On May 17th, 2018, South Carolina Governor Henry McMaster signed into law the South Carolina Homeowners Association Act (SCHAA), South Carolina Code Section 27-30-110. This is the first time there has been significant legislation regulating various aspects of HOA governance and administration. The new Act requires HOAs to be more transparent, gives homeowners a new way to report complaints and problems with their HOAs, gives homeowners knowledge, educational and reference materials about HOAs on The South Carolina Department of Consumer affairs website, and allows magistrates to hear cases involving HOAs where the amount in dispute does not exceed $7,500.00. The pertinent bullet points of the Act are as follows:
- In order to be enforceable, all governing documents for the HOA must be recorded in the public records of the county where the property is located. To continue to be enforceable, HOA governing documents not recorded prior to May 17th, 2018, must be recorded by January 10th, 2019. “Governing Documents” means declarations, master deeds, bylaws or any amendments to the declarations, master deeds, or bylaws.
- Rules, regulations, and amendments to rules and regulations are effective upon passage and adoption but also must be recorded in the public records in the county of the property is located by January 10th of the year following their adoption and amendment. These rules and regulations must be made available to each homeowner upon request unless these rules and regulations are posted in a conspicuous place in a common area in the community or available on a website maintained by the homeowners association where they may be downloaded by the homeowner.
- Magistrates Courts are given jurisdiction to adjudicate monetary disputes with an HOA up to the Magistrate Court limit of $7,500.00.
- The South Carolina Department of Consumer affairs is authorized on its website to include information for homeowners and HOAs concerning how they may contact the Department on its toll free number or submit complaint forms, information concerning the governance of HOAs as provided in this Act, and other provisions of the South Carolina Code of Laws and educational and reference materials about HOAs, including general information about the roles, rights, responsibilities of the board, declarant, homeowners, and other parties.
- The Department of Consumer Affairs is required to receive and record data from all calls and written complaints from homeowners and HOAs that it receives. The Department is required to gather information on every complaint and to provide a copy of each complaint to the HOA or homeowner.
- By January 31 of each year, the Department is required to provide a report of the data collected and complaints received to the Governor to the General Assembly and to the Public through The South Carolina Department of Consumer Affair’s website.
- In addition to The South Carolina Homeowners Association Act, Section 27-50-40(A) of the South Carolina Code has been amended to require sellers who are seeking to sell their property to disclose on the South Carolina Residential Disclosure Form that the property is governed by a Homeowners’ Association.
There are several areas to like about this new Law.
The HOA is required to maintain full transparency with their rules, regulations, governing documents, which is always prudent; sunlight is the best disinfectant.
Recording these documents will not allow the HOA to make up the rules and change the rules at their whim and as they go. The South Carolina Department of Consumer Affairs now has educational and helpful information on their website about the roles, duties and responsibilities of HOAs that will be very beneficial to the Homeowner; knowledge is power.
Money disputes of up to $7,500.00 can now be litigated in Magistrates Court which normally do not require an attorney as they are set up for non-attorneys to navigate and can be litigated cheaply by the homeowner for only a minimal amount of costs.
Complaints are now compiled by The South Carolina Department of Consumer Affairs and published on their website and given yearly to the Governor and Legislature, likely cutting down on HOA abuse as most HOAs do not want to show up regularly on The South Carolina Department of Consumer Affairs website nor do they want to be on that list given to the Governor and Legislature each year.
This new Act is a great first step in the right direction in regulating HOAs and curbing abuse and wrongful acts. As complaints come in to the SC Department of Consumer affairs, the Legislature will presumably continue to amend and expand this act to better protect homeowners against unfair and egregious HOAs. The Act also gives more rights to the Homeowner and will provide easier and better avenues for redress.
Published by Allen Beverly on April 26, 2019.