North Carolina associations should review several statutory changes taking effect in 2026 and 2027. The changes address nonprofit corporation filings, board composition, and board committees. Several other HOA-related proposals remain pending and are not currently enforceable.
This article summarizes the primary changes identified in Linda’s client-friendly legal update. It is intended for North Carolina HOA and condominium association board members, homeowners, buyers, and sellers.
House Bill 517: Annual Reports for Nonprofit Corporations
Law Status
House Bill 517 became Session Law 2026-52 after Governor Josh Stein signed it on July 7, 2026.
The annual reporting provisions become effective January 1, 2027. They apply to annual reports due on or after that date.
Most North Carolina HOAs and condominium associations are organized as nonprofit corporations under Chapter 55A. Those associations should expect to file an annual report with the North Carolina Secretary of State.
Annual Report Deadline
Beginning in 2027:
- File one annual report each year.
- Submit the report by November 15.
- Continue filing until the corporation is dissolved or, for a foreign corporation, its authority to conduct affairs in North Carolina ends.
- No nonprofit corporate annual report is due in 2026 under this new requirement.
The report must contain current organizational information, including:
- Corporation name and state or country of incorporation.
- Registered office and registered agent.
- Principal office address and telephone number.
- Principal officers and business addresses.
- Contact information for the individual authorized to provide information about persons who may bind the corporation.
- A brief description of the corporation’s activities.
- An email address for the corporation.
The official text is available in Session Law 2026-52.
Filing Fees
The filing fee depends on the filing method:
- Electronic filing: $18.
- Paper filing: $25.
Associations should include the filing fee in the annual compliance budget.
Grace Period and Administrative Dissolution
If the Secretary of State does not receive the report within 60 days after the November 15 due date, the corporation may be presumed delinquent.
Continued delinquency may become grounds for administrative dissolution. Dissolution can create operational problems involving:
- Association contracts.
- Bank accounts and financial transactions.
- Vendor relationships.
- Insurance documentation.
- Assessment collections.
- Pending or future lawsuits.
- The association’s authority to conduct business.
Administrative dissolution does not mean that every existing contract or action automatically becomes invalid. It does mean the association may need to address corporate reinstatement and related questions before normal operations can continue.
Boards should not treat the 60-day period as a substitute for timely filing. Use the period to correct a missed filing or resolve a filing problem.
Minimum of Three Directors
Effective Date and Applicability
Beginning October 1, 2026, a nonprofit corporation formed on or after that date generally must have a board consisting of three or more natural persons.
The law also recognizes that a board may temporarily have fewer than three directors because of vacancies until those vacancies are filled.
This provision applies to corporations organized on or after October 1, 2026. Existing associations formed before that date generally do not need to change their board size solely because of this statutory amendment.
Board Review Items
Board members should:
- Confirm the association’s date of incorporation.
- Review the articles of incorporation and bylaws.
- Identify the required number of directors.
- Review current director terms.
- Document any existing or anticipated vacancies.
- Follow the required election or appointment procedure.
- Confirm whether the members or the board have authority to fill a specific vacancy.
These items are part of standard HOA board member duties. The association’s governing documents remain important, particularly when they impose requirements greater than the statutory minimum.
Updated Committee Rules
The law also updates the rules for nonprofit corporation board committees. The provisions apply to committees created on or after October 1, 2026.
Committee Formation
Unless the articles of incorporation or bylaws provide otherwise:
- A committee must have at least two members.
- The members must be appointed by the board.
- Committee creation and appointments must be approved by the greater of:
- A majority of all directors in office; or
- The number of directors required under the governing documents to take board action.
The board should record committee appointments in meeting minutes or a written consent.
Committee Authority
A committee does not automatically have the full authority of the board.
A committee may exercise board authority only to the extent that authority is granted by:
- The board of directors.
- The articles of incorporation.
- The bylaws.
Committees cannot exercise certain powers, including the authority to:
- Authorize distributions.
- Approve or recommend dissolution, domestication, merger, or the sale or transfer of substantially all association assets.
- Elect, appoint, or remove directors.
- Fill vacancies on the board or its committees.
- Adopt, amend, or repeal the articles of incorporation or bylaws.
A committee’s work also does not remove the board’s responsibility to meet applicable standards of conduct.
Recommended Committee Documentation
For each committee, document:
- Committee name.
- Purpose.
- Members.
- Term of service.
- Authority granted.
- Spending or contracting limits.
- Reporting requirements.
- Board approval requirements.
This structure helps separate committee recommendations from formal board decisions and supports consistent administration of HOA rules and regulations.
Pending Proposals: Not Currently Law
Several HOA-related bills have received attention during the 2025–2026 legislative session. They should not be treated as current law unless enacted.
HB 1212: HOA Accessory Limitation Ban
House Bill 1212 is identified as the HOA Accessory Limitation Ban. The proposal would address HOA restrictions involving:
- Solar panels.
- Edible gardens.
- Pollinator gardens.
- Accessory dwelling units, or ADUs, that comply with applicable requirements.
The bill remains pending and has not become law.
HB 1174: HOA Oversight Act
House Bill 1174 is known as the HOA Oversight Act. The proposal would establish a North Carolina Department of Justice complaint and reporting process involving HOA concerns.
The bill remains in the legislative process. It does not currently create a new enforceable DOJ process for association disputes.
SB 1051: “Don’t Zone Out Child Care”
Senate Bill 1051 is identified as “Don’t Zone Out Child Care.” The proposal would address licensed family child care homes and related restrictions.
It remains pending and is not currently law.
Required Association Response
Associations should not change governing documents, enforcement practices, architectural review procedures, or hearing procedures based solely on these pending proposals. Monitor the North Carolina General Assembly for future action.
Board Compliance Checklist
Boards should complete the following tasks:
- Review the association’s corporate status with the Secretary of State.
- Confirm the registered agent and registered office.
- Verify the principal office and corporate contact information.
- Add the November 15 annual report deadline to the compliance calendar.
- Budget for the $18 electronic or $25 paper filing fee.
- Confirm the date the association was organized.
- Review director terms, vacancies, and election procedures.
- Confirm that newly created committees have at least two members.
- Define each committee’s purpose and authority in writing.
- Monitor Secretary of State filing guidance.
- Consult licensed North Carolina legal counsel about association-specific issues.
HOA Management of Eastern North Carolina supports boards with corporate records, meeting administration, financial coordination, vendor oversight, and day-to-day community association management NC services. Review the HOA management services page for available management options.
Homeowner Compliance Checklist
Homeowners should:
- Keep a current copy of the declaration, bylaws, rules, and regulations.
- Review association notices regarding elections, meetings, hearings, and assessments.
- Understand the procedures for submitting requests or responding to violation notices.
- Ask the board or management company how corporate annual reports are handled.
- Submit address, email, and ownership updates when required.
- Request records through the association’s established process.
- Obtain individual legal advice when a dispute involves personal rights, contract issues, collections, litigation, or property use.
Association management can provide administrative information. It cannot replace advice from an attorney representing an individual homeowner.
Considerations for Buyers and Sellers
Association due diligence should extend beyond the current assessment amount.
Buyers and sellers should review:
- Corporate status with the North Carolina Secretary of State.
- Board composition and current vacancies.
- Governing documents and amendments.
- Recent board and membership meeting minutes.
- Pending or approved special assessments.
- Current litigation and threatened claims.
- Insurance coverage and open claims.
- Violation notices and unresolved compliance matters.
- Vendor contracts and significant maintenance obligations.
- Reserves and planned capital projects.
- Any pending changes affecting the property or association.
A buyer should understand whether the association is active, properly administered, and able to continue its contracts and financial operations. A seller should provide requested association information through the established transaction process.
Key Dates
| Date | Requirement or Status |
|---|---|
| July 7, 2026 | House Bill 517 signed; Session Law 2026-52 enacted |
| October 1, 2026 | Three-director and committee provisions become effective for covered corporations and committees |
| January 1, 2027 | Nonprofit annual report requirement becomes effective |
| November 15, 2027 | First annual report deadline for covered associations |
| 60 days after November 15 | Secretary of State may presume an unfiled report delinquent |
Legal Disclaimer
This article is provided for informational and educational purposes only. It is not legal advice and does not create an attorney-client relationship. North Carolina nonprofit corporation law, community association law, governing documents, and individual circumstances may affect the application of these provisions. Consult a licensed North Carolina attorney for advice about a specific association, property, transaction, dispute, filing, or enforcement matter.
Contact Information
HOA Management of Eastern North Carolina, Inc.
1302 E. Fire Tower Rd
Greenville, NC 27858
Office: 252-565-4820
Emergency Line: 252-565-4820
Email: info.hoaenc@gmail.com
