Board members of South Carolina horizontal property regimes (a/k/a “condominiums”) are usually no strangers to interest, or perhaps even controversy, regarding the prevalence of rental units in their condominium. There are countless condominiums throughout South Carolina with different provisions, allowances, and prohibitions for leasing. Some condominiums may allow no leasing, while others might be comprised of more leased units than owner-occupied units. In any event, in furtherance of the proper administration of leasing restrictions, condominium associations should be aware of a particular statutory provision set forth in the South Carolina Horizontal Property Act (the “Act”).[1]
Some condominium associations may be surprised to learn that the Act contains language indicating that “any restrictions or limitations on the lease of a unit including, but not limited to, the amount and term of the lease” shall be expressed in the master deed or master lease.[2] This would seem to indicate that a restriction regarding the lease of units not contained in the Master Deed, or an exhibit thereto, could be held to be unenforceable under the Act. This may come as a surprise to many condominium associations who have adopted, or intend to adopt, regulations regarding the leasing of units through regulations unilaterally adopted by the board.
Now, the fact that a board of a condominium association may not be able to unilaterally adopt a regulation regarding leasing does not necessarily preclude the association from regulating leasing.
If your condominium association wants to restrict leasing, or otherwise change its existing leasing provisions, it can pursue an amendment to its master deed to add the desired provisions. Of course, the amendment provisions of master deeds vary widely, so it is important that your condominium association reviews the amendment requirements of their specific documents and follows the enumerated procedure. The board may even want to hold informational meetings or otherwise send messages to the membership to help members understand why the board feels certain provisions would be good for the community, and this can help the association achieve the necessary participation for such an amendment.
Again, many condominium associations welcome and encourage leasing, while others may wish to restrict leasing.
Hopefully, in either event, this brief article has served as a helpful notice of an “easy to overlook,” yet important, provision of South Carolina law related to condominiums and leasing restrictions. It is worth noting that leasing restrictions are frequently litigated due to the financial consequences at stake. Therefore, it is always prudent for a condominium association to speak with legal counsel regarding the adoption or amendment of leasing restrictions.
This article is not intended to be an exhaustive discussion of applicable law regarding the South Carolina Horizontal Property Act or leasing restrictions 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] S.C. Code § 27-31-10, et seq.
[2] S.C. Code § 27-31-100(h).