Homeowners associations (HOAs) are generally subject to a number of documents which may include, but not be limited to, declarations of covenants, bylaws, a master deed, or amendments thereto. Of course, HOAs are also subject to their state law. In 2018, South Carolina passed the South Carolina Homeowners Association Act (the “Act”).[1] The Act sets forth various provisions as to the operation of HOAs, but a crucial aspect of the Act is its imposition of certain recording requirements as to HOA governing documents. This article discusses some of these recording requirements and how failure to comply with these requirements may impact your HOA.
The Act provides that, with limited exceptions, an HOA’s governing documents must be recorded in the clerk of court’s, Register of Mesne Conveyance (RMC), or register of deeds office in the county where the property is located in order to be enforceable.[2] (emphasis added). The Act defines “governing documents” as a declaration, master deed, or bylaws, or any amendments to the same.[3] Clearly, this makes it imperative that HOAs record their governing documents. As the Act is fairly recent legislation, a great number of HOAs’ governing documents were adopted years, and even decades, prior to the effective date of the Act. As to those documents, the Act required that they be recorded by January 10, 2019.[4] If your HOA still has documents predating the Act that still have not been recorded, it would be prudent to nevertheless record them as soon as possible. As to governing documents or amendments thereto adopted after that date and any such adoptions going forward, it would be best practice to record them promptly upon adoption to ensure compliance with the Act.
Some HOAs have the authority to adopt rules and regulations, and these HOAs should note that such rules and regulations, as well as amendments thereto, are subject to their own recording requirements under the Act. Specifically, the Act provides that notice of adopted rules and regulations or amendments thereto must be provided to the members via electronic mail or through methods provided by the bylaws to ensure actual notice unless they are either posted in a conspicuous place in a common area in the community or available on a website maintained by the HOA where they may be downloaded by the homeowner. Notwithstanding, to ensure enforceability under the Act and other equitable considerations, it would always be best practice to properly notify all members of the new regulations and to make them available to all members. [5] Moreover, the Act requires that when a new regulation or amendment thereto is adopted, it must be recorded by January 10th of the following year to remain enforceable.[6]
There is a provision of the Act at S.C. Code § 27-30-130(B)(2) which has caused some confusion as to whether rules and regulations, and amendments thereto, must be rerecorded every year following their adoption, stating, “In order to remain enforceable, a homeowners association’s rules, regulations, and amendments to rules and regulations must be recorded in the clerk of court’s, Register of Mesne Conveyance (RMC), or register of deeds office in the county in which the property is located by January tenth of each year following their adoption or amendment.” (emphasis added). While a literal interpretation of this provision means everyyear following adoption, that interpretation is somewhat peculiar in practice. It is conceivable that the legislature did not intend to require the same documents to be rerecorded each year and that the language is simply unclear. However, we cannot be certain what interpretation will be assigned to the language until a court decides the same. For now, it is a best practice to record the rules and regulations, whether they have been revised or not, each year following their adoption or amendment to prevent an unnecessary basis for challenging the enforcement of the rules. While this necessarily leads to a slight increase in costs each year to rerecord, it may be worth the costs to ensure compliance with the Act.
Accordingly, HOAs should be sure to keep up with their recording of not only their governing documents, as defined above, but also any rules and regulations adopted by the Association. Failure to properly record HOA documents can be the difference between enforcing or not enforcing an important restriction, or winning or losing a court case.
This article is not intended to be an exhaustive discussion of the South Carolina Homeowners Association Act or its recording requirements, nor any guarantee regarding the outcome of litigation regarding the same. Our attorneys at McCabe, Trotter & Beverly, P.C. are experienced and well-equipped to answer questions you may have regarding the recording requirements of the Act. Please contact us at (803) – 724 – 5000 for further information.
Article written by D. Ryan McCabe, 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] S.C. Code § 27-30-110 et seq.
[2] S.C. Code § 27-30-130(A)(1).
[3] S.C. Code § 27-30-120(4).
[4] S.C. Code § 27-30-130(A)(2).
[5] S.C. Code § 27-30-130(B)(1)(b).
[6] S.C. Code § 27-30-130(B)(2).