This week’s column was written by my law partner Cynthia Jones, who is licensed to practice law in North and South Carolina.
Q: I live in a planned community in South Carolina that has deed restrictions. The restrictive covenants say nothing about homeowners’ association (HOA) assessments, and have no provisions that allow for the restrictions to be amended. Is it legal for my homeowners’ association to amend the covenants to impose mandatory HOA assessments or fines on all the owners?
A: South Carolina is very different than North Carolina with regard to laws governing planned communities and HOAs. While North Carolina has a body of law for planned communities known as the North Carolina Planned Community Act (Chapter 47F), South Carolina does not. There are statutes that address condominiums (known as “horizontal property regimes” in South Carolina), but none that deal with single-family or townhome communities. Because of this lack of applicable legislation in South Carolina, the governing documents for an HOA—typically, a declaration of restrictive covenants, along with the HOA’s bylaws and articles of incorporation—control the rights and obligations of the HOA and the owners. If the documents are silent on a matter, such as the authority to levy fines or assessments, it is not permissible for an HOA to fine owners for covenant violations or levy assessments in the absence of an amendment to the restrictions that grants the HOA that authority. If the restrictive covenants do not contain a specific procedure for amending (in those that do, typically between 67 and 90 percent owner approval is required), any amendment will require the approval of 100 percent of the owners to be enforceable. Furthermore, if a homeowner brings a judicial challenge to an amendment, courts sometimes do not look kindly on amendments that add new provisions that were not in the original restrictions.
For the past few years, the South Carolina legislature has considered enacting planned-community legislation similar to what exists in North Carolina, but thus far no bills have been passed. Having some legislation would, I believe, bring clarity and guidance to issues that often aren’t addressed in a community’s governing documents. Until the South Carolina legislature adopts a planned-community act, however, the community’s governing documents will be the primary source of authority.
This column was originally published in the Charlotte Observer on December 2, 2016. © All rights reserved.