New bill would garnish tax returns for past due HOA fees

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NORTH CAROLINA - Under North Carolina law, if you live in a neighborhood that has a homeowner association and you don't pay your dues, that HOA can foreclose on your house.  

But now a new bill has been introduced in the North Carolina Legislature that would strip HOAs of their ability to foreclose.  

Instead it would open up a legal avenue for associations to try to satisfy debts owed to them including garnishing state income tax returns.
 
The idea is to keep people from losing their homes because they haven't paid their HOA fees.

“It's a big issue to a lot of people,” Rep. Rodney Moore (D-Mecklenburg) said.
 
He introduced House Bill 931because he said home owners need more protection against heavy-handed homeowner associations that have the ability to foreclose on those who haven't paid their HOA fees.
 
“We experienced an influx of a lot of HOAs abusing that particular power,” Moore said.
 
He wants to protect homeowners but at the same time, if there is a legitimate claim, it can give them some recourse.
 
“Problem is if they don't have any money for that they probably won't have any tax return money either,” Moore said.
 
Tom Corey is a homeowner and former HOA president who lives in north Charlotte. 
 
The foreclosure power needs to remain intact, he said.
 
“Right now, that's the best mechanism to get people to pay their HOA fees,” Corey said. “Otherwise, people tend to treat it more as a voluntary payment which it shouldn't be.”
 
Homeowner Jill Cope disagrees.
 
“Foreclosure has such has such huge repercussions not just for the homeowners but for the families,” Cope said. “I mean, we have small children and other people that are impacted by foreclosure.”
 
Proponents of the bill said that includes innocent neighbors whose property values suffer when a foreclosure happens next door.
 
"I think there are other penalties that might be used instead of a foreclosure," Cope said. 
 
The Constitutional amendment will still have to get the nod from the state House and Senate before it heads to the ballot for the voters to decide, Moore said.

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