Should SC regulate HOAs? As Horry residents complain, some favor state oversight
Horry County residents have ranked number one in South Carolina yet again.
... for complaining about their homeowner associations.
For the fourth straight year, the S.C. Department of Consumer Affairs released data from its HOA complaint database which showed that of the 263 complaints filed in 2021, Horry County residents submitted 31% of them.
That’s more than double other top-complaining counties.
The second-most complaints came from Richland County, though residents there lodged only 13% of complaints statewide. Beaufort County rounded out the top three with 8% of the complaints.
Complaints about HOAs can run the gamut.
Sometimes pets straying off a person’s property raises the hackles of HOA boards.
Other times car decorations cause issues.
Sometimes residents complain about overbearing HOAs, while others complain communication is lacking or that they can’t get important documents from the HOA.
In extreme cases, HOAs take residents to court over home design disagreements.
But other than illustrating that Horry County apparently has a lot to complain about, the data could be used by state lawmakers to regulate HOAs, something that some legislators and residents are ready for.
“I think the state took the first step okay,” said Carole vanSickler, a Carolina Forest resident who’s heavily involved in HOA and community issues. “Maybe the state could create an open link where you could research documents from other HOAs.”
The current data collection system was established in 2018. The Department of Consumer Affairs fields complaints and has analyzed data over the past four years.
You can download the state’s data here.
State Sen. Greg Hembree (R-Little River), who’s worked on HOA-related legislation in the past, said new regulations on HOAs aren’t likely to come this legislative session. But he said lawmakers could be ready to take up the matter next year.
The department will have collected five years of HOA complaint data by then, agency administrator Carri Grube Lybarker said, and the agency will “really dig into the data” and analyze trends to present to lawmakers.
That could create conditions for lawmakers to push through regulations, Hembree said.
“If you have five years of data, that gives you a good argument,” he said.
Many of the complaints from Horry County point to a lack of transparency among HOAs, an area that could be ripe for regulation.
Complaints about residents not being able to access their covenants were common, as were complaints that HOA boards didn’t notify residents of their actions.
HOAs are required to file their covenants with the register of deeds in their county — and residents can access those records by inquiring at the deeds office.
But no central repository of those records exists.
Additionally, according to the data, residents frequently reported they were only given their HOA documents when they closed on a home, vanSickler, who also serves as the head of the Carolina Forest Civic Association, said.
Speaking as a Carolina Forest resident, she said she believes that if Realtors provided HOA documents earlier in the process, some problems could be avoided.
Complaints about HOA fees were also common.
Rep. Ivory Torrey Thigpen (D-Columbia), who’s worked on HOA legislation in the past, criticized some HOA use of liens if residents fell behind on fee or fine payments.
“I don’t think they should have the ability to put a lien on peoples’ homes,” he said. “That’s draconian. You got people who are struggling to pay their mortgage and then they lose their house to an HOA lien. And to me, that’s criminal.”
When asked by the state department how HOA issues could be best resolved, nearly half of Horry County complainants suggested state agency oversight.
Currently, Grube Lybarker said, the agency can only mediate disputes before having to drop the case, though some are able to move to magistrate court.
“It’s a highly contested type of issue,” Grube Lybarker said. “People are passionate about how much regulation should be placed on HOAs. I’m hopeful that the data is being taken into consideration.”
Other Horry County residents who filed complaints suggested the state appoint an ombudsman to mediate disputes.
Restricting HOAs on their ability to charge fees or place liens on homes, forcing HOAs to follow open information standards and putting clearer processes in place for HOA board elections were all regulations Horry County residents said they favored, according to the data.
Hembree described crafting HOA-related legislation as “tricky work” because it involves many different stakeholders, from residents to developers to management companies to individual HOA boards.
Columbia, though, may be willing to tackle transparency-related issues with HOAs.
Thigpen and another Democratic lawmaker, for example, filed a bill under that umbrella last year.
Thigpen noted that the 2017 legislation that created the state data-collection proces originally included regulations, but lawmakers eventually striped those out and argued that regulations should be considered after the state collected several years of data.
“You’re trying to find a structure of regulation that will not be overbearing to the point of over-restrictive but at the same time it’s one-size-fits-all,” Hembree said.
An another issue, Hembree said, is that HOAs are concentrated in certain areas, like Horry County. That means that not all lawmakers care about regulating them.
With that landscape, he said regulation is feasible but is still at least a year away.
For residents like vanSickler, additional HOA transparency could begin to solve problems.
For one, noted Grube Lybarker, no one knows how many HOAs exist in South Carolina since there’s no central database.
From conversations she’s had with residents, Grube Lybarker said many resident generally favor clearer state-level structures for HOAs and more information that’s easily accessible.
But, she said, she’s not holding her breath for quick additional regulations.
“I’m not holding out hope,” she said. “I’m thankful for getting to where we are today.”
This story was originally published February 7, 2022 at 10:47 AM.
