Quick Answer
G.S. 47F-3-112 says a planned community association can convey common elements or put a security interest on them only with the written agreement of owners holding at least 80 percent of the votes (or a larger percentage in the declaration). Limited common elements also need every owner they are allocated to. A transfer made any other way is void.
At a Glance
| Item | Detail |
|---|---|
| Law/citation | G.S. 47F-3-112, "Conveyance or encumbrance of common elements" |
| History | S.L. 1998-199, s. 1 (no later amendment listed) |
| Applies to | HOAs created on or after January 1, 1999. It is not on the G.S. 47F-1-102(c) list for older communities. |
| Key sections | (a) vote and written agreement, (b) contracts, (c) void transfers, (d) access and support |
| Remedy or penalty | A purported transfer not made under the section "is void" |
What the Law Says
- (a) Vote. Portions of the common elements "may be conveyed or subjected to a security interest" if owners with "at least eighty percent (80%) of the votes in the association, or any larger percentage the declaration specifies, agree in writing." The declaration may set a smaller percentage only if all lots are restricted exclusively to nonresidential use.
- Limited common elements (a). To convey a limited common element or encumber it, "all the owners of lots to which any limited common element is allocated shall agree." Sale proceeds of a limited common element are distributed as agreed between those owners and the association. Proceeds of other common elements are an asset of the association.
- (b) Contracts. The association may contract to convey or encumber, but the contract "is not enforceable against the association until approved" under (a). After approval the association has the powers needed to complete the transfer, free of any owner interest, including executing deeds.
- (c) Void transfers. "Any purported conveyance, encumbrance, or other voluntary transfer of common elements, unless made pursuant to this section is void."
- (d) Access and support. No conveyance or encumbrance may deprive any lot of rights of access and support.
What This Means in Practice
For boards
Before selling a strip of common land, granting a lender a lien on an amenity, or similar deals, collect written agreements from the required share of votes. Our reading: a board vote alone is not enough, since the statute requires owner agreement in writing. Count votes allocated by the declaration.
For owners
The 80 percent rule protects owners from losing common property to a narrow majority. Owners of lots tied to a limited common element (for example, an assigned area) hold a veto over that element.
What the law does not say
- It does not address leases, licenses or utility easements. Whether an easement is a "voluntary transfer" is an open question; ask counsel.
- It does not set how written agreements are collected, signed or recorded.
- We did not read the parallel condominium section.
Timeline
| Date | Event |
|---|---|
| January 1, 1999 | Planned Community Act effective (S.L. 1998-199) |
Related North Carolina Law
- G.S. 47F-2-118: termination of a planned community
- G.S. 47F-3-102: association powers
- G.S. 47F-3-110: voting and proxies
- Chapter 47F overview
- North Carolina HOA laws complete guide
Board Checklist
- Identify whether the property is a common element or a limited common element.
- Check the declaration for a threshold above 80 percent.
- Collect written agreements, not just a meeting vote.
- For limited common elements, obtain every allocated owner's agreement.
- Make any sale contract subject to the required owner approval.
- Confirm no lot loses access or support.
- Have counsel and the title company review the deal before signing.
Frequently Asked Questions
Can a North Carolina HOA sell common area?
Yes, if owners with at least 80 percent of the votes (or the declaration's higher percentage) agree in writing, and the other requirements of G.S. 47F-3-112 are met.
Can the board mortgage common property?
Only through the same 80 percent written agreement process.
What about limited common elements?
All owners of lots to which the limited common element is allocated must also agree.
What happens if the association transfers without approval?
The statute says the purported transfer is void.
Who gets the sale proceeds?
Proceeds of a common element (other than a limited common element) are an asset of the association. Limited common element proceeds follow the owners' agreement with the association.
Does this apply to old communities?
It is not on the list of sections that reach pre-1999 communities in G.S. 47F-1-102(c).
Where We Stand
Our position: we support this law. A supermajority written-consent rule protects shared property and gives a clean paper trail. Tip: keep a signed-consent tracker by lot and allocated vote, and do not close any transfer until the tracker clears the threshold. 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 text of G.S. 47F-3-112 and G.S. 47F-1-102 in Chapter 47F on ncleg.gov. We did not read court decisions on this section or the condominium counterpart.
How APM Helps
Association Property Managers provides remote HOA and condo management for associations in North Carolina, starting at a flat $99/month per community with no per-door fees or long-term contracts. See remote management in North Carolina, browse every North Carolina state-law guide, or request a free proposal, delivered within three business days. Laws and licensing rules differ by state, and we confirm the requirements for North Carolina when we build your proposal.
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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