The Cost of an HOA Law in SC

I live is SC and am on my 5th HOA (2nd in SC). I believe there are enough laws to deal with any issues. I see no need for an additional layer/set of laws.

If you watched/read about the open meetings some SC State Reps were having (mainly in the Myrtle Beach area) the main complaints were from those still under Declarant control. Most of the complainers admitted that it was their first association and they had no idea how such things operated. Many complaints centered around promised amenities, road maintenance, and reserve funding.

There were few complainers from owner controlled associations.

of course, one may argue:

I may not be here tomorrow, why should I pay ?

several different versions are still under consideration

the main points are:

mandatory training (self certification) for directors (no more: I did not know, I did my best, etc)

open bod meetings

full disclosure of ALL docs pre sale

requiring adequate reserve funding - freezing reserve funds for intended purpose

universal minimum election procedures

arbitration ombudsman

Anyone remember what happened in Florida? As I understand it they collect $5.00 per condo per year to administer their ombudsman program. Well a few years back the the state was short on cash and looked around and low and behold found a pile in the ombudsman's accounts. Soon the cash was transferred and Florida's budget deficit was reduced.

Kerry

The below link is for the one that has been hung up in committee since 2009. I for one lobby to keep it dead.

I am not sure it is what the latest on the band wagon politicians are calling for.

http://www.scstatehouse.gov/sess118_2009-2010/bills/30.htm

The reason I started this thread was to question the willingness of a 100 unit HOA to pay $1,000 per year for the privilege of having a formal set of rights that may not have been previously formalized. In PA, a 100 unit HOA has to pay $1,000 just to file an amendment to its CC&Rs, regardless pf what the amendment says. And in my HOA's experience, that $1,000 has been an obstacle to making changes because we don't want the added expense.

For anyone who wants to dig into the SC details, JohnC provided a link to SC's proposed legislation.
For anyone who wants to read a newspaper article, Amanda provided a link. But the newspaper article quotes an SC legislator who thinks that any restriction on a person's right to park his boat in his yard is excessive. So I'm not sure if the article demonstrates the need for legislation or the dullness of the legislators - Both arguments have been made here.

As to the details of the proposed legislation, one thing struck me as scary.

The HOA must establish an administrative panel to hear complaints. Members of the board cannot be members of the panel.

It seems somewhat vague how these two bodies are supposed to interact. But what is clear is the need for at least 6 volunteers to fill both sets of seats. And if the HOA wants a 5 member board, 8 volunteers are needed. I did not see any requirement in the Act for the board or the administrative panel to be trained in these responsibilities.

In my HOA, we struggle to find 5 volunteers for our board. I doubt we could find another 3.

But the story doesn't end there.

If a HO is dissatisfied with the HOA's administrative panel, he can appeal to the State's administrative panel. As I understand it, SC's current administrative panel deals with complaints against government agencies, mostly in the areas of employment and social services. So I suppose that the 6 members of SC's administrative panel are going to be immediate wizards on HOA laws. And with this wizardry, they will be able to decide whether the untrained HOA administrative panels acted appropriately.

But the story doesn't end there.

SC's administrative panel is not an arm of the courts. It is an arm of the legislature. But not to worry. A HO who does not like the decision of the administrative panel can file a lawsuit in the courts.

Personally, I don't think I would want my HOA to pay $1,000 per year for the privilege of adding an untrained administrative panel that is accountable to the state's untrained administrative panel that is in fact separate from the state's court system.

Are you saying that there is a proposed Act in the works that does not include a $10 per unit annual registration fee? If so, I withdraw my original question - which per the title of the thread was about the annual registration cost. If not, then you haven't answered the question asked.

Also, if there are Acts under consideration that do not include the use of administrative panel, then I withdraw my second concern. It jumped out at me as I scanned through JohnC's link.

I made no attempt to get into the other details of the Act since as you say there are pros and cons on many issues. I saw the $1,000 fee as an impediment just as I see PA's $1,000 fee an impediment. And that to me is a fair question to ask.

NPS, You must have missed my answer to your original question, I answered it in my first post on this thread. I had said YES I would gladly pay the $10 fee.

Want to see the proposed bill?

http://www.scstatehouse.gov/sess121_2015-2016/spref15/pref15s1.htm

S13 and S18

I looked through both. I saw no mention of the $10 per unit annual fee. S18 contains a watered down version of the adjudicatory panel requirement that was in the prior version. IMO, an HOA adjudicatory panel appears to still be a requirement with even less clarity. There is no mention of the opportunity to appeal to the state's adjudicatory panel - which is probably what the $10 per unit fee was supposed to contribute toward.

That said, it does look like more volunteers may be needed to fill the roster, but there is insufficient information in this proposed Act to figure it out.

I would however like to remind anyone else reading this thread, to keep in mind that many parties feel we do not need HOA laws governing single family homes here in SC.

May I add, that for the most part the ones that are against passing any HOA laws for single family homes here, consist mainly of large lobbyist groups with very deep pockets. These lobbyists have been very successful in their mission to prevent any laws from being passed. They invest much time and money, this makes me think that somehow it must be worth their investment in some other way? I'm sorry but I simply don't feel these lobbyists have the best interest of the people in mind.

The Iowa legislature considered similar legislation.

Lobbyist Declarations for the legislation:

For IA. Attorney General Dept. of Justice
For IA. State Bar Assn.
Against Home Builders Assn. of IA
Against IA. Assn. of Realtors

The legislation was never voted on. Iowa currently has no HOA laws and very minimal condo laws.

That could be said about anyone.

I would agree that list pertains to the most important issues that need attention in South Carolina.

JOND1,
At least in NY your Attny. Generals office has published standards that need to be met concerning HOAs. Your Attny. Generals office has jurisdiction over ownership and maintenance of the HOA common property. w(They have on their website under resource center.) In SC We cannot go the our Attny. Generals office concerning any HOA matter whatsoever. IMO it would be impossible for me to accurately measure the success of these laws in any of the states I don't reside in, as I would need to have access to all the statistics surrounding the matters both before an after their laws took affect (I'm not sure anyone possesses these statistics). I'm curious what your opinion is of lobbyist role in the matter here in SC? You may not have the same problems that JOHNB points out in NY, maybe you have other laws in place that address things better than here in SC? Maybe disclosure of documents to New Buyers isn't a problem in NY for instance?

Anyway here is this state there seems to be a need for something, hopefully the good will outweigh the bad if any thing gets passed.

One of my issues is cheaters cheat. No matter how many "laws" you put in place concerning HOA's is those with larceny in their heart will find a way around them.

One example is I believe "BOD Education" that is mandated in some states is simply a "document" a BOD Member must say they read and sign for such. How many have signed for documents they had no idea what they were all about like HOA Covenants? Heck, maybe the document aided them in being able to cheat better. Talk about feel good legislation. A classic example.

Cheaters cheat.

Amanda despite what you may have read the AG in NY no longer involves themselves once the property has been turned over to the owners from the developer. This from an investigator from the AG's office who spoke at our annual meeting at our invitation.

And as John suggests having a board member sign a document they have read the governing documents does very little. Waste of paper and time.

And where will this regulations be enforced? More than likely back into the courts.

Amanda, statistical evidence is not required to judge the effectiveness of such state laws. I would not view states such as Florida and California as role models for how things should be done, rather how things can be overdone.

In the end the people of SC will either get what they want or resist what they don't feel they need. Or they will end up with neither.

Sure, cheaters cheat, but some protections for owners are needed, and the cheaters (and the arrogant and the inept) can be caught and thrown out of that HOA's governing body.

Politicians will draft and pass legislation to help remove the "arrogant an inept" in ow that's funny.......

Well, Jon, clearly you are much more clever that me and our little group of rabble rousers. How in the world did you know they needed overthrowing without access to meetings, etc.??

How long ago was this, Jon?

I too disagree with a certificate--how to enforce, etc. i'm pretty sure such legislation failed here a few years back. Surprise! CA!??

But examining HOA docs before signing Off? Having some guidelines about reserves??

I must have not stated this clearly, Jon. I didn't mean the "law" would throw out the arrogant, the cheaters, the inept. I meant that homeowners acting together have and will!

John,

I don't believe the law requires an understanding of the documents. Simply that they have read them.
For an example see the FL law: 720.3033:

(1)(a) Within 90 days after being elected or appointed to the board, each director shall certify in writing to the secretary of the association that he or she has read the association’s declaration of covenants, articles of incorporation, bylaws, and current written rules and policies; that he or she will work to uphold such documents and policies to the best of his or her ability; and that he or she will faithfully discharge his or her fiduciary responsibility to the association’s members.

Please note that nowhere is the requirement that they certify that they actually understand the documents that they have read. Only that they have read them and will work to uphold them to the best of their ability (which of course only to the ability that they understood them).

If you recall, when this law first came out this forum discussed the issue and basically determined it was a "feel good law." That is, it made others feel good although really accomplished very little.

In real life reading any documents does not provide a certainty for understanding them. I would guess such a requirement would have any real affect.

As to some form of certification.

Lawyers must pass the bar examine does that remove inept, uninformed, ignorant, crooked lawyers? Hardly.

Doctors need to be licensed by the state. Does that eliminate poor performance by some in the medical field?

Teachers need to be certified? Do we have a collection of educators lacking any obvious flaws?

So lowering the bar to require simply testifying they have read through these documents means really nothing at all.

And let's not forget board members, for those who like to demand better performance, are volunteers. So for those few willing to give their time now we demand they do even more. Hardly sounds fair or rational to me.

Not sure how other boards operate, but we do not rely or turn to our documents on a frequent basis during the course of doing day to day business.
More useful would possessing simple common sense. I would prefer that to someone who can recite the documents from memory.

I'm still with JohnB, Kerry, and JeffT. I feel some people in my state are left vulnerable without any HOA law in place. I think the people who are commenting against SC passing a law to cover some basics of how HOAs should be run and created are basing their opinion on their own life experiences and not considering the reality of the problems many other people face. Just because we personally have not experienced the problems some we know have or that we read of doesn't mean a real problem does not exist.

I agree, that well thought out legislated laws would be better, than having to spend both associations and homeowners money on lengthy, expensive litigation through the courts in order to seek justice.

I find in interesting that New York has a 18 page "Condo Act" in place that seems to cover ALL the basics, even containing a section titled "Contents of Declaration" (Here in SC we have NOTHING, it's unbelievable how some document are written) We need some basic laws in place for the protection of all parties. JON you seem to be so against any help for SC residents, when you, yourself have "NY Code-Article 9-B:Condominium Act" firmly in place for your state, do you not? I read through it and it seems to cover all bases, I was impressed on how it was written and If I lived in NY I'd be happy to have it as back-up in case I ran into problems.

We don't live in a perfect world, laws won't be written perfectly to address every problem but I believe some basics are needed here in my state.

In reality this is an example of what the people of SC have been and are up against:

The S.C. Builders PAC represents Home Builders Association of South Carolina and has raised $595,000 and spent $470,000 during the election cycle, according the to SC State Ethics Commisssion. The Home Builders Association of South Carolina paid $42,000 to lobbyists during the first half of 2012 to lobby against any HOA law.

The S.C. Realtors Association Political Action Committee raised $1.9 million and spent $1.5 million during the election cylcle, and the South Carolina Association of Realtors paid $40,000 to lobbyists during the first half of 2012 to lobby against any HOA law

The community Association Institute also paid lobbyists $30,000 during the first half of 2012 to lobby against any HOA law.

The only consumer advocate was the AARP who doesn't have a political action committee registered in South Carolina, but the organization paid South Carolina lobbyists $13,000 during that 2012 first half. AARP says " We are more concerned with protecting the homeowner vs. the developer", they also say Most homeowners associations are fine, but some are not following their own rules and their has to be some recourse". There are a couple of legislators who fight for citizens rights but haven't been successful as of yet. Lobbyist with deep pockets continue to stall any bills. It's far from a fair fight. In SC, there is an inherent distrust of any government intervention and fear of over regulation however, I feel this subect is different. I see red flags when these huge deep pocketed groups get involved and spend so much money to lobby against the passing of any HOA law. IMO these groups must have some motive that benefits them greatly or else they wouldn't get involved. That's just the way things work.

So it's not that simple in SC, there a lot more to it than meets the eye. I'm sure it will continue to drag on but hopefully things will eventually be addressed in a way that we all can live with.

Jeff, I agree with Kerry your above point was excellent and very sensible.