Buying a Home in a South Carolina HOA? Know Your Rights Before You Buy

Finding the right home involves more than choosing the right floor plan, neighborhood and price.

If the property is governed by a homeowners association (HOA), you're also buying into a community with its own governing documents, financial obligations, rules and restrictions.

That isn't necessarily a bad thing. Many homeowners appreciate the services, amenities and standards an HOA can provide. But buyers should understand exactly what they're agreeing to before closing - not after moving in.

Start With the HOA Documents

One of the most important steps a buyer can take is reviewing the HOA's governing documents.

Depending on the association, these may include:

• Declaration or Master Deed

• Bylaws

• Covenants, Conditions & Restrictions (CC&Rs)

• Rules and Regulations

• Amendments

Don't simply obtain the documents and put them in your closing file. Read them.

They may contain restrictions affecting parking, pets, landscaping, exterior improvements, fences, architectural changes and other uses of the property.

Ask yourself a simple question:

Can I comfortably live with these rules?

If the answer is no, it's much better to discover that before you own the property.

Don't Look Only at the Monthly HOA Fee

When buyers ask about an HOA, one of the first questions is usually:

“How much are the dues?”

That's important - but it shouldn't be the last financial question.

Buyers should also ask:

• What do the regular dues cover?

• How often are dues collected?

• When were they last increased?

• Are any major repairs planned?

• Are there current or anticipated special assessments?

• What common areas and amenities is the association responsible for maintaining?

• Does the association maintain reserve funds?

• What are the association's collection, late-fee, fine and lien procedures?

A home that fits comfortably within your budget could look different financially when HOA dues and assessments are added.

Ask About Special Assessments

A special assessment is another potential expense buyers should investigate.

Associations may face significant expenses for repairs or improvements to common property. Depending on the circumstances and governing documents, those expenses may result in additional assessments to homeowners.

Reviewing the association's budget, available reserve information and recent meeting minutes can help buyers identify issues that may be under discussion.

Meeting minutes can be particularly informative. They may show discussions involving upcoming projects, maintenance concerns, assessments or other matters affecting homeowners.

Find Out Whether the Property Has Existing HOA Violations

Another valuable step is asking for written information concerning any outstanding HOA violations affecting the property.

A violation might involve an exterior modification, landscaping, parking, fencing, maintenance or another requirement contained in the association's governing documents.

Don't assume an HOA issue will automatically disappear when the property changes ownership.

Identifying potential problems before closing gives the parties an opportunity to determine how they should be addressed.

South Carolina HOA Rules and Enforceability

South Carolina's Homeowners Association Act contains an important provision concerning HOA governing documents.

Generally, governing documents must be recorded in the appropriate county office to be enforceable, except as otherwise provided by law.

There is also an important distinction involving HOA rules and regulations.

Rules, regulations and amendments become effective when they are passed or adopted. However, under the Act, they must be recorded by January 10 of the year following their adoption or amendment in order to remain enforceable.

This gives homeowners and buyers four useful questions to remember whenever an HOA requirement is raised:

WHERE IS IT WRITTEN?

Ask to see the actual document or rule containing the requirement.

WHEN WAS IT ADOPTED?

If it is a rule or amendment, determine when the association adopted it.

WAS IT RECORDED?

Determine whether the applicable document was recorded with the appropriate county recording office.

IS IT STILL ENFORCEABLE?

If there is a question concerning enforceability, the dates and recording information may be important.

These questions don't determine the legal outcome of an HOA dispute, but they can help identify when additional investigation or legal advice may be appropriate.

Homeowners Have Access to HOA Rules and Regulations

Under the South Carolina Homeowners Association Act, HOA rules, regulations and amendments must be accessible to association members upon request.

Depending upon the HOA's bylaws and method of distribution, documents may be provided electronically or made available through other permitted methods.

So if you're told:

“That's an HOA rule.”

A reasonable next question is:

“May I have a copy of that rule?”

What About HOA Budget Increases?

The South Carolina HOA Act also addresses notice concerning certain annual budget increases.

For associations subject to this particular provision, homeowners generally must receive at least 48 hours' advance notice of the meeting where a decision to increase the annual budget will be made.

The Act provides an exception to this specific requirement for an HOA incorporated under the South Carolina Nonprofit Corporation Act.

This is an example of why HOA questions are not always as simple as looking at one statute.

Not Every South Carolina HOA Is Governed Exactly the Same Way

South Carolina does not have one comprehensive law controlling every aspect of every homeowners association.

Depending on the type and organization of the association, several laws may be relevant, including the:

• South Carolina Homeowners Association Act

• South Carolina Nonprofit Corporation Act

• South Carolina Horizontal Property Act

The association's own recorded governing documents are also extremely important.

When a legal interpretation is necessary, buyers and homeowners should consult a qualified South Carolina attorney.

What If You Have a Problem With Your HOA?

The South Carolina Department of Consumer Affairs provides HOA educational resources and receives HOA-related consumer complaints.

However, Consumer Affairs does not oversee HOAs and does not act as the judge or arbiter in a dispute between a homeowner and an association.

If a problem occurs, homeowners should consider:

1. Putting requests and concerns in writing.

2. Keeping copies of correspondence, notices, violation letters, payment records and governing documents.

3. Reviewing the governing documents for an internal dispute or complaint procedure.

4. Documenting attempts to resolve the issue with the board or management company.

5. Using the Department of Consumer Affairs complaint process when appropriate.

6. Seeking legal advice when a matter involves significant money, liens, property rights or interpretation of governing documents.

Certain monetary HOA disputes may also fall within the jurisdiction of South Carolina Magistrate's Court.

Knowledge Before Closing Can Prevent Surprises After Closing

Buying a home in an HOA community can be a great choice—but buyers should know what they're agreeing to.

Before closing:

Read the documents.

Understand the dues and potential assessments.

Ask about violations.

Review the rules and restrictions.

Ask questions when something isn't clear.

And most importantly, ask yourself:

“Can I comfortably live with these rules, restrictions and costs?”

At Carolina Pines Realty, Inc., we believe real estate professionals should do more than help buyers find a house. We should help buyers understand the questions they need to ask, so they can make informed real estate decisions.

Carolina Pines Realty, Inc.
Your Northeast South Carolina Experts

Contact us today.

This article is provided for general educational and informational purposes only. It is not legal advice. HOA requirements vary by association and property. Buyers and homeowners should review the applicable governing documents and consult a qualified attorney when legal interpretation or advice is needed.