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Proposals would change HOA rules along Grand Strand
Jessica Foster
Posted on Sat, Mar. 28, 2009
The SUN NEWS
Homeowners associations on the Grand Strand could face more rules if any of five bills proposed to regulate the groups pass in the statehouse this year. The bill gaining the most attention is Senate Bill 30, which was discussed in a subcommittee Thursday and is scheduled to be revisited next week. That bill would create the S.C. Homeowners' Association Act, requiring associations to make their financial records for the past three years available to members, limiting annual increases on assessments and allowing the S.C. Department of Consumer Affairs to mediate disputes, among other things. It would also require associations to register with the Department of Consumer Affairs, the address and owner of each unit or lot in the development and paying a $10 registration fee for each.
Some groups - such as the S.C. Association of Realtors and the state chapter of the nonprofit Community Associations Institute - say the bill should be revised, especially the part requiring the $10 per unit fee. "We support the premise of homeowners having an ability to address concerns from dealing with out-of-control homeowner boards, but Senate Bill 30 doesn't begin to do that," said Nick Kremydas, executive director of the S.C. Association of Realtors. "The fees involved would generate millions of dollars for our consumer affairs department. It seems like it creates another layer of government agency."
In addition, the 20 percent cap on annual assessment increases is a point of contention with the Community Associations Institute, which said in a statement that "the boards of directors are charged with protecting the assets for all owners and with a recessed economy and rising gasoline, insurance and other costs, they would be unable to do so with fixed limitations."
Homeowners' associations have been a source of much discord on the Grand Strand, with opponents saying they have too much control and supporters pointing out that they help maintain the value of their neighborhoods. Still, many homeowners agree there should be more regulation.
"I'm sure some homeowners would paint their houses pink and park on the lawn if you didn't have them. There's some good to them," said Helene LaCaille, a local real estate broker who owns six homes. It concerns her, however, that builders can have control of an association's board and
can raise fees at their discretion. "We're held captive and we have to pay those homeowners fees. Who's working to lower the costs? Nobody cares about lowering the costs more than the individual owner," she said.
The S.C. chapter of the Community Associations Institute is tracking five bills it says would change the way associations do business. Here's the group's summary of the bills:
House Bill 3407 | Provides for assessments for emergency expenditures and improvements to a common area or facility.
Senate Bill 30 | Creates a South Carolina Homeowners' Association Act.
Senate Bill 105 | Requires developers to establish reserve funds to be held in escrow.
Senate Bill 215 | Requires that earnest funds be deposited in a special escrow account and provides a way for owners to merge properties with appropriate compensation.
Senate Bill 277 | Ensures certain liens obtained by a homeowners association against real property are superior to claims of other creditors.
Bill of Rights for Homeowners (AARP)
I. The Right to Security against Foreclosure
An association shall not foreclose against a homeowner except for significant unpaid assessments, and any such foreclosure shall require judicial review to ensure fairness.
II. The Right to Resolve Disputes without Litigation
Homeowners and associations will have available alternative dispute resolution (ADR), although both parties preserve the right to litigate.
III. The Right to Fairness in Litigation
Where there is litigation between an association and a homeowner, and the homeowner prevails, the association shall pay attorney fees to a reasonable level.
IV. The Right to Be Told of All Rules and Charges
Homeowners shall be told—before buying—of the association’s broad powers, and the association may not exercise any power not clearly disclosed to the homeowner if the power unreasonably interferes with homeownership.
V. The Right to Stability in Rules and Charges
Homeowners shall have rights to vote to create, amend, or terminate deed restrictions and other important documents. Where an association’s directors have power to change operating rules, the homeowners shall have notice and an opportunity, by majority vote, to override new rules and charges.
VI. The Right to Individual Autonomy
Homeowners shall not surrender any essential rights of individual autonomy because they live in a common-interest community. Homeowners shall have the right to peaceful advocacy during elections and other votes as well as use of common areas.
VII. The Right to Oversight of Associations and Directors
Homeowners shall have reasonable access to records and meetings, as well as specified abilities to call special meetings, to obtain oversight of elections and other votes, and to recall directors.
VIII. The Right to Vote and Run for Office
Homeowners shall have well-defined voting rights, including secret ballots, and no director shall have a conflict of interest.
IX. The Right to Reasonable Associations and Directors
Associations, their directors and other agents, shall act reasonably in exercising their power over homeowners.
X. The Right to an Ombudsperson for Homeowners
Homeowners shall have fair interpretation of their rights through the state Office of Ombudsperson for Homeowners. The ombudsperson will enable state oversight where needed, and increases available information for all concerned.