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SC-LAC 2024 (2nd Regular Session of the 125th South Carolina General Assembly) Legislative Session Update – 9/3/24
The Community Associations Institute South Carolina Legislative Action Committee (SC-LAC) has been working hard on your behalf to make changes to the law that will improve the lives of the persons that live in and serve community associations as well as to stop negative changes. The 2023-2024 legislative session has come to an end. Therefore, we are providing you with this update to discuss the results of our efforts as well as to raise new potential issues we may face in the next legislative session.
We are happy to report that no negative bills passed this session. Here are the results and SC-LAC’s positions on the respective bills.
- Bills that Passed (2nd Regular Session of the 125th South Carolina General Assembly):
The following bills passed into law this session:
H. 4843 (Business Use of Deck, Dock, or Other Structure on Wetlands) – Neutral - This bill provides: “Notwithstanding any statutory or regulatory provision of law to the contrary, including any provision of or authorized by this chapter, a business that contains a grandfathered or permitted commercial deck or marina that is located in a critical area may utilize such structure for purposes of providing food and beverage services for consumption by patrons of the business.” This bill is not specific to community associations, but it may have impact upon some associations with a deck, dock, or other structure on wetlands. SC-LAC monitored this bill closely for community association impact. This bill became effective July 2nd, 2024.
S. 844 (Insurance Study Committee) – Supported – This bill provides for a study committee that will review South Carolina’s “civil justice and insurance laws from the standpoint of adequacy, equity, and efficiency” and its review shall include the availability, premium rates, and deductibles for property and casualty for single-family dwellings, multi-family units, and condominium complexes and commercial buildings; commercial general liability; and business. SC-LAC supports legislation that will promote reasonable insurance rates and improve access to insurance to associations. The insurance committee’s report is due to the General Assembly, the Governor, and the Public via website, not later than January 31st, 2025.
S.881 (Prohibition of Unfair Real Estate Service Agreements) – Supported – This bill provides that a real estate service agreement is unfair and void if it: (1) runs with the land to bind future owners to the agreement; (2) allows for assignment to future service providers without notice or consent of a buyer; and (3) creates a lien or other security interest for the service provider on the property. Community association CC&Rs are expressly excluded from the application of the law. SC-LAC supports laws that promotes freedom of choice with respect to an association’s selection of service providers for its community. This bill became effective May 20th, 2024.
- Bills that Did Not Pass (125th South Carolina General Assembly):
The following bills did not pass this session but are important to note as similar bills may be presented in future sessions:
S.118 (Assessment Statement Fee Timeframe & Fee Cap) – Opposed – This bill requires provision of a binding unpaid assessment statement within 10 days for a real estate closing. Further, the bill restricts the fees associated with providing such a statement to $100 and an additional $75 if the statement was demanded within 48 hours. SC-LAC opposes restrictions upon the provision of services for associations as well as governmental fee caps on such services.
S.282 & H.3930 (Moved the Beach Restoration & Improvement Trust Fund Under the Department of Parks, Recreation & Tourism) – Supported – This bill places the Beach Restoration & Improvement Trust Fund under the authority of the Department of Parks, Recreation & Tourism. Further, it requires funding for annual monitoring and evaluation of erosion rates. SC- LAC supports maintaining South Carolina’s beaches.
S.421 (Requires Free Use of Common Areas for Events and Prohibits Clothing Restrictions) – Opposed – This bill would require associations to allow residents to use common areas at no charge and without insurance for the purpose of assembling in any manner, which would arguably include parties. 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. The bill authorizes civil penalties of $500 for each violation. SC-LAC opposes governmental restrictions that strip associations of the right to self-govern and would expose community residents and property to harm.
S.422 (Prohibition Against Solar Panel Restrictions) – Monitored Closely – This bill prohibits restrictions against installation and utilization of solar panel systems that cannot be seen from the street or a common area. While the bill allows for architectural control, the LAC is concerned about amendments that might be proposed if the bill moves forward. The bill’s author has promised to involve CAI if interest in the bill arises. SC-LAC generally opposes governmental restrictions that strip associations of the right to self-govern the aesthetics of their communities and protect the interests of all unit owners to enjoy their property in the manner agreed upon when purchasing their homes.
S. 953 (Short-Term Rentals) – Opposed - This bill would prohibit cities, counties, and other political subdivisions of the state from enacting and enforcing short-term rental restrictions with certain limited exceptions for health & safety, registration, and adult businesses or recovery. Currently, the restrictions expressly exclude homeowners associations from the prohibition on enacting short-term rental restrictions. SC-LAC opposes legislation that would preclude cities and counties from enacting short-term rental restrictions applicable to the unique nature of the respective cities and counties or that may open the door to similar restrictions on associations in the future.
S.508 & H.4064 (Multifamily Dwelling Safety Act) – Supported – The Multifamily Dwelling Safety Act would establish requirements for inspection of wooden balconies of multifamily dwellings to ensure the balconies are in a safe condition. SC-LAC supports maintenance of common area components in a manner that protects the safety of residents.
H.3090 (Revised Uniform Unincorporated Nonprofit Association Act) – Neutral – This bill would enact the Revised Uniform Unincorporated Nonprofit Association Act in South Carolina. While this bill is not specific to community associations, it could potentially impact a few associations that are unincorporated.
H.3180 (Prohibits Foreclosures by Homeowners Associations) – Opposed – This bill would strip homeowners’ associations of the ability to foreclose and leave them with only a lien right. SC-LAC opposes any legislation that restricts or otherwise precludes an association from collecting the assessments needed to maintain a community.
H.3253 (Prohibits Cities and Counties from Enacting Short-Term Rental Restrictions) – Opposed – This bill would prohibit cities and counties from enacting and enforcing short-term rental restrictions. SC-LAC opposes legislation that would preclude cities and counties from enacting short-term rental restrictions applicable to the unique nature of the respective cities and counties.
H.3258 (Prohibits Homeowners Associations from Restricting Political Signs) – Opposed – This bill would preclude homeowners’ associations from adopting and enforcing rules restricting political signs and does not contain an exception for lewd and defamatory content. The bill is very vague about how large a sign can be. SC-LAC opposes governmental restrictions that strip associations of the right to self-govern their communities and maintain community standards in the manner owners agreed upon when purchasing their homes.
H.3259 (Requires Distribution of Operating Budget to Owners and Dept. of Consumer Affairs) – Opposed – This bill would require distribution of an association’s operating budget annually and a quarterly distribution of all expenditures to all unit owners and the Department of Consumer Affairs (“DCA”). SC-LAC opposes the imposition of unnecessary expenses, such as the expense of distributing financial information quarterly that most owners will not read, and unnecessary government oversight over associations. The DCA has no direct authority over HOAs.
H.3493 (Coastal Structural Stability Study Committee) – Supported – This bill resolves to create a committee to examine current measures for inspecting high-rises along the coast for structural soundness. The House Labor, Commerce, and Industry Committee has rejected establishment of a study committee and instead proposes meetings with CAI, developers, engineers, contractors, insurers, municipalities, and other stakeholders to devise legislation to address condominium structural issues throughout the state. SC-LAC supports measures that will help maintain the structural integrity of buildings and avoid tragedies like the one that occurred in Surfside, Florida.
H.3568 (Prohibits Expenditures Not in Budget; Prohibits Payment of Owner Utilities by Association) – Opposed – This bill would prohibit an association from expending funds on matters not identified in the annual budget without additional notice to owners, which is patently impractical since budgets are merely estimates. Further, the bill would require associations to transfer control and payment of unit utilities from an association to an owner, which would result in exorbitant costs to unit owners caused by the need to change utility installations. SC-LAC opposes impractical restrictions on daily governance as well as changes that would result in substantive increases in costs to homeowners without any benefit.
H.3775 (Right to Fly South Carolina Flag Along with U.S. Flag) – Supported – This bill would allow owners the right to fly the South Carolina flag in addition to their existing right to fly the U.S. flag and require HOAs to allow flag poles. SC-LAC has proposed amendments it deems necessary, but the bill has not received any traction. SC-LAC supports building a sense of community by showing support for the United States of America and the State of South Carolina.
H.4119 (Unilateral Removal of Unlawful Restrictive Covenants) – Opposed - This bill would allow an owner to unilaterally remove restrictive covenants against their unit and record a new instrument where such covenants are held to void by the South Carolina Supreme Court or the United States Supreme Court; or in violation of the acts prohibited by Chapter 21, Title 31. While SC-LAC supports the unilateral removal of unlawfully discriminatory covenants, SC-LAC does not support an overly broad, vague, and ambiguous ability to remove covenants.
H. 4549 (Amateur Radio Antenna Protection Act) – Opposed – This bill prevents homeowners associations from prohibiting the installation of amateur radio antennas, but it does allow for reasonable regulations as to placement and appearance. SC-LAC generally opposes governmental restrictions that strip associations of the right to self-govern the aesthetics of their communities and protect the interests of all unit owners to enjoy their property in the manner agreed upon when purchasing their homes.
H. 4573 (Private Property Protection Act of 2024) – Opposed - This bill prohibits cities, counties, and other political subdivisions of the state from enacting or enforcing laws prohibiting short-term rentals. This would prevent individual cities and counties from determining the manner that is most appropriate short-term rentals for their particular areas. The enactment of such a bill would likely lead to a similar proposal to restrict associations from adopting similar restrictions for their communities. SC-LAC generally opposes governmental restrictions that may lead to associations losing the right to self-govern their communities and protect the interests of all unit owners to enjoy their property in the manner agreed upon when purchasing their homes.
H. 4639 (Prohibits Housing Discrimination by Income) – Monitored Closely– Current law prohibits discrimination against any person in relation to a dwelling on the basis of “race, color, religion, sex, familial status, or national origin.” This bill proposes to add “source of income” to these protected classes of persons. “Source of Income” and how it would be applied under the bill has not been defined. The potential impacts of this bill are unclear at this time. SC-LAC generally opposes discrimination in housing. SC-LAC will monitor this bill closely.
H. 4754 (Licensing Requirements for Real Estate Brokers, Associates, and Property Managers) – Monitored Closely – This bill changes the licensing and education requirements for real estate brokers, associates, and property managers. Currently, the definition of “property managers” does not apply to community association management and the bill does not impose restrictions on community association management. SC-LAC opposes licensing requirements for community association management and will monitor this bill closely on this issue.
H. 4991 (Foreclosure Resolution Program) – Opposed – This bill empowers the Department of Consumer Affairs (“DCA”) to create a “Foreclosure Resolution Program” (“FRP”) whereby persons subject to foreclosure of a residence where they reside must receive certain notices from the creditor (ex: an association) and the DCA prior to foreclosure occurring. The notices provide the owner with notice of rights under the FRP, which include meeting with a third party neutral and the creditor to seek alternative resolutions to foreclosure. Other states have previously utilized and discontinued similar programs due to the failure of such programs to provide positive benefits to residents subject to foreclosure. SC-LAC opposes legislation that will increase collection costs and provide further barriers to the collection of the assessments that are necessary to allow community associations to continue to function.
- Issues to Anticipate Next Session
Based upon reports from government agencies and national trends monitored by CAI, SC-LAC anticipates that bills impacting community associations that involve the following issues may be presented next session:
Internal Dispute Resolution Process Requirements – The South Carolina House Oversight Committee submitted its 2024 Study Report (“Report”) on the Department of Consumer Affairs (“DCA”) to the General Assembly and Finding #12 of the Report applies specifically to community associations. The Report recommends amendments to state law to require associations to have “internal dispute resolution processes” but the processes themselves were not specified in the Report. Presently, CAI’s National Government and Public Affairs Committee is revising CAI’s Internal Dispute Resolution Public Policy. SC-LAC will monitor this issue closely and will support the adoption of internal dispute resolution process requirements that are consistent with CAI National policy guidelines and promote fair and reasonable governance of community associations.
Magistrate Court Jurisdiction for All HOA Disputes Regardless of the Amount in Controversy – Opposed - The Report recommends that all HOA disputes be heard by magistrate courts regardless of the amount in controversy. The concept of placing all HOA disputes before a magistrate regardless of the amount in controversy would essentially be unique to South Carolina, but some other states have adopted failed programs allowing limited HOA disputes to be heard by small claims courts or referees. In South Carolina, a magistrate is not required to possess a law degree or have any judicial experience. It would be unconscionable to place the determination of real property rights of individuals’ homes, construction defect claims, and other HOA disputes involving millions of dollars in property rights before a magistrate with no legal qualification or experience. SC-LAC opposes legislation that will deprive homeowners and their associations of duly qualified and experienced judges to adjudicate property rights. SC-LAC is opposed to this recommendation.
Changes to Voting Procedures – The Report recommends that laws imposing changes to voting procedures be imposed for community associations. The nature of such changes or the reasons therefore were not set forth in the Report. While CAI supports the adoption of uniform voting procedures that facilitate efficiencies in voting for all associations on a national level, such as those set forth in the Uniform Common Interest Ownership Act (“UCIOA”), the scope and nature of the changes the Report proposes is unknown. SC-LAC will monitor this issue closely.
Prohibition of Charges to Owners Who File DCA or Alternative Dispute Resolution Complaints – The Report recommended that state law prohibit HOAs from charging owners who file DCA or alternative dispute resolution (“ADR”) complaints against their community associations. As a matter of policy, CAI does not support laws that allow individual owners to subject associations to complaints at no cost and thereby shift the costs of their personal complaints to their neighbors regardless of the legitimacy of such complaints. Rather, CAI promotes the adoption of ADR policies that fairly address how costs will be allocated between the parties, that are not cost prohibitive for owners to meaningfully participate in the procedure, and that distinguish any manners that would not be appropriate for ADR. SC-LAC will monitor this issue closely.
Restrictions Upon Foreclosures – Attempts to strip community associations’ ability to collect their assessments is a recurring issue. SC-LAC opposes any unreasonable restrictions upon an association’s ability to collect assessments from delinquent owners.
As you can see from the results above, CAI LAC’s efforts make your communities safer, reduce costs to associations, and prevent harm to your associations. CAI LAC would not have the ability to have an influence on the political affairs of our state without the efforts of our excellent lobbyists, Mr. Graham Tew and Mr. Drew Clawson, and our team of volunteer LAC members. It is imperative that we keep Mr. Tew and Mr. Clawson on retainer to continue to achieve success at the legislature. Therefore, CAI LAC requests your donations to support CAI LAC.
- Alternatively, you may call our Chapter Executive Director Raymond Dickey at 888-445-7946 and donate via credit card.
- Alternatively, you may donate by check payable to South Carolina LAC and mail to: SC-CAI, 7 S. Essex Ave. #217, Margate City, NJ 08402.
- All associations are encouraged to contribute “A Dollar A Door or More” to SC-LAC. See donation form below.
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