State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_47F > GS_47F-2-118

§47F‑2‑118.  Termination of planned community.

(a)        Except in the caseof taking of all the lots by eminent domain (G.S. 47F‑1‑107), aplanned community may be terminated only by agreement of lot owners of lots towhich at least eighty percent (80%) of the votes in the association areallocated, or any larger percentage the declaration specifies. The declarationmay specify a smaller percentage only if all of the lots in the plannedcommunity are restricted exclusively to nonresidential uses.

(b)        An agreement toterminate shall be evidenced by the execution of a termination agreement, orratifications thereof, in the same manner as a deed, by the requisite number oflot owners. The termination agreement shall specify a date after which theagreement will be void unless it is recorded before that date. A terminationagreement and all ratifications thereof shall be recorded in every county inwhich a portion of the planned community is situated and is effective only uponrecordation.

(c)        A terminationagreement may provide for sale of the common elements, but may not require thatthe lots be sold following termination, unless the declaration as originallyrecorded provided otherwise or unless all the lot owners consent to the sale.If, pursuant to the agreement, any real estate in the planned community is tobe sold following termination, the termination agreement shall set forth theminimum terms of the sale.

(d)        The association, onbehalf of the lot owners, may contract for the sale of real estate in theplanned community, but the contract is not binding until approved pursuant tosubsections (a) and (b) of this section. Until the sale has been concluded andthe proceeds thereof distributed, the association continues in existence withall powers it had before termination. Proceeds of the sale shall be distributedto lot owners and lienholders as their interests may appear, as provided in thetermination agreement.

(e)        If the real estateconstituting the planned community is not to be sold following termination, titleto the common elements vests in the lot owners upon termination as tenants incommon in proportion to their respective interests as provided in thetermination agreement.

(f)         Followingtermination of the planned community, the proceeds of any sale of real estate,together with the assets of the association, are held by the association astrustee for lot owners and holders of liens on the lots as their interests mayappear. All other creditors of the association are to be treated as if they hadperfected liens on the common elements immediately before termination.

(g)        If the terminationagreement does not provide for the distribution of sales proceeds pursuant tosubsection (d) of this section or the vesting of title pursuant to subsection(e) of this section, sales proceeds shall be distributed and title shall vestin accordance with each lot owner's allocated share of common expenseliability.

(h)        Except as providedin subsection (i) of this section, foreclosure or enforcement of a lien orencumbrance against the common elements does not of itself terminate theplanned community, and foreclosure or enforcement of a lien or encumbranceagainst a portion of the common elements other than withdrawable real estatedoes not withdraw that portion from the planned community. Foreclosure orenforcement of a lien or encumbrance against withdrawable real estate does notof itself withdraw that real estate from the planned community, but the persontaking title thereto has the right to require from the association, uponrequest, an amendment excluding the real estate from the planned community.

(i)         If a lien orencumbrance against a portion of the real estate comprising the plannedcommunity has priority over the declaration and the lien or encumbrance has notbeen partially released, the parties foreclosing the lien or encumbrance may,upon foreclosure, record an instrument excluding the real estate subject tothat lien or encumbrance from the planned community. (1998‑199,s. 1.)