When will lawmakers care as much for citizens as they do for developers?
A Senate Judiciary Subcommittee will meet next week to address two HOA bills. One bill, H.3886, has already passed by the House. The Senate sponsors the second bill, S.576, still in subcommittee.
Both are placebos. Weak milk-toast!
The meeting on the two bills—it reportedly will allow the public to give testimony—will take place this coming Tuesday, April 18, 9:30 a.m., in the Gressette Building in Columbia.
Your presence at the April 18 meeting of the Judiciary Subcommittee
could make an enormous difference. Please attend the meeting and
tell the senators what you need and why.
For a decade, abused homeowners have sought relief from oppressive and abusive HOAs. Numerous bills have come before the legislature. They reportedly were strongly opposed by heavily funded PACs and the monied construction, real estate, HOA, and mortgage banking industry. As more South Carolinians lost their homes and hard-earned money to their HOAs, the state stood back and fiddled.
This year, pushed by a growing number of abused homeowners, the state finally seems serious about giving us an HOA law. The House and Senate bills generally offer the same provisions, but their details differ slightly. Together, the bills appear as a well-coordinated effort by lawmakers to make the feeble boast, “See, we are going to help homeowners.”
Quite possibly, the two placebos are all that the legislature could support: they are "the art of the possible…”
Click here to read H.3886. Click here to read S.576
Neither bill provides homeowners the protections needed or supported by Change The Board. Our bill, S.106, still resides in the Senate. To date, no hearings or meetings have been announced on this bill.
Provisions of the two bills
Here are highlights of the two bills the senate subcommittee will address next Tuesday. CTB’s comments follow in parentheses.
- Disclosure of an HOA’s governing documents to prospective buyers. (All or most of these documents are already in the public domain in the office of a county register of deeds. Possibly, however, some HOA’s have failed to file their governing documents or failed to present a needed copy to buyers.)
- The right of homeowners to attend a Board of Directors meeting when HOA fees increase or decrease. (The provision does not give homeowners the right ever to speak at a meeting or ever to attend any other Board meetings. In effect, lawmakers propose to carve HOA secrecy and suppression into concrete law!)
- Copies of governing and some financial documents available to homeowners upon request. (Apparently, homeowners still would not be allowed to examine maintenance charges, contracts, insurance policies, and the inventory of common-area properties, or “follow the money” the HOA collects and spends.)
- Online instructional courses in HOA management, rights, and responsibilities of all parties involved. (Such courses could help homeowners understand the need for timely payment of HOA fees to keep their homes free of foreclosure, among other basic responsibilities. Unfortunately, attendance in the courses is optional. A brief, mandatory 15-minute orientation at the time of sale would ensure that all new homeowners understood their responsibilities or knew where to find the answers.)
- Civil jurisdiction of HOA litigation in civil (magistrate) court cases involving claims of less than $7,500. (This provision might be helpful in minor matters, but far too many cases exceed the $7,500 limit.)
- A state ombudsman in the Department of Consumer Affairs to oversee HOA activity and record statistics on reported problems. (This provision could prove helpful. The loophole, however, is the statement that the ombudsman office will be managed “within the limitation of the funds appropriated…”
- Written disclosure of a property’s condition to a prospective buyer. (Buyers do need a fair assessment of a property’s condition and issues before they purchase.)
No doubt, each of these measures would help some homeowners, but they are not enough to stem the HOA mismanagement that occurs in this state. One can almost visualize the fingerprints of builders, bankers, and real estate brokers on each page of the bills.
Please let is know if these bills would resolve harsh management issues in your HOA. Email CTB at ChangeTheBoard@att.net.
Provisions lacking in the bills
Here are the important provisions the placebo bills do not allow:
- A builder’s accountability to owners who are paying their HOA fees to operate and maintain the HOA,
- Open Board of Director meetings to allow homeowners to speak and to see and track governance actions and HOA income and expenditures,
- Minutes of the Board meetings distributed to homeowners, and
- A plan for phasing homeowners onto the Board of Directors from the earlier stages in a community’s development.
The last provision is essential to homeowners. Otherwise, a developer will eventually leave a community and dump homeowners into HOA management positions. Being unfamiliar with the Board’s issues and operations, these homeowners will lack the knowledge and skills for managing complex common-area assets. In larger communities, these assets can include roads, storm water systems, lakes and dams, building maintenance, insurance, contracts, and the like. Nor do the bills give new homeowner-Board members time to identify and negotiate the responsibility for repairs to flawed property transferred to the HOA.
Provisions in S.106
As noted earlier, S.106 is the bill CTB supports. It now resides in the Senate subcommittee. The bill would give owners the oversight of, and insight into, the actions of a developer-controlled Board of Directors. In so doing, the bill would phase elected homeowners onto the Board beginning with the sales and closures of 25 percent of the community’s planned development. At 90 percent of closures, homeowners would hold all Board seats. This bill is not on the agenda for the April 18 meeting, however. Click here to review S.106
This bill would fulfill the tenets of democracy put forth in the Freedom of Information Act in the South Carolina Code of Laws.
The General Assembly finds that it is vital in a democratic society
that public business be performed in an open and public
manner so that citizens shall be advised of the performance of
public officials and of the decisions that are reached in
public activity and in the formulation of public policy.
This principle holds true in any form of governance, public or private.
Think about it
Would a version of S.576 and H.3886 solve HOA problems in the state? No. But if the 576-3886 bill passed, would it begin to showcase the major problems with HOAs? Possibly, but no guarantees. The ombudsman would be charged with keeping statistics on HOA complaints and advising lawmakers on improvements to an HOA law. But funding could be at the whim of the legislature.
If an HOA placebo is enacted, you might have to live with it for the next decade. Your presence, your calm voice at the April 18 meeting of the Judiciary Subcommittee, could make an enormous difference. Just tell the senators what you need and why.
We hope abused homeowners, especially if there are any such homeowners in the Columbia region, will attend the meeting and speak out. You will be back at work before noon, or back home before school is out.