In 2025, the North Carolina General Assembly introduced a sweeping reform bill for homeowners and condominium associations: House Bill 444. Among its many provisions, one of the most significant (and potentially impactful) revolves around financial transparency for associations. While HOA disputes and frustrations over money and governance are nothing new, HB 444 could mark a turning point — but not without raising new questions.
In this blog post, we’ll explore what the bill proposes, why it matters, and what homeowners — now or in the future — should pay attention to.
What HB 444 Requires: The Transparency Provisions
— Annual Financial Statement Within 75 Days
Under HB 444, associations (HOAs, condo associations, etc.) would be required to produce and deliver to all unit/lot owners an annual income and expense statement and a balance sheet, at no charge, within 75 days after the end of the association’s fiscal year.
This is more than just a nice-to-have. It institutionalizes a regular cadence for financial reporting, forcing associations to get their books in order and share the results in a timely fashion.
Furthermore, the bill allows — regardless of whatever the bylaws say — that owners may call for a more in-depth compilation, review, or audit of the association’s books. That deeper review can be triggered either by a majority vote of the association’s executive board or by a majority vote of unit/lot owners at a properly convened annual or special meeting.
— Right to Inspect & Copy Management Contracts
In addition to financial statements, HB 444 gives owners the right to inspect and copy, under reasonable conditions, any contract between the association and a managing agent (i.e., a management company) that exercises powers on behalf of the association.
To exercise this right, the owner (or the owner’s authorized agent) must submit a written request for inspection at least five business days prior to the intended inspection date, and the request must meet certain conditions (e.g., show proper purpose) under state corporate-association law.
If the association refuses to provide access and a court later orders them to comply, the court may also order the association to pay the homeowner’s reasonable attorneys’ fees and costs.
In short: HB 444 aims to make management contracts — often black boxes to homeowners — subject to review and accountability.
Why These Changes Matter — Potential Benefits of Transparency
Build Trust — and Reduce Suspicion
For many homeowners, one of the most frustrating aspects of HOA membership is not knowing where their dues go. Budgets, expenditures, “miscellaneous” line items — these can create suspicion, especially when communication is poor. A mandated annual financial statement gives all members a baseline: a clear snapshot of income, spending, reserves, liabilities — and how they compare to prior years.
When associations are required to show their books, it becomes harder to hide wasteful spending, mismanagement, or even intentional financial misdeeds. The possibility of an audit (if requested) strengthens that accountability.
Empower Owners — More Control Over Contracts and Management
Contracts between HOAs and management companies (for services like maintenance, landscaping, administration, collections, etc.) can be costly — and long-term. By giving owners a right to inspect and copy those contracts, HB 444 restores some balance. It allows owners to see exactly what terms the management company is working under: scope of services, fees, renewal terms, fine-collection practices, etc.
That transparency can be a leverage point for questioning unfair practices or pushing for changes (for example, choosing a different management company, renegotiating terms, or challenging auto-renewals).
Prevent Surprise Fee Hikes, Misuse of Funds, or Misaligned Priorities
With annual statements in hand, homeowners can better see if the HOA is over-spending (on nonessentials), under-funding maintenance/reserves, or misallocating resources. Owners are more equipped to ask hard questions, demand accountability, and — if needed — vote for budget changes or audits.
It’s also harder for associations to hide behind ambiguous “miscellaneous” expenses. Regular financial reporting lays a foundation for fairer, more transparent governance.
But It’s Not a Cure-All — What Residents Should Watch Out For
Timing and Compliance — 75 Days After Fiscal Year Close Could Be Tight
Producing a full income/expense statement and balance sheet for an entire association — possibly hundreds of units — is a significant task. Some associations may struggle to compile and review all necessary data within 75 days, especially if accounting has been lax, records are disorganized, or there was no prior habit of rigorous bookkeeping.
If management companies or HOA boards are understaffed, disorganized, or resistant, this could lead to delays, incomplete reports, or superficial compliance.
Also, the law only requires that financial records go back three years (unless bylaws demand more) when owners request to examine. That means if problems date further back, accountability may be limited.
Good-Faith Requirement for Contract Inspections — Potential Barrier for Some Owners
While the right to inspect management contracts exists, it’s a “qualified” right: the owner must show proper purpose and request with reasonable specificity.
In practice, this may deter some homeowners from requesting documents — particularly those who are not confident in legalese, or worry about being seen as trouble-makers. Associations could deny vague requests, forcing owners to clarify purpose or risk being turned away.
Also, while courts can award attorneys’ fees to owners who successfully sue for access, many homeowners may not want to take legal action — which undermines the deterrence power.
Doesn’t Guarantee Good Management — Transparency ≠ Competence
Transparency is a tool — not a guarantee. Even with clear books and open contracts, an HOA can still make poor decisions (underfund reserves, mismanage repairs, hire subpar vendors, under- or over-spend).
If homeowners don’t engage — read the statements, vote when needed, ask questions, call for audits — transparency alone may not lead to better outcomes. It merely empowers those who take action.
What HB 444 Means — Especially for Homeowners in Places Like Hertford, NC (and Similar Communities)
Living in a smaller town or rural area (like Hertford) often means that HOAs are smaller, sometimes more informal — and sometimes less organized. For such communities, HB 444’s transparency provisions could be a double-edged sword:
- Benefit: For small HOAs, having a standardized financial statement can bring accountability, clarity, and trust among neighbors. In smaller communities, where members might know each other personally, transparency could help avoid disputes or misunderstandings about dues, spending, or contract obligations.
- Challenge: Smaller HOAs may not have the administrative capacity to quickly produce accurate financial statements within 75 days — especially if they rely on volunteer board members or part-time management. Without dedicated bookkeeping, it might be a burdensome requirement.
- Opportunity: For any homeowner who’s been frustrated over lack of information — surprise fees, vague budgets, unclear maintenance plans — HB 444 offers a concrete tool to demand accountability. It can also push associations to adopt better practices (e.g., use professional accounting, keep detailed records, hold regular reviews).
In short: for smaller, close-knit communities, HB 444 could be transformative — but effective only if homeowners and boards commit to using the transparency it creates.
What Homeowners Should Do (or Think About) — If HB 444 Becomes Law
If you live in a community governed by an HOA or condo association in North Carolina, here are some steps you might take to prepare for HB 444’s transparency requirements (or to push for them):
- Ask your Board / Management Company when their fiscal year ends — so you know when to expect the annual financial statement.
- Request the annual income/expense statement as soon as it’s due — verify that you get it, at no cost.
- Review the financials carefully — check for unexpected fees, unusual “miscellaneous” expenses, reserve fund health, and consistency with previous years.
- If something seems off — call for a deeper review or audit, perhaps by bringing it up at the next annual meeting.
- Use your right to inspect and copy management contracts — especially if you want to see who the HOA is paying, for what services, and under what terms.
- Encourage other owners to stay engaged — transparency only works if multiple homeowners pay attention. Mobilizing neighbors can help ensure fair governance.
Final Thoughts: Transparency Is a Foundation, Not a Guarantee
The financial transparency provisions in HB 444 represent a significant shift — and a potentially positive one — for HOA governance in North Carolina. By mandating annual financial disclosure and opening management contracts to homeowner inspection, the bill offers tools to promote accountability, trust, and owner empowerment.
But transparency alone does not guarantee good outcomes. Without engaged homeowners, active oversight, and responsible boards or managers, even the best-crafted laws may fall short.
For many communities — especially smaller or more informal ones like those in rural towns or coastal counties — HB 444 could be a welcome push toward clarity and fairness. But whether it becomes a meaningful improvement depends on how committed residents are to using the tools it provides.