Real Estate News

HOA bill: This legislative session may be for education, the next session for legislation

A bill regulating some things about homeowners associations in South Carolina has been through two hearings in a Senate Judiciary subcommittee, but it may not be possible to get it to the floor and through both chambers before legislators adjourn until next January.

“You’ve got all sorts of ideas that range from transparency to due process to a forum for relief to transitioning developers out,” said Sen. Luke Rankin, R-Myrtle Beach, the bill’s primary sponsor and subcommittee chairman.

The issue for those shepherding the bill is not just those things, he said, but also educating fellow legislators about each idea and helping them see that something needs to be done.

For instance, Rankin said that he agreed with Sen. Greg Hembree’s assessment of the first day of hearing testimony, which was shortened because of weather.

Speakers the first day, said Hembree, R-North Myrtle Beach, believed that “If it ain’t broke, don’t fix it.”

Likewise, Rankin said, other members of the subcommittee didn’t see that there were HOA problems after the first day of testimony. But their feeling changed the second day, when the other side had its say.

“I get it,” Rankin characterized subcommittee members’ feelings about HOA legislation then.

Rep. Nelson Hardwick, R-Surfside Beach, said he and other House members have been swamped with drawing up the state’s biennial budget and dealing with potential ethics legislation.

The HOA bills introduced into that chamber this year have not yet been assigned to subcommittees for hearings, Hardwick said Friday morning.

Each part of the legislation from education to the transitioning of HOA power from developers to homeowners has a set of proponents and opponents.

For instance, those opposed to the mandatory board member education included in the bill, such as Keith Jester, president of the Colonial Charters HOA, say it’s hard enough to get people to serve on boards already.

Mandatory education might dry up the meager pool completely, he fears.

Those looking for some set path by which developers must surrender their control of HOA boards, such of Joann Koffman of Sun City Carolina Lakes in Lancaster County, believe that there must be some legislated limit to developers’ power.

She and neighbors have formed an organization called Change the Board that has gathered more than 700 petitions from other South Carolinians who agree, she said Thursday afternoon.

In between are groups such as the S.C. Homebuilders Association and the Community Associations Institute, whose S.C. chapter legislative committee is chaired by Press Courtney, president of Waccamaw Management that manages more than 100 Grand Strand communities.

Courtney said the institute wants to offer an education compromise that would replace mandatory education requirements with one that requires board members to sign an affidavit that they have read an association’s documents and understand the responsibilities of serving on an HOA board.

Rankin said he’s been told that the Homebuilders Association has a proposal for HOA power transition that it will propose.

Rankin said legislators must further determine how to craft a bill that wouldn’t be burdensome to well-run HOAs while protecting homeowners in those that aren’t.

Hembree said he has an alternate bill that he will talk about in the subcommittee’s next meeting.

If a bill were to be voted out of the subcommittee, it would then need a positive vote from the full Judiciary Committee before it could be scheduled for a vote on the Senate floor.

Then it would be sent to the House, where if it were to proceed would need to go through the same process as in the Senate.

Then differences in the two bills would need to be resolved and the amended version passed by both chambers.

For that to work, Rankin said, almost always requires that the Senate bill have a companion bill that moves through the House at the same time as the Senate version is on its path.

“It isn’t going to happen quickly,” he said, “for sure.”

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