Whether it is maintaining common areas, managing facilities, preserving neighborhood standards, or collecting assessments to fund the same, homeowners association (HOA) board members know firsthand the many “hats” they wear for the benefit of their communities. However, while covenant/rule enforcement is just one of many necessary HOA functions, it is among the most publicized and likely to lead to legal disputes. With all that an HOA board has to manage, some boards may even be unaware that their governing documents actually set forth specific procedures which must be followed in order to exercise their enforcement remedies. For that reason, we feel this brief reminder of the importance of observing proper procedure in covenant enforcement for South Carolina HOAs, and why it is so important, may be helpful.
Under South Carolina case law, HOAs generally only have the authorities set forth in their recorded articles, bylaws, or declarations of covenants.[1] Therefore, as to just what enforcement remedies your HOA might have (fines, “self-help,” etc.), that would depend on your HOA’s specific governing documents. For instance, as we previously wrote here, a South Carolina HOA generally only has the authority to fine if that authority is set forth in its articles, bylaws, or declaration of covenants. That said, this article is not intended to address what enforcement mechanisms/sanctions might be available to an HOA, but rather a reminder to be familiar with your HOA’s specific enforcement procedure as to whichever mechanism you are enforcing.
In South Carolina, restrictive covenants are construed like contracts and bind the parties to them in the same manner as any other contract.[2] Accordingly, while homeowners are generally bound to comply with the restrictive covenants applicable to the property, the HOA is also bound to comply with the procedures of the governing documents. Some HOA governing documents set forth very specific procedures for covenant enforcement, and the HOA can expect to be held to these procedures in the event it seeks to enforce the covenants. Documents vary from HOA to HOA, but some examples of procedures one might find in their governing documents is a specified notice and “cure” period prior to any sanctions. Also, it is not entirely unusual for HOA documents to require an actual hearing before the board before a sanction can be imposed. Whatever procedure the HOA’s specific governing documents might require, that is going to be the procedure the HOA must follow.
A board’s failure to comply with an established enforcement procedure can be costly to the HOA from a monetary and practical perspective.
For example, if a legal challenger can establish that an HOA levied fines without complying with specific procedural provisions in the governing documents, a court would likely invalidate those fines and/or any other enforcement remedies imposed in violation of the procedure. Failure to comply with the procedures in the governing documents can also leave the HOA susceptible to claims for damages, injunctions, and possibly, depending on the governing documents, the other party’s attorney fees. Outside of a court setting, failure to comply with the enforcement procedure provisions of the governing documents foreseeably diminishes the trust owners have in their HOA to properly and fairly uphold the governing documents.
HOA boards sometimes find themselves dissatisfied with the enforcement procedures in their governing documents. Perhaps the HOA’s covenants or bylaws set forth a rigid enforcement procedure that is so convoluted that it frustrates the HOA’s efforts in reasonably addressing or deterring violations. The board may understandably want to change the procedure or adopt a new one. However, if the procedure is set forth in the declaration of covenants, bylaws, or articles of incorporation, the board cannot generally unilaterally adopt a new procedure to supersede the one already set forth in those governing documents. Rather, it would require an amendment to the declaration of covenants, bylaws, or articles that set forth the procedure. This usually requires a document-specific vote of the homeowners, but perhaps the necessary vote can be achieved when homeowners are informed of the hurdles presented by the preexisting enforcement procedures. Now, if those governing documents do not already set forth an enforcement procedure, the board may very well be empowered to adopt a procedure/policy. That said, it would be important for the board to remember that they will be held to comply with whatever policy is adopted, even if steps in such a policy are accidentally missed by a subsequent iteration of the board. Therefore, if an HOA is interested in either amending their documents to change a preexisting enforcement procedure, or adopting a new procedure of their own, it is prudent to consult with legal counsel to help ensure it complies with other provisions of their governing documents and can be lawfully implemented.
In closing, it cannot be stressed enough how important it is for HOAs to be familiar with their specific governing documents and any enforcement procedures which may be set forth therein.
While we hope your HOA will rarely have to engage in covenant enforcement, it is an unavoidable reality of HOA board service. Given the inherently contentious nature of covenant enforcement, it is prudent to consult with legal counsel as questions arise.
This article is not intended to be an exhaustive discussion of applicable law regarding HOA covenant enforcement nor any guarantee of the outcome of any litigation regarding the same. Our attorneys at McCabe, Trotter & Beverly, P.C. are experienced and well-equipped to answer questions you may have regarding this topic. Please contact us at 803–724–5000 for further information.
R. Myers Truluck, Jr.
McCabe, Trotter & Beverly, P.C. blogs and other content are for educational and informational purposes only. This is not legal advice and does not create an attorney/client relationship between McCabe, Trotter & Beverly, P.C. and readers. Readers should consult an attorney to understand how this information relates to their personal situation and circumstances. You should not use McCabe, Trotter & Beverly, P.C. blogs or content as a substitute for legal advice from a licensed attorney.
[1] See Seabrook Island Property Owners Ass’n v. Pelzer, 292 S.C. 343, 347, 356 S.E.2d 411, 414 (Ct. App. 1987) (“a corporation may exercise only those powers which are granted to it by law, by its charter or articles of incorporation, and by any bylaws made pursuant thereto…”).
[2] Kinard v. Richardson, 407 S.C. 247, 257, 754 S.E.2d 888, 893 (Ct. App. 2014).