§ 47C-3-116. Lien for assessments.
§ 47C‑3‑116. Lienfor assessments.
(a) Any assessmentlevied against a unit remaining unpaid for a period of 30 days or longer shallconstitute a lien on that unit when a claim of lien is filed of record in theoffice of the clerk of superior court of the county in which the unit islocated in the manner provided herein. Prior to filing a claim of lien, theassociation must make reasonable and diligent efforts to ensure that itsrecords contain the unit owner's current mailing address. No fewer than 15 daysprior to filing the lien, the association shall mail a statement of theassessment amount due by first‑class mail to the physical address of theunit and the unit owner's address of record with the association, and, ifdifferent, to the address for the unit owner shown on the county tax recordsand the county real property records for the unit. If the unit owner is acorporation, the statement shall also be sent by first‑class mail to themailing address of the registered agent for the corporation. Unless thedeclaration otherwise provides, fees, charges, late charges and other chargesimposed pursuant to G.S. 47C‑3‑102, 47C‑3‑107, 47C‑3‑107.1,and 47C‑3‑115 are enforceable as assessments under this section.Except as provided in subsections (a1) and (a2) of this section, theassociation's lien may be foreclosed in like manner as a mortgage on realestate under power of sale under Article 2A of Chapter 45 of the GeneralStatutes.
(a1) An association maynot foreclose an association assessment lien under Article 2A of Chapter 45 ofthe General Statutes if the debt securing the lien consists solely of finesimposed by the association, interest on unpaid fines, or attorneys' feesincurred by the association solely associated with fines imposed by theassociation. The association, however, may enforce the lien by judicialforeclosure as provided in Article 29A of Chapter 1 of the General Statutes.
(a2) An association shallnot levy, charge, or attempt to collect a service, collection, consulting, oradministration fee from any unit owner unless the fee is expressly allowed inthe declaration. Any lien secured by debt consisting solely of these fees mayonly be enforced by judicial foreclosure as provided in Article 29A of Chapter1 of the General Statutes.
(b) The lien under thissection is prior to all other liens and encumbrances on a unit except (i) liensand encumbrances (specifically including, but not limited to, a mortgage ordeed of trust on the unit) recorded before the docketing of the lien in theoffice of the clerk of superior court, and (ii) liens for real estate taxes andother governmental assessments or charges against the unit. This subsectiondoes not affect the priority of mechanics' or materialmen's liens.
(c) A lien for unpaidassessments is extinguished unless proceedings to enforce the lien areinstituted within three years after the docketing thereof in the office of theclerk of superior court.
(d) This section doesnot prohibit actions to recover sums for which subsection (a) creates a lien orprohibit an association taking a deed in lieu of foreclosure.
(e) A judgment, decree,or order in any action brought under this section shall include costs andreasonable attorneys' fees for the prevailing party. If the unit owner does notcontest the collection of debt and enforcement of a lien after the expirationof the 15‑day period following notice as required in subsection (e1) ofthis section, then reasonable attorneys' fees shall not exceed one thousand twohundred dollars ($1,200), not including costs or expenses incurred. Thecollection of debt and enforcement of a lien remain uncontested as long as theunit owner does not dispute, contest, or raise any objection, defense, offset,or counterclaim as to the amount or validity of the debt and lien asserted orthe association's right to collect the debt and enforce the lien as provided inthis section. The attorneys' fee limitation in this subsection shall not applyto judicial foreclosures or proceedings authorized under subsection (d) of thissection or G.S. 47C‑4‑117.
(e1) A unit owner may notbe required to pay attorneys' fees and court costs until the unit owner isnotified in writing of the association's intent to seek payment of attorneys'fees and court costs. The notice must be sent by first‑class mail to theproperty address and, if different, to the mailing address for the unit ownerin the association's records. The association must make reasonable and diligentefforts to ensure that its records contain the unit owner's current mailing address.The notice shall set out the outstanding balance due as of the date of thenotice and state that the unit owner has 15 days from the mailing of the noticeby first‑class mail to pay the outstanding balance without the attorneys'fees and court costs. If the unit owner pays the outstanding balance withinthis period, then the unit owner shall have no obligation to pay attorneys'fees and court costs. The notice shall also inform the unit owner of theopportunity to contact a representative of the association to discuss a paymentschedule for the outstanding balance as provided in subsection (e2) of thissection and shall provide the name and telephone number of the representative.
(e2) The association,acting through its executive board and in the board's sole discretion, mayagree to allow payment of an outstanding balance in installments. Neither theassociation nor the unit owner is obligated to offer or accept any proposedinstallment schedule. Reasonable administrative fees and costs for accepting andprocessing installments may be added to the outstanding balance and included inan installment payment schedule. Reasonable attorneys' fees may be added to theoutstanding balance and included in an installment schedule only after the unitowner has been given notice as required in subsection (e1) of this section.
(f) Where the holderof a first mortgage or first deed of trust of record, or other purchaser of aunit, obtains title to the unit as a result of foreclosure of a first mortgageor first deed of trust, such purchaser, and its heirs, successors and assigns,shall not be liable for the assessments against such unit which became dueprior to acquisition of title to such unit by such purchaser. Such unpaidassessments shall be deemed to be common expenses collectible from all the unitowners including such purchaser, and its heirs, successors and assigns.
(g) A claim of lienshall set forth the name and address of the association, the name of the recordowner of the lot at the time the claim of lien is filed, a description of thelot, and the amount of the lien claimed. The first page of the claim of lienshall contain the following statement in print that is in boldface, capitalletters and no smaller than the largest print used elsewhere in the document:"THIS DOCUMENT CONSTITUTES A LIEN AGAINST YOUR PROPERTY, AND IF THE LIENIS NOT PAID, THE HOMEOWNERS ASSOCIATION MAY PROCEED WITH FORECLOSURE AGAINSTYOUR PROPERTY IN LIKE MANNER AS A MORTGAGE UNDER NORTH CAROLINA LAW." Theperson signing the claim of lien on behalf of the association shall attach toand file with the claim of lien a certificate of service attesting to theattempt of service on the record owner, which service shall be attempted inaccordance with G.S. 1A‑1, Rule 4(j) for service of a copy of a summonsand a complaint. If the actual service is not achieved, the person signing theclaim of lien on behalf of the association shall be deemed to have met therequirements of this subsection if service has been attempted pursuant to bothof the following: (i) G.S. 1A‑1, Rule 4(j)(1) c., d., or e.; and (ii) bymailing a copy of the lien by regular, first‑class mail, postage prepaidto the physical address of the unit and the unit owner's address of record withthe association, and, if different, to the address for the unit owner shown onthe county tax records and the county real property records for the unit. Inthe event that the owner of record is not a natural person, and actual serviceis not achieved, the person signing the claim of lien on behalf of theassociation shall be deemed to have met the requirements of this subsection ifservice has been attempted once pursuant to the applicable provisions of G.S.1A‑1, Rule 4(j)(3) through G.S. 1A‑1, Rule 4(j)(9). (1985 (Reg. Sess., 1986), c.877, s. 1; 2005‑422, s. 16; 2006‑226, s. 14(a); 2009‑515, s.2.)