§ 47F-3-112. Conveyance or encumbrance of common elements. - North Carolina Statutes

§47F‑3‑112.  Conveyance or encumbrance of common elements.

(a)        Portions of thecommon elements may be conveyed or subjected to a security interest by theassociation if persons entitled to cast at least eighty percent (80%) of thevotes in the association, or any larger percentage the declaration specifies,agree in writing to that action; provided that all the owners of lots to whichany limited common element is allocated shall agree in order to convey thatlimited common element or subject it to a security interest. The declarationmay specify a smaller percentage only if all the lots are restrictedexclusively to nonresidential uses. Distribution of proceeds of the sale of alimited common element shall be as provided by agreement between the lot ownersto which it is allocated and the association. Proceeds of the sale or financingof a common element (other than a limited common element) shall be an asset ofthe association.

(b)        The association, onbehalf of the lot owners, may contract to convey common elements or subjectthem to a security interest, but the contract is not enforceable against theassociation until approved pursuant to subsection (a) of this section.Thereafter, the association has all powers necessary and appropriate to effectthe conveyance or encumbrance, free and clear of any interest of any lot owneror the association in or to the common element conveyed or encumbered,including the power to execute deeds or other instruments.

(c)        Any purportedconveyance, encumbrance, or other voluntary transfer of common elements, unlessmade pursuant to this section is void.

(d)        No conveyance orencumbrance of common elements pursuant to this section may deprive any lot ofits rights of access and support. (1998‑199, s. 1.)