102(c)).
Timeline
| Date | Event |
|---|---|
| January 1, 1999 | Planned Community Act effective (S.L. 1998-199); section enacted in that act |
Related North Carolina Law
- G.S. 47F-3-113: association insurance
- G.S. 47F-3-103: board, declarant control and budget ratification
- G.S. 47F-3-104: transfer of special declarant rights
- G.S. 47F-3-105: terminating declarant contracts and leases
- G.S. 47F-1-102: applicability and pre-1999 communities
- Chapter 47C Condominium Act overview
- North Carolina HOA laws complete guide
Board Checklist
- Identify whether the community is in its period of declarant control or has turned over.
- Ask counsel to confirm the timing on any claim that arose during declarant control, given the tolling language.
- Confirm general liability and director coverage under G.S. 47F-3-113 and the policy terms.
- Direct any claim over the association's conduct to the association, and keep owner complaints in writing.
- Keep turnover records on who maintained which common areas and when.
- For a condominium, review G.S. 47C-3-111 separately, because its declarant-liability rules are different.
Frequently Asked Questions
Can an owner be sued personally for something the HOA did?
Under G.S. 47F-3-111(b), an action alleging a wrong done by the association "shall be brought against the association and not against a lot owner."
Is an owner responsible for the declarant's negligence?
The statute says neither the association nor any lot owner except the declarant is liable for the declarant's torts connected with parts of the community the declarant is responsible to maintain.
Can a lot owner sue the association?
Yes. The section says a lot owner is not precluded from bringing an action contemplated by it because the person is a lot owner or association member.
What does the tolling rule do?
It suspends any statute of limitation affecting the association's right of action under the section until the period of declarant control ends.
Does the declarant have to pay the HOA's losses?
Not under the 47F text we read. The condominium statute has an express declarant-liability provision, but G.S. 47F-3-111 does not.
Does this section apply to older communities?
Our reading is no. It is not on the list of sections in G.S. 47F-1-102(c) that apply to communities created before January 1, 1999. Confirm with counsel.
Where We Stand
Our position: we support this law. It keeps ordinary owners from being named personally for the association's acts or for a developer's torts, which makes volunteer service and homeownership less risky and keeps claims aimed at the entity that carries insurance. Tip: review your liability coverage at each renewal and keep dated turnover records, since limitation periods in a developer-era dispute are a question for counsel, not for the board to guess. This is Association Property Managers' operating view as a management company, separate from the legal summary above, and it is not legal advice.
Where This Comes From
This page is based on the full text of G.S. 47F-3-111 and G.S. 47C-3-111, and on G.S. 47F-1-102(c), all read on the North Carolina General Assembly site (Chapter 47F on ncleg.gov). We did not read court decisions applying the section.
How APM Helps
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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.
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