“When Parking Becomes Predation: How HOAs and Tow Companies Weaponize False Claims in North Carolina”
By John Lee – Investigative Team
In North Carolina, a quiet but pernicious abuse is unfolding in many homeowners associations (HOAs): the use of unlawful towing based on knowingly false claims. As the documents reviewed in Greensboro reveal, some HOA boards and tow operators collude to remove cars by asserting “no tags” or “fraudulent tags”—even when DMV records confirm the vehicles were legally registered. The result: residents pay for tows they never merited, with scant government oversight and little recourse.
1. The Rise of Unlawful Towing in NC HOA Communities
Many HOAs claim the power to tow vehicles from private parking areas, guest lots, or private-access roads. Some do so under the guise of enforcing parking rules. But the line between enforcement and extortion is thin.
In North Carolina, HOA authority to tow is not uniformly governed or restricted by statute. State-level laws do not comprehensively regulate HOA towing practices. (For example, Ask a Manager notes that “North Carolina’s HOA laws do not address [towing] specifically.”) HOAs often rely on their Declaration of Covenants, Conditions & Restrictions (CC&Rs) to authorize towing. But many such documents are vague or give sweeping authority without oversight. Legal commentators caution that to tow without proper procedure—or based on false representations—is a legal risk. Some forums advise that if the HOA wants to tow without notice, it must amend the covenant, and unilateral towing of vehicles that actually comply with sticker or registration rules is improper. Even in jurisdictions with municipal towing ordinances, such as Charlotte, local rules may impose time-of-day restrictions or signage requirements. A glaring gap: no statewide NC statute directly regulates or limits HOA-initiated tows, especially those based on false or misleading claims.
In short: many HOAs operate in legal gray zones. Absent strong contractual controls, they can push boundaries—sometimes illegally.
2. How Common Are False-Claim Tows in HOA Settings? Estimating the Scope
It is difficult to find published statistics that specifically measure how many HOA-initiated tows rely on knowingly false information (i.e., “no tags” or “fraudulent tags” when DMV records say otherwise). However, several lines of evidence suggest the problem may not be rare:
The case from Greensboro shows repeat tow requests for the same vehicle, over multiple days, all based on the same false assertion, while DMV registration records validate the tag. This pattern strongly suggests intentional misuse of “fraudulent tag” claims. In the commercial / crash-towing context, a well-regarded industry study by ATRI (American Transportation Research Institute) found that about 29.8% of crash-related tow invoices included some form of predatory billing or unjustified charges. While this is a different domain (heavy-duty towing after accidents), it demonstrates that nearly one in three towing actions may involve questionable justification or overreach.
The ATRI report also indicates that excessive rates or unwarranted additional charges are encountered by 82.7% and 81.8% of motor carriers, respectively, in their tows.
Because HOA tows are typically smaller-scale, less documented, and more dispersed, they evade visibility and formal study. However, anecdotal reporting and consumer complaint sites suggest frequent incidents of towing over sticker errors, guest parking, or alleged violations when none exist. (See news items about HOA towing complaints in North Carolina communities.) Legislative attention is emerging: a towing reform bill in the North Carolina legislature would require towing businesses to be permitted, subject to oversight, and regulated—a sign that lawmakers acknowledge potential widespread abuse.
Given the evidence, a conservative estimate is that a meaningful minority of HOA-initiated tows rely on knowingly false or misleading claims. Whether the true rate is 5%, 10%, or higher remains to be studied—but the Greensboro case suggests the problem is real and deliberate, not accidental.
3. Why This Practice Persists: Oversight Gaps and Regulatory Inertia
The persistence of unlawful towing in HOAs owes a great deal to structural and legislative voids. Here are key factors:
a) Fragmented Legal Oversight
North Carolina’s Chapter 20, Article 7A/B (Motor Vehicle Towing statutes) includes rules about notification and limits for private lot tows—but these often apply to commercial or public-facing lots, not necessarily HOA-controlled private lots. For example, G.S. 20-219.11 mandates that when a vehicle with a valid registration plate is towed under certain statutes, the authorizing person must notify the owner within 24 hours. G.S. 20-219.20 requires tow companies to notify local law enforcement prior to moving a vehicle (unless public-safety urgency overrides). Violating that is an infraction (up to $100). But these requirements do not fully address HTA (HOA-to-tow) abuses, particularly when tows are initiated privately and claims are false. Many HOA lots are exempt or skirted. The state statutes also provide a limited shield: under G.S. 20-219.2, towers may not be held liable for damages from a properly done private-lot tow—not unless there is intentional or negligent damage. Importantly, the statute only applies in certain NC counties and municipalities (Craven, Cumberland, Forsyth, Guilford, Mecklenburg, etc.). Local municipalities can adopt towing ordinances, but these vary greatly—and few focus on HOA-initiated tows or false-claim prevention.
b) Inadequate HOA-Specific Regulation
HOA governance and parking enforcement are largely left to contractual and private arrangements (CC&Rs, bylaws). There is little state-level statutory oversight of how HOAs enforce parking rules or contract for towing. Some online HOA-legal resources highlight that HOA boards should carry indemnification clauses with tow companies and clearly define rules, but these are best practices—not requirements. Courts and small claims judges are often reluctant to impose heavy liability on towing companies or HOAs over minor disputes. Even when a tow is obviously wrongful, the cost/benefit of litigation discourages many homeowners from pursuing cases. (Analogous accounts from other states, like Florida, show skepticism from small claims courts regarding towing liability for small sums.) Because HOA-initiated tows often affect only individual residents in specific communities, isolated wrongful-tow cases rarely attract legislative or regulatory attention.
c) Lack of Data Transparency
There is no centralized registry or reporting requirement for HOA tow actions in most NC localities. Without mandated disclosure, pattern abuses remain hidden. Few homeowners keep records; many pay the tow fee under duress rather than contest. Because HOA tows often avoid public roads or municipal impound lots, law enforcement oversight tends not to catch them.
Thus, even in cases of blatant misconduct, only savvy residents with documentation are likely to challenge them—and succeeding is hard without structural protections.
4. Liability of Tow Companies That Facilitate False-Claim Tows
When towing companies accept and execute a tow request based on false information, they expose themselves and possibly their HOA clients to serious legal risk. Here’s how liability may arise:
i. Contractual and Tort Liability
If a tow is performed based on false representation (e.g., “fraudulent tag”), the company may be liable for conversion or wrongful taking—i.e., wrongful deprivation of personal property. The tow operator cannot hide behind a claim of merely following orders if they had reason to know the claim was false, especially if they had access to DMV data confirming valid registration. In tow-company contracts with HOAs, the HOA often holds the tow company harmless or indemnifies it—but that doesn’t shield the tow company from third-party claims if it acted outside legal bounds.
ii. Statutory Violations and Consumer Protection Law
In North Carolina, misuse of DMV or registration data may violate privacy or motor vehicle data statutes (or federal law, e.g., the Driver’s Privacy Protection Act, 18 U.S.C. § 2721). If a tow is effected through fraudulent claims, it may constitute an unfair or deceptive practice under N.C.’s Unfair and Deceptive Trade Practices Act (UDTPA, N.C.G.S. § 75-1.1), especially when a resident is forced to pay for an undeserved service. Under state towing statutes, failure to comply with notification, signage, or other statutory requirements may incur infractions or civil penalties (though these are modest).
iii. Negligence and Damage Claims
If a tow crew damages the vehicle during the process, they already may be held liable for negligence under the statute (which reserves damages for intentional or negligent damage). More fundamentally, when a tow is unjustified, every minute the car remains inaccessible (storage fees, loss of use, emotional distress) is potential damages the resident could claim.
iv. Reputational and Contractual Risk
Tow companies that develop a reputation for aggressive or wrongful towing may face contract termination, HOA pushback, or resistance in future bidding. They may also face class-action exposure if patterns of false-claim tows emerge in communities across a region.
Despite these risks, many tow firms operate assuming that residents won’t sue due to inconvenience, small dollar amounts, or legal uncertainty. That’s why regulation and enforcement lag.
Why the Greensboro Example Matters
The case in Greensboro is a microcosm of how power, data access, and weak oversight combine:
HOA agents repeatedly triggered tows based on false claims—“fraudulent tag”—against a legally registered vehicle. The tow operator’s system knew the make, model, VIN, and plate (i.e. the details derived from DMV or equivalent lookups). Tows were repeated on multiple days, despite no grounds. The resident faced repeated costs and hassle, likely intimidated into compliance. No government authority prevented it at the time, and recourse is difficult.
If one HOA community can do this, many others can be doing the same under the radar.
A Roadmap for Reform
To stem this predatory practice, several reforms are urgently needed:
State-Level Towing Commission & Permit System The NC reform bill already filed would require towing businesses to be licensed or permitted and subject to oversight. A statewide commission could require annual reporting of tow incidents, reasons, and disputes. It could also set maximum allowable fees or at least ranges, uniform signage, and response standards. Mandatory Disclosure & Audit Trails HOA-to-tow requests should require written justification, with interface logs, timestamps, and any license-plate lookups preserved. Dispute mechanisms should be built in—for example, a local hearing before a neutral third party before towing. Heightened Liability for False Claims Amend statutes to make false tow requests an actionable offense, with statutory damages (e.g. double towing/ storage fees) and attorney-fee recoveries. Class-action standing or aggregated complaint mechanisms should be allowed for repeated abuses. Restrictions on Data Misuse Tighten regulation of how towing companies and HOAs can access DMV tag data. Misuse (pulling tags to confirm then claiming false) should be explicitly prohibited or penalized. Education & Transparency in HOAs HOAs must be required to publish parking enforcement policies transparently, including notice periods, appeal rights, and towing criteria. Contracts with towing firms should require indemnification for wrongful tows and routine audits. Resident oversight committees or independent review boards should have the power to challenge tow decisions. Strengthening Local Ordinances Cities and counties should adopt uniform towing regulations that explicitly govern HOA-initiated tows, particularly in residential neighborhoods. Local authorities should enforce signage, pre-notification, and reporting requirements.
Conclusion
Unlawful towing in North Carolina’s HOA communities is not a hors d’oeuvre in a broader debate—it is a fundamental consumer rights issue. When private associations can invoke the coercive power of tow trucks based on false claims, residents lose far more than money: they lose dignity and agency. The Greensboro case offers concrete, damning evidence of this abuse in action.
In the absence of strong oversight or statutory guardrails, the scales are tilted against residents. The only question now is whether legislature, regulators, or courts will intervene to restore fairness—or continue to allow parking predation under private guise.
Greensboro Chronicle 