A North Carolina HOA fight over clubhouse dues could help define how far an association’s foreclosure power can reach when owners fall behind on required payments.
The case involves Smoky Mountain Country Club, a planned community near Bryson City. According to The Charlotte Observer, attorney Shira Hedgepeth is asking the North Carolina Supreme Court to review a Court of Appeals ruling that she says could affect homeowners across the state.
The dispute centers on what kinds of charges an HOA can enforce through liens and foreclosure when those obligations are written into a community’s governing documents.
HOA bills tied to amenities, services, fines, fees, or third-party arrangements can become serious once an association treats them as assessments. In many states, unpaid assessments can lead to liens, collection costs, legal fees, and foreclosure proceedings.
The Dispute Started With Clubhouse Dues
The Court of Appeals case involves Robinson Joseph Myers and Elizabeth Owl-Myers, who owned property in Smoky Mountain Country Club. The disputed payments funded clubhouse and recreational facilities owned by a separate entity, not the homeowners association itself.
The Charlotte Observer reported that the community’s governing documents required owners to pay the dues to the HOA, which then forwarded the money to the private entity that owned the clubhouse and recreational facilities.
A lower-court judge initially sided with the homeowners. The Court of Appeals reversed that ruling and held that the homeowners agreed to be bound by the clubhouse dues agreement when they purchased their properties.
The Ruling Raises Questions Beyond One Community
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Hedgepeth told The Charlotte Observer the ruling could allow associations to enforce a wider range of obligations if those requirements are written into the covenants.
North Carolina law says an unpaid assessment attributable to a lot for 30 days or longer can become a lien once a claim of lien is filed. The statute also says certain fees, charges, late charges, and other sums due under the declaration may be subject to that lien.
A fee that begins as an amenity dispute or service charge may become a lien problem if the declaration gives the association authority to collect it as an assessment.
Lawmakers Have Tried To Limit HOA Foreclosures
The Charlotte Observer reported that North Carolina lawmakers have repeatedly proposed HOA changes, including mediation requirements, stronger notice rules, fine caps, and limits on foreclosure over smaller debts.
A 2023 Charlotte Observer investigation found HOAs had filed to foreclose in more than 5,500 cases statewide since 2018, and owners lost property or time-share stakes in more than 600 cases.
Homeowners Should Check How Fees Are Classified
HOA owners should read the declaration, bylaws, account statements, and violation notices before a missed payment becomes a lien filing.
Ask whether the charge is being treated as an assessment, what covenant authorizes it, how much is principal versus fees or attorney costs, and what deadline applies before the association can take the next step.
Any notice mentioning a lien, foreclosure, collection attorney, or hearing should be handled quickly. Owners disputing a charge should keep records, request the association’s written basis for the debt, and get qualified legal guidance before the balance grows into a threat against the property.