Contributed by Ken Skelly
CAI Volunteer Leader, At-Large Delegate to the SC Legislative Action Committee
This bill, H. 3886, goes to the floor of the Senate on Tuesday, April 25. Therefore, we ask your immediate help. Your assistance is needed and appreciated. If you have any questions please feel free to ask. Below is an outline of the points we need addressed. Please contact your State Senator and ask his or her support to ensure these amendments are incorporated into the Bill on the floor of the Senate.
If they are not, it would better serve our Community if this Bill were defeated as it grows government and in our opinion is an unnecessary intrusion into the operations of community associations across the State of SC. At a minimum, the amendments below need to be part of the Bill if it must go forward.
Recommended changes to Bill H.3886:
1. Section 27-30-120
a. We request that the recommendations for changes to definitions in the Bill made by Ryan McCabe of McCabe, Trotter & Beverly be included in the amendments.
b. We request that Section 27-30-120 (d) be amended to delete rules and regulations from the definition of “Governing Documents”.
c. The governing documents of a homeowner’s association in South Carolina are the Declarations, Restrictive Covenants, Bylaws and, if applicable, Master Deed or Master Lease. These documents create the association, establish its governance system and can be changed only by a vote of the membership.
d. Rules and Regulations are adopted by the Board of Directors as part of the administration of the association and are revised from time to time by vote of the Board as changing circumstances warrant. Due to the need to change the Rules and regulations on a more frequent basis it will be costly and impractical to record every rule change in the county land records. In the alternative “Rules and Regulations of a Community Association should be consciously posted on the community’s Website or Facebook page or Community Bulletin Board.”
e. The amendment to Section 27-50-40(A) of the 1976 Code included in H.3886 to add a statement of whether a property is subject to governance of a homeowner’s association to the seller of real estate’s disclosure statement will effectively put a prospective purchaser on notice that the subject property has a homeowner’s association and the purchaser is more likely to obtain a copy of the related rules and regulations by request to the Seller or association than by searching the county clerk of court’s records.
f. Requiring a homeowner’s association to record its rules and regulations every time they are changed by the Board is an unnecessary burden, adds to the association’s operating costs and does little to inform the purchaser.
2. Section 27-30-130
a. We request that Section 27-30-130 be amended to delete “A declaration or other governing documents” and insert in its place “Declarations, Restrictive Covenants, Bylaws and, if applicable, Master Deed or Master Lease. Rules and Regulations must be posted on the Community Associations website or face book page or on a community bulletin board.”
3. Section 27-30-140
a. There was a good deal of confusion and conflicting discussion relating to notice requirements for meetings to increase association annual budgets. Homeowner associations typically have two categories of meeting: (i) meetings of the members, usually just an annual meeting, and (ii) meetings of the Board of Directors.
b. From a financial standpoint, there are two important meetings: (i) to set the annual budget, and (ii) to set the annual assessment (dues) for each household or lot. These actions may be taken at the same or separate meetings, but are always taken by the Board of Directors and not by the members. Board meetings usually occur on a regular monthly or quarterly schedule without advance notice to members.
c. Members typically don’t have much interest in the annual budget of the association, but are keenly interested in the amount of their annual assessment. If the real intent of this Section of the Bill is to provide advance notice to members before significant increases in assessments are adopted, then we recommend this Section be amended to read:
i. A homeowners association shall provide notice to homeowners of any meeting of its Board of Directors at which the Board may take action to increase the annual assessment to homeowners by more than 15% at least forty-eight hours in advance of such meeting. Notice may be accomplished through posting notice in a conspicuous place in a common area in the community, on an internet website maintained by the homeowner’s association, by electronic mail or by such other method as the Board of Directors may elect.
4. Section 27-30-330
a. We reiterate our recommendation that Section 27-30-330(B) be amended to include the following qualifications for the ombudsman:
- i. be an attorney licensed to practice in this State and in good standing in this State;
- ii. have at least five years of experience in the practice of law in this State;
- iii. have experience in homeowner association law;
- iv. be a certified civil mediator;
- v. not engage in any other business or profession that conflicts with the powers and duties of the position or the office; and
- vi. satisfy any additional criteria established by the director.
Homeowner, Barefoot Resort & Golf (ClearWater Bay) and Member,
CAI South Carolina Legislative Action Committee