How do I handle a closed bank account that stopped HOA payments after a death? – North Carolina

Short Answer

In North Carolina, when a parent dies and an HOA payment stops because a bank account was closed, the immediate goal is to keep the HOA from adding late fees or recording a lien while the estate is opened. If there is no authorized personal representative yet, a family member typically pays the HOA as a temporary protective step and keeps clear records so the estate can reimburse that person later. Once a personal representative qualifies with the Clerk of Superior Court, the personal representative can open an estate bank account and then pay ongoing HOA charges and any verified past-due amounts as an estate expense.

Understanding the Problem

In North Carolina probate, the key issue is who has authority to make and document payments for a decedent’s property when automatic payments stop after death. When the decedent’s bank account closes and an HOA assessment goes unpaid, the HOA may treat the account as delinquent even though the family plans to sell the townhome through the estate. The decision point is whether a personal representative has qualified (or needs to qualify) so that someone can lawfully manage the decedent’s money, pay property-related bills, and keep the townhome marketable for sale.

Apply the Law

North Carolina treats HOA assessments as obligations tied to the property and, depending on the type of community and the governing documents, the association may be able to record a lien for unpaid assessments and pursue collection. In a probate administration, a duly appointed personal representative (administrator in an intestate estate) is the person who collects estate assets, opens an estate account, pays valid expenses and claims, and reports to the Clerk of Superior Court. Until someone qualifies, there is often no one with legal authority to access the decedent’s bank funds, which is why keeping property charges current can require a temporary out-of-pocket payment that is later documented and addressed in the estate accounting.

Key Requirements

Keep the property “current” while authority is pending: Prevent avoidable late fees, collection actions, or title issues by addressing HOA dues quickly, even if the estate has not yet opened an estate checking account.
Use the right payer with the right authority: After qualification, the personal representative should pay ongoing HOA charges from an estate account rather than from personal funds when possible.
Document and classify the payment correctly: Track what was paid, when, and why (for example, to preserve and protect estate property) so it can be handled properly in the inventory/accounting and, if appropriate, reimbursed by the estate.

What the Statutes Say

N.C. Gen. Stat. § 47A-22 (Liens for unpaid common expenses) – Allows a condominium association to record a lien for unpaid common expense assessments that remain unpaid for 30 days or longer, and provides rules on priority and foreclosure.
N.C. Gen. Stat. § 29-13 (Intestate property passes subject to claims) – States that an intestate estate passes to heirs subject to administration costs and other lawful claims against the estate.

Analysis

Apply the Rule to the Facts: Here, the HOA payment stopped because the decedent’s bank account was closed. Because all heirs want to sell the townhome, keeping the HOA account current matters to prevent collection activity or a recorded lien that can complicate a sale. Since full administration is required and the client must file an inventory, the cleanest long-term fix is to qualify an administrator, open an estate checking account promptly after qualification, and then pay the HOA from the estate account going forward while carefully documenting any pre-qualification out-of-pocket payments that protected the property.

Process & Timing

Who files: A qualified heir (often one sibling) petitions to be appointed as administrator. Where: The Clerk of Superior Court (Estates Division) in the North Carolina county where the decedent resided at death. What: The standard AOC estate-opening forms used to apply for Letters of Administration and to start estate administration (the specific form numbers can vary by situation and county practice). When: As soon as possible after death, especially when a property bill like HOA dues is accruing.
Open an estate account and stabilize bills: After the Clerk issues Letters, the administrator typically opens an estate checking account right away using the Letters and an estate tax ID number (not the decedent’s Social Security number). Then the administrator shifts property bills (HOA dues, insurance, utilities needed to preserve the property) to payment from the estate account.
Catch up and document: The administrator requests an HOA ledger showing the past-due amount, late fees, and any collection costs, pays amounts the estate agrees are owed, and keeps receipts. The administrator then reports assets and payments in the required inventory and later accounting(s) with the Clerk, including support for any reimbursement requests for necessary pre-qualification payments that protected estate property.

Exceptions & Pitfalls

Not all HOAs are governed by the same statute: Condominiums have a specific lien statute; planned communities may have different lien rules depending on how the community is set up and what the recorded declaration allows. The HOA’s ledger and recorded documents matter.
Paying from the wrong account creates confusion: Mixing personal funds and estate funds can create disputes among heirs. When a family member pays temporarily, clear records (copy of invoice, proof of payment, reason for payment) reduce conflict later.
Sale timing and title issues: A delinquent HOA account or recorded lien can delay a closing. Keeping dues current and getting a payoff statement early helps avoid last-minute surprises.
Inventory/accounting deadlines: After qualification, North Carolina requires filings with the Clerk (inventory and later annual/final accounts). Missing deadlines can trigger clerk notices and slow the administration, which can also delay the sale.

Conclusion

In North Carolina, the practical way to handle HOA payments that stopped after a death is to prevent delinquency while the estate is opened, then transition payments to the estate once an administrator qualifies. A family member may pay temporarily to protect the property, but the administrator should open an estate checking account promptly after receiving Letters and then pay ongoing HOA dues from that account while documenting prior payments for the estate records. If a condominium assessment stays unpaid for 30 days, a lien may be recorded, so the next step is to file to open the estate with the Clerk of Superior Court as soon as possible.

Talk to a Probate Attorney

If a parent died without a will and an HOA payment stopped because a bank account was closed, a probate administration often needs quick steps to protect the property and keep a sale on track. Our firm has experienced attorneys who can help explain the process, prepare the filings, and map out the timelines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.