One of the fundamental responsibilities of a homeowners association (HOA) is to uphold and enforce the covenants applicable to the community. Of course, in doing so, HOA boards endeavor to benefit and preserve the welfare of the community’s residents as well as their property values. Often, HOA boards might assume that they are empowered to unilaterally adopt rules and regulations as they see fit because it seems to be part and parcel of the purposes of an HOA. However, as to whether the board actually has the authority to unilaterally adopt rules and regulations, the answer very much depends on the community’s governing documents.

In South Carolina, “[A] corporation may exercise only those powers which are granted to it by law, by its charter, or articles of incorporation, and by any laws made pursuant thereto.”[1] Courts do generally restrict HOA boards to those powers set forth in the governing documents if not otherwise provided by law, and rule-making authority is no exception. In other words, HOA boards should look to their declarations of covenants, bylaws, and/or articles of incorporation to determine if they have rule-making authority. While the authority is quite often set forth in the bylaws where the powers of the board of directors are listed, it is also often found in the declaration of covenants or elsewhere in the governing documents.

One common point of confusion regarding HOA board rule-making authority is the distinction between the authority of the board to adopt rules and regulations applicable to the HOA’s common areas vs. the authority to adopt rules and regulations applicable to the lots in the community.

It is important for boards to understand the specific extent of rule-making authority their documents provide. It is relatively common for governing documents to include provisions such as the following: “The board of directors shall have the power to adopt rules and regulations applicable to the common areas and facilities thereon.” While this provision does grant the board the authority to adopt rules and regulations as to the common areas, it would not itself provide the board the authority to adopt rules and regulations as to the privately owned lots in the community. Such authority would have to be specifically enumerated in the governing documents.

If an HOA board finds that its governing documents do not allow for rule-making authority, it may want to pursue an amendment to the declaration of covenants or bylaws to add that authority.

While this typically requires a vote of the membership as more specifically set forth in the HOA’s specific documents, the membership may be persuaded by the reasoning that unilateral rule-making authority empowers a board to establish reasonable regulations to meet the changing needs of a community more efficiently.

Of course, if your HOA board does have the authority to adopt rules and regulations, it will also want to ensure that they are recorded pursuant to the South Carolina Homeowners Association Act to remain enforceable, as we have previously addressed in our article about recording.[2]

This article is not intended to be an exhaustive discussion of applicable law regarding HOA rule-making authority 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.

Lir Patrick Derieg

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] Seabrook Island Property Owners Ass’n v. Pelzer, 292 S.C 343, 347, 356 S.E.2d 411, 414 (Ct. App. 1987).

[2] S.C. Code Ann. § 27-30-130.