House Bill 1541 presents further amendments for Chapter 47F Planned Community Act and 47C Condo Act for legislative consideration this year. The amendments are essentially parallel; therefore, we will simply discuss the PCA amendments for the sake of brevity.

Section 1 would impose a limitation on late fees of twenty-five dollars ($25.00) or ten percent (10%) of the amount of an unpaid assessment.

Section 2 would add a new subsection to G.S. 47F-3-103 to read:

"(f) The association shall publish the names and addresses of all officers and board members of the association within 30 days of their election"

Section 3 would restrict membership of any adjudicatory panel appointed by the executive board to members of the association who are not officers of the association or members of the executive board. Maximum fines imposed would be reduced from $150.00 to $100.00 and would not apply for continuous violations until after five days after the decision that the violation occurs. An appeal process would be added whereby the lot owner may appeal the decision of the panel to the full executive board within 15 days after the date of the decision. The executive board would be empowered to affirm, vacate, or modify the prior decision of the adjudicatory panel.

Section 4 would add two provisions dealing with member participation in board meetings and the manner in which those meetings will be conducted.

"(b) Meetings of the executive board shall be held as provided in the bylaws. At regular intervals, the executive board meeting shall provide lot owners an opportunity to attend a portion of an executive board meeting and to speak to the executive board about their issues or concerns. The executive board may place reasonable restrictions on the number of persons who speak on each side of an issue and may place reasonable time restrictions on persons who speak.

(c) Except as otherwise provided in the bylaws, meetings of the association and the executive board shall be conducted in accordance with general principles of parliamentary procedure so as to facilitate the orderly and efficient completion of business."

Section 5 deals with enforcement of liens. Liens consisting solely of fines imposed by the association, interest on unpaid fines, or attorneys' fees incurred by the association solely associated with fines imposed by the association may not be foreclosed on by an association under Article 2A of Chapter 45. The association, however, may enforce the lien by judicial foreclosure as provided in Article 29A of Chapter 1. Further limitations in this section would prevent an association from levying, charging, or attempting to collect a service, collection, consulting, or administration fee from any lot owner unless the fee is expressly allowed in the declaration. Any lien for these fees may only be enforced by judicial foreclosure as provided in Article 29A of Chapter 1. If a lot owner does not contest the collection of debt and enforcement of a lien after the expiration of the 15-day period following the required notice, then attorneys' fees may not exceed $1,200.00.

Section 6 adds new requirements that financial and other records, including records of meetings of the association and executive board, be made reasonably available to the members.

Section 7 would contain express prohibitions against restricting exhibition of United States and North Carolina flags unless specifically provided for in the declaration. If adopted in its present form, no restriction on the use of land shall be construed to regulate or prohibit the display of the flag of the United States or North Carolina, of a size no greater than four feet by six feet. For restrictions recorded prior to October 1, 2005, the restriction will be enforceable if it specifically uses the following terms: Flag of the United States of America, American flag, United States flag or North Carolina flag. The United States flag must be displayed in accordance with the patriotic customs set forth in 4 U.S.C. §§ 5-10, as amended, governing the display and use of the flag of the United States. For declarations recorded after October 1, 2005, the restriction shall be written on the first page of the instrument or conveyance in print that is in boldface type, capital letters, and no smaller than the largest print used elsewhere in the instrument or conveyance. The restriction shall be construed to regulate or prohibit the display of the United States or North Carolina flag only if the restriction specifically states: "THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF THE FLAG OF THE UNITED STATES OF AMERICA OR STATE OF NORTH CAROLINA". This provision would only apply to owners of property who display the flag of the United States or North Carolina on property owned exclusively by them and would not apply to the common areas, easements, rights-of-way, or property owned by others.

The proposed section contains similar provisions for the display of political signs by an association member on that member's property, unless the restriction specifically uses the term 'political signs' for restrictions registered prior to October 1, 2005. For restrictions recorded on or after October 1, 2005, the restriction must be written on the first page of the instrument or conveyance in print that is in boldface type, capital letters, and no smaller than the largest print used elsewhere in the instrument or conveyance. The restriction will be construed to regulate or prohibit the display of political signs only if the restriction specifically states: "THIS DOCUMENT REGULATES OR PROHIBITS THE DISPLAY OF THE POLITICAL SIGNS".

Even when display of a political sign is permitted under this provision, an association may prohibit the display of political signs prior to 45 days before the day of the election and later than seven days after an Election Day. The association may regulate the size and number of political signs that may be placed on a member's property if the association's regulation is no more restrictive than any applicable city, town, or county ordinance that regulates the size and number of political signs on residential property. If the local government does not regulate the size and number of political signs on residential property, the association must permit at least one political sign with the maximum dimensions of 24 inches by 24 inches on a member's property. This provision shall only apply to owners of property who display political signs on their property and does not apply to the common areas, easements, rights-of-way, or property owned by others."

Sections 8 through 14 would make parallel changes to Chapter 47C.

If adopted, these amendments would become effective January 1, 2006, and apply to violations occurring and proceedings commenced on or after that date as well as to fiscal years beginning on or after that date.