Major changes coming to SC HOA laws in January!
This column was written by my law partner Cynthia Jones, who is licensed to practice in both North and South Carolina.
There have been multiple attempts by the South Carolina Legislature over the years to enact laws concerning planned communities and homeowners’ associations (“HOAs”). Unlike North Carolina, until recently South Carolina had no laws for planned communities other than one pertaining to horizontal properties (condominiums). This year, legislation dealing with planned communities was finally adopted by the South Carolina General Assembly, but it appears to fall short of what would be required to provide adequate protection to both homeowners and HOAs. However, the new legislation does impose a handful of new requirements on HOAs that all HOAs should be aware of.
First, HOAs that are not incorporated as nonprofits must give members at least 48 hours’ notice of a meeting where an increase in the budget will be discussed. In addition, unincorporated associations must provide the same documents to members that nonprofit corporations are required to provide to their members (for example, membership lists, annual budget information, and so on).
Second, the South Carolina Department of Consumer Affairs is now responsible for collecting information on complaints concerning HOAs. The complaints will be shared with the targeted HOAs, and the Department of Consumer Affairs will issue an annual report to the legislature that will also be published on the Department’s website.
Finally, and most importantly, all governing documents for an association (the declaration, master deed, and bylaws) must be recorded in the county where the property is located to be enforceable. All rules and regulations, and any amendments to those rules and regulations, must also be recorded.
The legislation does not specify whether “rules and regulations” include such things as delinquency and violation policies or architectural guidelines. In light of the new law, some attorneys are advising their HOA clients to record any HOA documents that they wish to be enforceable against homeowners. In my opinion, this should include architectural guidelines and violation policies, and any other documents or guidelines an HOA has adopted.
The deadline for recording these documents under the new law is January 10, 2019. If the pertinent governing documents are not recorded by that date, they will not be enforceable. Also note that any documents which are amended or changed in any given year must be recorded by January of the following year to be enforceable. South Carolina HOAs should consult their attorneys to ensure compliance with the new law prior to the January 2019 deadline.
This column was originally published in the Charlotte Observer on August 11, 2018. © All rights reserved.