Bill to regulate HOAs gets new life in Senate

A bill to regulate homeowners associations in South Carolina and charge a fee for each lot in communities governed by them has resurfaced in a state Senate subcommittee.

The measure appeared to be dead last month, but a subcommittee of the Senate Judiciary Committee is scheduled to discuss it at 9 a.m. Wednesday in Columbia.

The bill has not passed either the House or the Senate, and legislation is widely considered to be dead for the session unless one chamber passes it by May 1.

Although the bill's chances of being passed this year are considered slim, lawmakers want to continue working for a future compromise, said Sen. Shane Massey, R-Edgefield, a subcommittee member.

Local leaders of community associations and a statewide chapter of a national associations group have opposed the bill. The fees required by the bill would fund a regulatory system within the state Department of Consumer Affairs.

The latest version of the bill would impose a fee of $1 per home or lot, which could cost large associations thousands of dollars.

Proponents say a regulatory system would inject transparency into the state's 6,000 to 7,000 associations, some of which operate secretly. Opponents have said regulation is unnecessary and would create a costly bureaucracy.

Massey said lawmakers want to protect homeowners who have little recourse other than expensive court battles to combat unjust associations, but he said he wants to minimize the role of government, preferably by keeping Consumer Affairs out of the process.

"It needs a lot of work in order to get anywhere," Massey said. "If that is our only means of doing something, then I'd rather do nothing."

One alternative could be requiring that disputes be heard by magistrate courts, which generally clear cases faster than circuit courts, he said. The state also could provide information for people seeking mediation instead of mandating they participate, he said.

The South Carolina chapter of the Community Associations Institute has suggested lawmakers have an appointed board to decide such disputes.

The institute's executive director, Kati Segar, said her group was disappointed that earlier discussions didn't lead to an agreeable bill.

Segar said she hoped lawmakers continue to study the issue and substantially alter the current bill before trying again.

"We understand the need for it, but not the way it's currently written," she said.

Sen. Tom Davis, R-Beaufort, a Judiciary Committee member, said he objects to the bill because he doesn't think the state should intrude in private matters.

"I doubt it can ever be made satisfactory," he said. "I just think the whole premise is flawed."