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South Carolina finally delivers an HOA law!

The new HOA law may fall far short of what homeowners need, but it does signal that the state recognizes that some of its estimated 1.2 million homeowners living in planned communities are not on friendly terms with their state’s 6,000-plus HOAs.

After a decade of ignoring homeowner association issues, the South Carolina General Assembly has approved an HOA bill, and Governor Henry McMaster quietly signed the bill into law on May 19. 
 
Change The Board hopes the new bill will give lawmakers a framework on which to attach other much-needed HOA provisions in the future. 

Provisions of the new HOA law
Below is a summary of major provisions of the new HOA law, temporarily labeled H.3886: 
  • Most important: The Department of Consumer Affairs (SCDCA) will accept and record relevant complaints submitted by homeowners and HOAs, compile a report of complaints, and submit the report to the General Assembly and the Governor annually. See How to File a Complaint, below.

    While the department does not serve as an arbitrator in disputes between homeowners and HOAs, they do engage in a voluntary mediation process in hopes of resolving a complaint. 
  • To be enforceable, an HOA’s governing documents must be officially recorded, for example, in the register of deeds office in the county where the property is located, and the documents must be accessible to homeowners.
     
  • HOAs must give notice to its homeowners before adopting annual budget increases. 
     
  • The new law gives magistrates jurisdiction over certain monetary disputes (those of only a few thousand dollars).
     
  • The SCDCA will establish an Internet site providing HOA-related information and educational materials for use by both homeowners and HOAs. 
     
  • Property owners must provide a detailed disclosure statement to prospective buyers of their property.
The law may fall far short of what homeowners need, but it does signal that the state recognizes that some of its estimated 1.2 million homeowners living in planned communities are not on friendly terms with their state’s 6,000-plus HOAs. Read the full text of H.3886
 
The law distinguishes between existing HOAs incorporated in accordance with the South Carolina Nonprofit Corporation Act and HOAs that will be established in the future. Therefore, the old law and the new might best be read together. Read the state’s Nonprofit Corporation Act.

How to respond to the new HOA law?
Easy answer. Report every serious breach of HOA trust to the SCDCA. “Serious” breaches include, for example, an egregious violation of a community’s governing documents, missing HOA funds, a burdensome breach of an HOA’s fiduciary responsibilities, and the like. 
 
How to file your complaint
 
1. Complete required HOA supplemental form
Supplemental Homeowners Association Questionnaire 

2a. Submit claim online
Online Complaint System

-or-
2b. Submit claim via US Postal
Download and print SCDCA Complaint Form
Mail to:

South Carolina Department of Consumer Affairs
Attn: Consumer Services
PO Box 5757
Columbia, SC  29250-5757

 
Contact information
 
Website: Consumer Affairs Home
Phone: 803-734-4200
Toll-free in South Carolina: 1-800-922-1594

Email: scdca@scconsumer.gov 

Enjoy your summer, and let us watch to see if a rash of HOA bills appears at the beginning of the legislature’s 2019 session. There is more to be done.
 
—The staff at ChangetheBoard.Org
 
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