Legislative Alert: Senate Bill 378 Passes NC Senate – What It Means for Community Associations
Published: May 14, 2025
By: Kyle Priestley
The North Carolina Senate has recently passed Senate Bill 378 (SB 378)—a proposed piece of legislation that, if enacted into law, could significantly alter how homeowners' associations (HOAs) and condominium associations operate in North Carolina. While the bill is intended to improve transparency and protect homeowners, certain provisions may have unintended consequences that could impact the financial and legal well-being of community associations across the state.
Overview of Senate Bill 378
SB 378 is part of a broader legislative effort to address governance, accountability, and homeowner protections within North Carolina's growing number of common-interest communities. Key components of the bill include:
Changes to collections procedures for delinquent assessments
New limitations on the use of foreclosure as a collections tool
Increased reporting and transparency requirements for HOA boards
Expanded homeowner rights to challenge board decisions or request documentation
While the bill attempts to promote fairness and oversight, one particular provision has raised alarm within the property management and HOA communities: a proposed limitation on how and when associations may pursue delinquent assessment collections.
Implications for Associations
If the bill is enacted in its current form, it could have several significant consequences for HOAs and condo associations:
1. Reduced Ability to Collect Assessments
Associations rely heavily on timely collection of assessments to fund essential services like landscaping, maintenance, insurance, and reserve contributions. SB 378’s proposed limitations on collection methods—including the potential curtailment of foreclosure as a last-resort tool—could result in:
Higher delinquency rates
Increased financial strain on operating budgets
Greater burden on paying homeowners to cover shortfalls
2. Operational Challenges
The bill’s added administrative and reporting requirements could create additional work and potential liabilities for volunteer boards and management companies, particularly in smaller communities with limited resources.
3. Legal and Compliance Uncertainty
Some of the language in the bill remains vague or subject to interpretation, potentially leading to increased litigation and uncertainty as associations navigate the new regulatory environment.
What’s Next for SB 378?
Now that the bill has passed the North Carolina Senate, it heads to the House of Representatives for consideration. The House may:
Adopt the bill as written
Amend key provisions
Send it back to the Senate with revisions
Or, ultimately, reject the bill altogether
Throughout this process, stakeholders including the Community Associations Institute (CAI-NC), association management professionals, and concerned homeowners are working to ensure lawmakers understand the full implications of SB 378 and consider revisions that better balance accountability with operational viability.
How You Can Stay Involved
We encourage all board members, homeowners, and association leaders to:
Stay informed on the bill’s progress through official legislative channels.
Reach out to your State Representatives to express any concerns or support for amendments.
Join advocacy efforts through organizations like CAI-NC.
Connect with your community manager at Priestley Management Company for guidance on how this bill may affect your community.
Our Commitment
At Priestley Management Company, we are actively monitoring the situation and advocating for balanced legislation that protects homeowner rights without compromising the financial stability of the communities we serve. We will continue to provide updates as SB 378 advances through the legislative process.
For questions or to learn more about how this bill might affect your association, please contact your community manager or email us at info@priestleymanagement.com.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Please consult with legal counsel for advice specific to your association.
