Dues and Don’ts

On March 24, 2026, the North Carolina Court of Appeals in Raleigh heard a thorny case about a homeowners association dispute that began over a decade ago. The plaintiffs were a retired Native American couple, Robinson Myers and Elizabeth Owl-Myers, whose HOA had initiated a foreclosure on their home in Whittier, North Carolina, to collect a $48,120 debt. 

The Myerses were up to date on their mortgage and their monthly homeowners association (HOA) fees for property maintenance and other expenses. The debt resulted primarily from over 10 years of “clubhouse dues” (about $100 a month) owed to their HOA in exchange for access to a nearby fitness center, pool, and tennis courts, none of which the Myerses have used in many years.

According to the Myerses’ attorney, Shira Hedgepeth, several facts undermine the validity of the clubhouse dues: The clubhouse is located outside the community of Smoky Mountain Country Club (SMCC), where the Myerses live; it’s open to the public as well as country club residents; and it is owned by Conley’s Creek Limited Partnership, the same developer who built SMCC. As such, Hedgepeth argues that clubhouse dues constitute a profit for a third party rather than a valid homeowners’ common expense.

It’s like, Hedgepeth said, a developer “can set up and say, ‘I’m going to buy the grocery store down the street, and you’re required to pay $100 for groceries … whether you use it or not.’” (Hedgepeth also owns a home in Smoky Mountain Country Club and is involved in her own lawsuit against SMCC.)

Attorney Ashley B. Oldfield, who represents SMCC’s homeowners association, said the clubhouse dues were clearly stated in the HOA’s governing documents when the Myerses bought their property in 2006. Whether the homeowners regarded the fees as valid or not, they were contractually obligated to pay them. 

Over the past decade of legal consultations and court battles, the Myers family has received mixed messages on the fee’s validity. Most recently, in response to a complaint the Myerses filed after foreclosure proceedings began, a trial court determined in 2025 that the clubhouse dues were “not a valid fee when applied to the [Myerses].” The HOA appealed, leading to the Court of Appeals date this March.

According to Harmony Taylor, a partner at Law Firm Carolinas with over 20 years of experience representing HOAs, the Myerses’ conflict comes down to basic contract law. “It really is an unfortunate situation that this happened in the first place,” Taylor said, but the couple has “no case at all, and never did.”

The primary law governing homeowners associations in North Carolina is the Planned Community Act of 1999. This document outlines HOAs’ authority to collect monthly dues, maintain common areas, and impose fines, as well as homeowners’ rights to vote and receive due process when facing penalties, which usually include a written warning, an opportunity for a hearing, and a $100 daily cap on fines. However, if homeowners ultimately do not pay their fines—or, in the Myerses’ case, their clubhouse dues—HOAs may use foreclosure to collect the debt.

Despite these safeguards, disputes can escalate quickly. Say a hospitalized homeowner misses a written warning and comes home to an overwhelming month’s worth of daily fees. A compassionate HOA board might forgive the oversight, but a stricter board, frustrated by a pattern of delinquent payments among its homeowners, could legally enforce the fees.

A challenge for homeowners is the lack of a North Carolina office dedicated to overseeing HOAs and fielding homeowner complaints. This makes filing a lawsuit—or defaulting on payments until an HOA files suit—one of the only legal mechanisms for resolution. But many homeowners can’t afford to sue. The fact that this case even reached the Court of Appeals is unusual.

As Owl-Myers waited for the results of the March court case, she reflected on the years of financial and emotional stress her family has endured. “The thought of … losing that home and having to pay all these attorney fees, you know, it’s a little daunting,” she said. “It could wipe us out.”

The ‘T’ word

The first American homeowners association was established in 1831 in Manhattan’s Gramercy Park neighborhood, where residents paid to access and maintain the private park. But HOAs remained rare until the mid-20th century, when a first wave of suburban homeowners found themselves both impacted by their neighbors’ actions and mutually dependent on common services. 

HOAs have seen massive growth over the last 60 years, skyrocketing from 500 associations in the 1960s to roughly 375,000 today. Now, over 75 million Americans live in neighborhoods with HOAs, and about 80% of new homes in subdivisions are part of an HOA. Just over a quarter of North Carolina’s population belongs to an HOA.

Typically, developers establish HOAs to transfer neighborhood control to homeowners as they buy into the community. Local governments favor them as a way to reduce their own maintenance and infrastructural responsibilities. In many counties and municipalities, requirements for new developments regarding stormwater control, common spaces, and private roads make HOAs the easiest—and sometimes the only—way to get new subdivisions approved. 

An HOA operates like a small, volunteer-run government, providing services, enforcing rules, and holding public meetings and elections. The benefits are numerous. HOAs offer communities that align with homeowners’ social norms, alongside a collective decision-making structure to oversee future neighborhood issues. And by providing higher-quality services than those typically offered by municipalities, like infrastructure maintenance and trash disposal, HOAs can improve homeowners’ quality of life and keep property values high.

“I don’t want to mow grass and trim bushes anymore,” said Charles “Chuck” Williams of his decision to move to an HOA-run neighborhood in Leland, North Carolina. “And I don’t want my next-door neighbor to have a car sitting up on cinder blocks or a refrigerator on his front porch.”

But even homeowners who seek out HOAs specifically for their regulatory power may balk when facing penalties themselves. For Williams, the breaking point came when he paid a landscaping company to aerate a patch of muddy ground adjacent to his property, rather than asking the HOA to bring in its own landscaper. For this violation, the HOA fined him $100, turning an apolitical retiree into a crusader for change. In 2023, Williams launched North Carolina Citizens for HOA Reform, a grassroots organization pushing for “fair and transparent governance” in HOAs. (Williams died in April of this year.)

Transparency–“the ‘T’ word,” as Harmony Taylor calls it—comes up at every meeting Taylor attends between homeowners and their HOA board. She believes this problem could be mitigated by a clear disclosure page accompanying every real estate listing for a home purchased in an HOA-run neighborhood. Many homeowners, Taylor said, “just did not understand what they were getting into. And if they had been told upfront, often they would have been okay with it, but the lack of knowing makes people very defensive.”

Jeffrey Baldwin, on the other hand, was no stranger to HOAs before becoming a reform activist. He had lived in his Charlotte home for over a decade when he was fined for parking a “commercial vehicle” in his driveway. Baldwin noted that the vehicle was a four-cylinder truck with a private tag and no logos, which he and his husband had owned for years; according to Baldwin, “the only thing that changed was the board and the management company.” 

Regardless, the violation eventually escalated to thousands of dollars in debt, and the HOA initiated a foreclosure. Having worked as the statewide bankruptcy administrator for nonprofit law firm Legal Aid, Baldwin had industry knowledge to help him fight, and eventually win, a legal battle against his HOA. But in court, he noticed that most of those involved in HOA-related lawsuits were women and people of color. 

“They had no other option but to agree to pay,” said Baldwin. “That’s when it became more of a fight, not only for me, but for all the people that I saw on that screen that didn’t have the time, the knowledge, or the resources to do what I did.”

Baldwin launched SaferHOA, a grassroots coalition to protect homeowners from predatory HOA practices and support state legislative reform. Like many activists, Baldwin supports the existence of homeowners associations and property management companies—but he wants stronger homeowner protections so that disagreements don’t spiral into foreclosures.

Take a nail salon, Baldwin said. A dissatisfied customer can file a complaint with the public health department, and if there is wrongdoing, the salon will be shut down. But there is no office in North Carolina that regulates HOAs and handles homeowner complaints. “There’s no accountability, there’s no oversight, there’s no review, there’s nothing.”

‘A Crisis’

As the retired director of the Economic Justice Initiative at Legal Aid, Johnnie Larrie has seen a wide spectrum of HOA-related cases. Sometimes HOAs initiate aggressive debt collection against residents with extenuating circumstances like illness or disability, leading to a debt build-up. 

HOAs and property management companies can also make mistakes. “Sometimes we get the ledger,” Larrie said, “and the ledger makes absolutely no sense. And so when you question some of these HOAs about not only what’s on the ledger, but the way the ledgers are being kept, and they themselves can’t justify assessments, sometimes we’re successful.”

These successes, however, depend on homeowners taking quick action, whether at Legal Aid or elsewhere. Larrie notes that traditional mortgage foreclosures follow a gradual, step-by-step process that allows homeowners to remedy the problem before losing their homes. But HOAs can issue fines so quickly that, by the time homeowners seek legal help, they are already underwater. “That front-end debt collection process that HOAs are permitted to operate under,” Larrie said, “to me, that’s where a lot of the problem lies.”

In 2025, North Carolina Senate Bill 378 and North Carolina House Bill 444 proposed foreclosure limitations, capping violation fines, requiring mediation before cases go to court, and increasing state oversight of HOAs. Despite significant bipartisan support—S.B. 378 passed the Senate unanimously before stalling in the House, and H.B. 444 was co-sponsored by a Democrat and a Republican—neither bill passed. This year, four more bills propose HOA reform measures, including S.B. 1047, which would eliminate foreclosure as a viable means for HOAs to collect debts consisting solely of fines.

State Rep. Ya Liu (D-Wake) co-sponsored all three HOA-related House bills in the 2025-26 legislative cycle. For Liu, ideal legislation would eliminate both fine-based foreclosures and non-judicial foreclosures—those that don’t go to trial—for HOA-related issues. “We’re asking for a bare minimum,” said Liu. “Bare minimum.”

Community Associations Institute (CAI) has a different perspective. A 50,000-member organization with chapters around the world, CAI is an international resource and education hub for community associations and homeowners and a powerful lobbying force. The organization believes foreclosure should be used as a last resort and supports using liens rather than foreclosure to address fines. (A lien prevents the sale of a home until the homeowner has paid off a debt, while a foreclosure seizes the home in order to satisfy the debt.)

However, CAI emphasizes the importance of foreclosure as a mechanism of accountability for HOAs, which typically have lean budgets and rely on homeowner dues to pay for essential services. 

Maura Fennelly, who wrote her Northwestern University dissertation on homeowners associations, notes that when HOAs can’t reliably collect assessments, the consequences can be grave. If an HOA’s reserves are low, insurance companies may increase their premiums. Necessary repairs may be ignored. A worst-case scenario is the Surfside, Florida, condominium collapse in 2021, in which 98 people died after structural repairs were delayed due in part to homeowner disagreement over the cost.

Limiting HOAs’ abilities to foreclose on residents is “a tricky situation,” Fennelly said, “because if HOAs aren’t collecting their assessments, especially condominiums, it can get very bad.”

‘That Little Bit of Power’

One question nags at Elizabeth Owl-Myers. Fourteen families had liens placed on their homes for refusing to pay clubhouse dues, but the Myerses were the only ones to have a foreclosure filed against them. Maybe, Owl-Myers said, this was “because we’re the only Native American family.”

Oldfield said that race “was not a factor in any way” in SMCC’s decision to initiate foreclosure against the Myerses. While the association planned to pursue every family’s debt, the Myerses’ decision to sue over what they owed led to their foreclosure first.

Owl-Myers and Hedgepeth agree that there is no evidence that race played a role in the HOA’s actions against the Myerses. But many people of color in HOA-governed neighborhoods wonder if they are treated differently. Multiple examples of HOA discrimination have made the news in recent years, including a 2020 case in Winston-Salem in which a pool committee member called the police on a Black mother and child due to the incorrect belief that they were not community residents.

HOAs have a long history of racial bias and segregation. In 1926, the U.S. Supreme Court upheld both exclusionary zoning and racially restrictive covenants—clauses tied to property deeds prohibiting sales to specific racial and ethnic groups—allowing community associations to make their own rules about who could live in the neighborhood. While the passage of the Fair Housing Act of 1968 outlawed such discrimination, racially restrictive covenants remain in the bylaws of many community associations today. The covenants are illegal and unenforceable, but they can’t be removed without approval from a high percentage of homeowners. 

Despite fair housing laws, in practice, “there is nothing that really stops an HOA from being discriminatory,” said North Carolina Justice Center attorney Jason Pikler. But a homeowner’s suspicions are typically hard to prove. When working with a Black family who suspected discrimination based on fines they’d received over their garbage cans, Pikler encouraged them to ask other residents if they’d been fined. 

“It’s uncomfortable, obviously, for them to go to their neighbors and ask those things,” Pikler said. So homeowners are often “just left with the sense of, you know, ‘Why am I getting picked on when my neighbors aren’t?’ But they don’t know if their neighbors are getting picked on or not.”

Harmony Taylor notes that her firm educates all of its HOA boards on the importance of fair treatment of homeowners. CAI-affiliated lawyers Leah Burton and Noelle Hicks have written about the histories of racism in community associations and HOA boards’ duty to tackle implicit bias and speak up for homeowners experiencing harassment.

Still, stories of disparate treatment and disproportionate punishment abound. This is unsurprising, Larrie suggested, within a structure that allows for quick, repeated fines with little oversight. “You take a little bit of power, and you feel good about that little bit of power, and you feel good about wielding it,” Larrie said. “You get to the point where the mechanisms are not there to keep you from making crazy, untimely, overly burdensome assessments.”

On May 6, Hedgepeth and the Myerses received word of the North Carolina Court of Appeals’ decision on their case. The court ruled in favor of Smoky Mountain Country Club’s homeowners association, reversing the trial court’s 2025 decision and ordering the court to determine the total amount the Myerses now owe. Hedgepeth filed a motion with the Court of Appeals to reconsider its decision, which was, she said, “denied within an hour.” Hedgepeth then petitioned North Carolina’s Supreme Court to review the case and is awaiting its decision.

For Elizabeth Owl-Myers, the challenges with SMCC persist. Since the Myerses filed their lawsuit, the HOA cut down the large trees that had long shaded the area near their condo, which they felt was retaliatory. (Oldfield said the trees were overgrown and causing decay to the condo stairwell.) 

The troubles are “never-ending,” Owl-Myers said. “It’s a foreboding that you know that anything that happens, they’re just going to try to get their way out of it.”