Bill > H5204

This bill aims to enhance regulations and oversight of Homeowners Associations (HOAs) in South Carolina to better protect and benefit homeowners. It introduces new definitions for terms like "Board," "Capital upgrade," "Covenants" (also known as CC&Rs, which are legally binding restrictions attached to property deeds), "Declarant," "Declaration" (the document creating the HOA), "Governing documents," "Homeowner," "Homeowners association" (HOA), "Homeowners association management company," "HOA Seller Certification" (a document confirming a member's compliance with HOA rules and payments), "HOA Seller Packet" (a comprehensive disclosure package for potential buyers), "Member," "Organizational documents," and "Rule." The bill establishes the Department of Consumer Affairs as the enforcement agency for HOA laws, granting it the power to fine board members and property managers for violations. HOAs will be required to be incorporated and registered in South Carolina and carry directors and officers insurance. A new annual fee of three dollars per unit will be collected from HOAs to fund the department's enforcement activities. The bill also outlines a detailed process for homeowners to file complaints against their HOA boards, including mandatory board meetings to address grievances, investigations by the Department of Consumer Affairs, and potential penalties such as removal of board members for repeated violations. Furthermore, it mandates that HOAs provide members with a free, accessible list of all members, outlines procedures for handling fines and debts, sets minimum debt thresholds for foreclosure, and requires specific notice periods and mediation before foreclosure. The bill also addresses election procedures, board member conduct, the use of association funds, and the transparency of HOA records, requiring them to be accessible online and in plain language. It also introduces requirements for reserve studies and fully funded reserve accounts for HOAs, and clarifies the process for budget ratification and special assessments, with increased member approval needed for significant capital upgrades. Finally, the bill specifies that association attorneys represent the membership as a whole and are mandatory reporters of illegal board actions, and it sets requirements for dissolving an association and for developer responsibilities before the first home is sold.

Business and Industry

https://www.scstatehouse.gov/billsearch.php?billnumbers=5204&session=126&summary=B