With the second regular session of the 125th South Carolina General Assembly now adjourned, it is time to look at where things are now that the session has ended. Over this most recent legislative session, South Carolina saw a number of bills potentially affecting homeowners associations and condominiums filed. Two were signed into law. Several more gained the attention of legislators, and one was passed by the House but died in the Senate. Many of these bills, had they been enacted, would have been detrimental to condominiums and homeowners associations.
With the session now over, it is time to see where all the bills sit and what to expect for next year.
Bills That Were Signed Into Law
H.4049 (Virtual Meetings & Electronic Voting). This bill made it possible for most homeowners associations and condominiums in South Carolina to conduct virtual membership meetings and for the members of each to participate remotely, including voting by electronic methods. The board of directors of any HOA or condo is able to determine whether, and to what extent, virtual meetings will be used and what procedures may apply. This bill is a welcome addition, as most homeowners in today’s world have come to expect the use of these technologies in day-to-day life.
The full text of the bill can be found here https://www.scstatehouse.gov/sess125_2023-2024/bills/4049.htm
S. 881 (Prohibition of Unfair Real Estate Service Agreements). This bill addresses the recent attempt by some companies to tie up real estate in a way that requires present and future owners to use specific vendors, such as a realtor or broker. These recorded documents (or language included in deeds) purport to run with the land and require future owners to use those companies. The bill applies to all agreements with a duration of one year or more that purport to (1) run with the land, (2) allow for assignment of the right to provide services without notice or consent of the owner or buyer, or (3) create a lien or encumbrance, or other real property security interest.
The bill does not apply to home warranties; insurance contracts; leases with options to purchase or contracts for deed; a declaration pursuant to the Homeowners Association Act, Horizontal Property Act, Vacation Time Share Plan, or the Nonprofit Corporation Act; a security agreement under the UCC; provision of water, sewer, electrical, telephone, cable, natural gas, propane, fuel oil, or other regulated utility service; a property management contract; or actions regarding mechanics’, laborers’, or materialmen’s liens or commercial real estate broker liens. The bill provides for damages, attorney’s fees, and costs for violations. It also constitutes an unfair trade practice.
As a bill designed to promote freedom of choice with respect to community members’ service providers and that removes and prevents invalid deed restrictions from members’ chains of title, this is a good piece of legislation that South Carolina got right.
The full text of the bill can be found here https://www.scstatehouse.gov/sess125_2023-2024/bills/881.htm
Bills That Passed the House or Senate and Moved to the Other Chamber
H.3180 (Foreclosure in Homeowners Association). This bill, as originally drafted, would have prohibited a homeowners association from foreclosing under their governing documents and would have required creation of that right by statute, rather than a homeowners association’s governing documents. After sub-committee hearings, this bill was recommended, with changes, by the House Committee on Labor, Commerce and Industry and was later approved by the full House. That amendment will require an additional court hearing in the foreclosure process in most cases to ensure that homeowners are given ample opportunity to be made aware of the seriousness of the legal proceedings when a foreclosure has been filed.
This bill passed the House but was not taken up by the Senate and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3180.htm
H. 4843 (Docks, Decks and Structures on Wetlands). This bill proposes to authorize businesses (and as originally drafted, potentially a homeowners association) to utilize a deck, dock, or other structure located in a critical area for purposes directly related to the operation of the business (or homeowners association). “Critical areas” are defined by DHEC as coastal waters, tidelands, beaches and beach/dune systems. These uses would need to have the approval of the local zoning board. This bill was submitted by Horry County representatives because of numerous restaurants located over wetlands—it was designed to be a preemptive effort to make sure their continued use is permitted. The bill was later amended to remove the ambiguous language that may have allowed it to be applied to a homeowners association. It was passed by the House and amended by the Senate and passed. It is now in conference committee to work out the differences between the two bills.
Bills That Did Not Pass the House or Senate and Must be Refiled
S.118 (Statements of Unpaid Assessments). This bill would require that a statement of unpaid assessment be provided upon request within ten days. It also sets an arbitrary limit on charges for providing statements of unpaid assessments, with limits of $100 for standard requests, and an additional $75.00 for requests made within 48 hours.
The bill was introduced in the Senate, was referred to the Committee on Judiciary, and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/118.htm
S.282 & H.3930 (Beach Restoration & Improvement Trust Fund). This bill would place responsibility for the beach restoration and improvement trust fund under the authority of the Department of Parks, Recreation and Tourism.
The Senate version of the bill was reported favorably by the Committee on Fish, Game and Forestry, was referred to the Committee on Finance, and ultimately died in committee.
The House version of the bill was referred to the Committee on Ways and Means and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/282.htm
S.421 (Canvassing and Use of Common Areas). This bill would require homeowners associations to allow any homeowner to use the common area for just about any purpose and would be prohibited from making owners responsible for paying for use, damage, or insurance for that use. This bill prohibits rules that impose clothing restrictions in common areas without limitations for clothing that would be lewd, revealing, damaging to pool components, or otherwise inappropriate. In addition, the bill would prevent homeowners associations from prohibiting canvassing and apply a civil penalty of $500 for violations by the homeowners association.
The bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/421.htm
S.422 (Solar Installations). This bill would allow homeowners associations to prohibit solar installations on roofs if the installation is visible from common areas or streets surrounding a home. It would also require that any architectural review process is still complied with.
The bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/422.htm
S.508 & H.4064 (Multifamily Dwelling Safety Act). This bill would establish requirements for inspection of wooden railings on balconies of residential multifamily dwellings and for repairing those balconies found to be deficient.
The Senate version of this bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The House version of this bill was referred to the Committee on Labor, Commerce, & Industry and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/508.htm
S.844 (Study Committee on SC Civil Justice and Insurance Laws). This bill proposes to study the problem of coverage availability, premium rates, and deductibles for many types of insurance, including property insurance for single family, condominium, and commercial buildings. The proposed study committee would be required to submit its report by January 31, 2025 and be dissolved at that date unless extended by further enactment.
The bill was referred to the Senate Committee on Judiciary, was reported favorably, but was not taken to a vote by the full Senate. As a result, the bill died.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/844.htm
S. 953 (Short Term Rentals). This bill would prevent local government from prohibiting or effectively prohibiting short-term rentals. Among other things, local government could not (1) restrict short-term rentals based on their classification, use, frequency, or duration, or (2) restrict short-term rentals unless it is for (a) public health and safety; (b) require registration prior to renting (and fines may be levied for failure to register); (c) to limit or prohibit short-term rentals for sex offenders, sober-living homes, selling illegal drugs, liquor control, pornography, obscenity, nude or topless dancing, or other adult oriented businesses. Local government could also not regulate the operation of a lodging marketplace (such as Airbnb) or require a lodging marketplace to provide personally identifiable information of users without a subpoena or court order. This part specifically does not apply to homeowners associations. Much of the rest of the bill is concerned with authority to levy taxes for various things.
The bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/953.htm
S. 1085 (Prohibit foreclosure by HOAs). This bill would prohibit HOAs from foreclosing on a primary residence and limit the potential lien amount to no more than ten percent of the assessed value of the property at the time the lien is placed.
The bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/1085.htm
S. 1134 (Co-ownership of residential dwellings). This bill would limit the authority of local government, and potentially other entities like a homeowners association, to regulate or control co-owned homes. It is not clear if this is intended to prevent regulation of rental activity or if it is aimed at something else.
The bill was referred to the Senate Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/1134.htm
S. 1244 (Restrictions Affecting Real Property). This bill proposes to allow individual property owners or their attorneys to record an instrument invalidating restrictive covenants that encumbers or affects the transfer or sale of real property or that affects any interest in real property. To do so, there must have been a decision by the United States or South Carolina Supreme Court or the restrictive covenants must violate the South Carolina Fair Housing laws. As proposed, this bill is extremely vague and leaves much to the imagination. It certainly opens the door for litigation on several fronts because of the ambiguity of the language of the bill. For example, who gets to determine that a restrictive covenants violates the Fair Housing laws? Does it require a judgment by a court of competent jurisdiction? Or a determination by an unlicensed investigator? Or just when a disgruntled homeowner disagrees with it?
The bill was referred to the Senate Committee on Labor, Commerce and Industry and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/1244.htm
H.3090 (Revised Uniform Unincorporated Nonprofit Association Act). This bill would create a statutory structure for unincorporated nonprofits, somewhat similar to the way the SC Nonprofit Corporation Act governs incorporated nonprofits. Although this bill is not specific to homeowners associations or condominiums and would not apply to most, there may be some that were created but not incorporated under the SC Nonprofit Corporation Act and the bill would potentially apply to them.
This bill was referred to the House Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3090.htm
H.3253 (Short Term Rental Restrictions by Local Government). This bill would prohibit local government like cities and counties from enacting and enforcing short-term rental restrictions. There is currently much opposition from local government for this bill since it does not allow for the tailoring of local control unique to the respective cities or counties.
This bill was referred to the House Committee on Medical, Military, Public and Municipal Affairs where it ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3253.htm
H.3258 (Political Signs in Homeowners Associations). This bill would prohibit homeowners associations from adopting and enforcing rules that restrict political signs up to 30 days before an election and up to five days after an election.
This bill was referred to the House Committee on Judiciary where it ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3258.htm
H.3259 (Operating Budgets Provided to Owners and Department of Consumer Affairs). This bill would require that an association send a copy of its budget to owners no later than 10 days after start of fiscal year and send quarterly statements to homeowners. It also would require the filing of an annual and quarterly budget statement with Department of Consumer Affairs.
This bill was referred to the House Committee on Labor, Commerce and Industry and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3259.htm
H.3493 (Coastal Structural Stability Study Committee). This bill would create a committee to study inspection of commercial buildings of 6 floors or more on the SC coast and Charleston peninsula. This bill is in response to the 2021 collapse of the Champlain Tower South condominium in Florida that killed 98 people. Although the bill is currently tailored only to include some areas and some types of buildings, the CAI SC Legislative Action Committee (the “SC-LAC”) is working with the bill’s sponsors to specifically include residential condominium structures in the entire state or to propose an alternative bill that would address concerns similar to those raised in Florida (inspections, reserves for repairs, funding, older buildings, etc.).
This bill was referred to the House Committee on Labor, Commerce and Industry where it ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3493.htm
H.3568 (Prohibits Expenditures Not in Budget; Prohibits Payment of Owner Utilities by Association). This bill has some similarities with H.3259, but goes further. It would prohibit an association from expending funds on matters not identified in the annual budget without additional notice to owners. Further, the bill would require associations to transfer control and payment of unit utilities from an association to an owner, which could result in additional substantial costs to unit owners caused by the need to change utility installations. It would also require an association to send a copy of the budget to owners no later than 10 days after start of fiscal year (which most HOAs are required by their documents to do anyway) and to send to owners updated copies of the budget each quarter, including details about expenditures, fines, and how fines are allocated. It would also require that the association file its budget and quarterly updates with the Department of Consumer Affairs.
This bill was referred to the House Committee on Labor, Commerce and Industry and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3568.htm
H.3775 (Right to Fly South Carolina Flag and Flag Poles). This bill creates a right to fly the South Carolina flag similar to the existing rights related to flying the United States flag. The bill would also require an association to allow installation of a flagpole.
This bill was referred to the House Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/3775.htm
H.4119 (Unilateral Removal of Unlawful Restrictive Covenants). This bill would allow property owners to unilaterally record legal documents that purport to remove restrictive covenants that are held to be void by the South Carolina Supreme Court or the United States Supreme Court or that are in violation of S.C. Code, Title 31, Chapter 21. As drafted, this bill is very broad, vague, and ambiguous on how this would really work.
This bill was referred to the House Committee on Judiciary where it ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/4119.htm
H.4549 (Amateur Radio Antenna Protection Act). This bill requires HOAs to allow homeowners within their associations to install amateur radio antennas (or HAM radios) on their property. HOAs would be allowed to establish reasonable regulations on the location and appearance of antennas that do not prohibit installation or use. This bill received support by several additional bill sponsors and even went as far as receiving a sub-committee hearing. Ultimately, the sub-committee voted to table it for further review and it did not come out of that committee.
This bill was referred to the House Committee on Labor, Commerce, & Industry but ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/4549.htm
H.4573 (Private Property Protection Act of 2024). This bill prohibits counties and local government from enacting or enforcing short-term rental rules. Appears to be identical to H.3253 that was filed last year.
This bill was referred to the House Committee on Medical, Military, Public, and Municipal Affairs where it ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/4573.htm
H. 4639 (Housing Discrimination). This bill proposes to add source of income to the list of protected classes under South Carolina’s Fair Housing laws. The current protected classes are race, color, religion, sex, national origin, familial status, and disability.
This bill was referred to the House Committee on Labor, Commerce, & Industry and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/4639.htm
H. 5232 (Fractional Ownership of Residential Dwellings). This bill would limit the authority of local government, and potentially other entities like a homeowners association, to regulate or control co-owned homes. It is not clear if this is intended to prevent regulation of rental activity or if it is aimed at something else.
This bill was referred to the House Committee on Ways and Means and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/5232.htm
H. 5304 (Constitutional Rights of Homeowners). This bill would potentially prohibit any community association from restricting a constitutional right of either a property owner or resident in a planned community. It is unclear what this bill is aimed specifically at addressing, and it is very broad. If passed, it would be the only legislation of its kind that applies the onus of the bill of rights to private parties, rather than the government.
This bill was referred to the House Committee on Judiciary and ultimately died in committee.
The full bill can be found at https://www.scstatehouse.gov/sess125_2023-2024/bills/5232.htm
If you have specific questions on any of the above bills, feel free to contact me or another attorney at our firm. If there are developments on these or other relevant legislative proposals, additional information will be posted.
FYI, the SC Legislative Action Committee (SC-LAC) is a committee of the Community Associations Institute. The SC-LAC is a diverse group of homeowner leaders, community managers, and representatives from community association business partners that provide perspective to legislators on how proposed legislation could impact people living and working in community associations. They volunteer countless hours to track legislation, give you a voice with legislators, and keep you informed and involved if problematic legislation is introduced or beneficial legislation needs your support. I am currently serving as the Chair of the SC-LAC for 2023 and 2024. To properly do its job, the SC-LAC needs funds for letters, mailings and other costs related to advocating for laws that benefit communities.
Please consider a contribution to the SC-LAC by visiting the CAI Legislative Action Committee donor page.