Governor Josh Stein signed House Bill 517 into law on July 8, 2026, making a series of changes to the North Carolina Nonprofit Corporations Act.
Most community associations (“HOA’s”) in North Carolina are organized as nonprofit corporations under Chapter 55A of the North Carolina General Statutes, meaning several of these changes apply directly to homeowners associations and condominium associations (collectively, “HOAs”), across the state.
The bill touches several areas of nonprofit governance, from how nonprofit corporations merge and restructure to how many directors a board must have. For HOA’s, though, the most immediate and meaningful change is a brand-new obligation: filing an annual report with the North Carolina Secretary of State (“NCSOS”) each year, beginning in 2027.
While North Carolina for-profit business corporations, limited liability companies, and limited liability partnerships have been required to file annual reports, filing an annual report was not previously required for nonprofit corporations. HOA’s that have never had to file anything with the NCSOS beyond their original articles of incorporation need to understand and follow this new requirement.
Annual Reports Are Now Required
Starting January 1, 2027, every Chapter 55A North Carolina nonprofit corporation, including most HOA’s, must file an annual report with the NCSOS. The report is due by November 15 each year and must include:
- The corporation’s name and state of incorporation
- The street address and mailing address (if different) of the registered office
- The county in which the registered office is located
- The name and email address of its registered agent
- The principal office address and phone number
- The names, titles, and business street addresses of principal officers (i.e., the Board of Directors)
- The name, mailing address, email address, and telephone number of an individual who is authorized to provide information regarding persons with authority to bind the corporation
- A brief description of the HOA’s activities
- A contact email address
The filing fee is $25 for a paper report or $18 for an electronic report. Nonprofit corporations can amend a previously filed report at any time to correct or update information.
For those HOA’s that miss the deadline, the NCSOS provides a 60-day grace period prior to the report being marked delinquent. A delinquent annual report is now listed as a specific ground for administrative dissolution, so HOA Board of Directors will want to build this report filing into their annual calendar.
Administrative dissolution isn’t necessarily permanent. An HOA that has been administratively dissolved can apply for reinstatement once the reason for the dissolution, such as a missing annual report, has been resolved. Reinstatement relates back to the original dissolution date, so the HOA’s legal existence is treated as though it never lapsed. Even so, going through dissolution and reinstatement takes time and creates uncertainty for an HOA’s contracts, insurance, and authority to act, so it’s far simpler to avoid the situation by filing the annual report on time.
Boards Must Have At least Three Directors
Except for Boards of private foundations, the law raises the minimum board size for nonprofit corporations from one (1) director to three (3). This change will have little impact on HOA’s as both the North Carolina Planned Community Act and the North Carolina Condominium Act already require Boards to be composed of a minimum of three (3) directors following transition from developer control.
Board Vacancies
This new law also clarifies that a board with vacancies may temporarily fall below the three (3) member minimum while those vacancies are being filled, so a resignation or an unexpected vacancy won’t put an HOA out of compliance immediately.
Committee Rules Get a Refresh
The law also updates how HOA boards can form and use committees of the Board. Committees of the Board are committees comprised in part by Board members. Each committee of the Board must be comprised of at least two (2) board members, and unless the articles of incorporation or bylaws say otherwise, creating a committee requires approval by a majority of the directors in office. As before, committees of the Board can’t take certain actions on the Board’s behalf, including approving mergers, dissolution, or the sale of substantially all of the association’s assets, or amending the governing documents.
What HOA’s Should Do Now
Most of these changes take effect October 1, 2026, with the annual report requirement following on January 1, 2027. Boards can get ahead of the new law by taking a few practical steps now.
- Confirm the HOA’s information on file with the Secretary of State is accurate. The annual report will ask for the registered agent’s name and email address, the registered and principal office addresses, and the names, titles, and addresses of officers. Boards should pull the HOA’s current record from the Secretary of State’s website and update anything that’s outdated before the first annual report is due.
- Designate who will handle the filing. Some HOA’s rely on a management company for this type of administrative task, while others assign it to an officer of the Board. Either way, the Board should decide now who will handle the filing and build the November 15 deadline into the HOA’s annual calendar, alongside other recurring obligations like tax filings and insurance renewals.
- Budget for the filing fee. At $25 for a paper filing or $18 electronically, the cost is modest, but it’s a new line-item worth including in next year’s budget so it doesn’t get missed.
- Set a reminder well before the deadline. Because a delinquent annual report is now a specific ground for administrative dissolution, HOAs should build in a buffer, rather than wait until November 15 to start the process.
None of these changes require an immediate overhaul of how an HOA operates. The most important thing an HOA Board can do between now and the effective dates is to get organized: understand the new requirement to file an annual report, know when the annual report is due, know who is responsible for filing the report, and know where the HOA’s governing documents stand on Board size and committee structure. HOAs that take these steps now will be in a much better position when the new requirements take effect than those that wait until the deadlines are already close.
Ward and Smith’s Community Association practice group is available to help HOA Boards understand how these changes apply to their specific community.
