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Bill would increase oversight

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Lawmakers want state to monitor homeowners


Other stories by Ashley Fletcher
Published Friday, March 12th, 2004

Two Richland County state legislators want homeowners associations and their rules to be scrutinized by the S.C. Secretary of State's office.

Rep. Jimmy Bales, D-Eastover, and Sen. Darrell Jackson, D-Hopkins, have filed versions of the same bill in the House and Senate that would require the 2,645 homeowners associations in the state to file their governing documents and any amendments with the Secretary of State's office within 10 days of adopting them.

The Secretary of State's office would be charged with reviewing the documents to determine their compliance with state law and existing homeowners association rules and to make sure they were adopted fairly.

If they do not comply, the bill would require the Secretary of State's office to notify all members of the homeowners association and the Department of Consumer Affairs, which could impose unspecified fines or injunctions against the homeowners association board.

All members of an association's board of directors would be personally and jointly liable for a breach of their duties.

It is unclear whether property owners associations would be targeted by the bill as well. Bales said the bill would apply to homeowners associations only, not property owners associations.

But the bill defines a homeowners association as "an organization organized and operated to provide for the acquisition, construction, management and maintenance of real and personal property owned by the association for the use, benefit and enjoyment of the members."

Including property owners associations raises the total number of organizations subject to review to 2,883.

Bales said he filed the bill after a few constituents complained that their homeowners associations were not notifying all members of elections and votes on how regime fees would be spent. He said he does not think the problem is widespread, however.

But a local property owners association manager said the bill was an unnecessary intrusion by the state.

"If there's something that the person who crafted this thinks needs to be fixed, we need to fix it," said Peter Kristian, manager of Hilton Head Plantation's property owners association. "But this may be using a sledgehammer to hit a gnat."

A spokeswoman for the Secretary of State's office said reviewing every document for the homeowners associations registered on the office's list of incorporated companies would require at least three or four new employees.

"At the very least we'd have to hire another attorney, and maybe two or three more staff persons," said spokeswoman Dona Ayers. "And (legislators are) doing the budget now, and we're looking at another 10 percent cut. We're so busy trying to keep our heads above water with all we have to do now."

But Bales said he did not think the bill would create much extra work for the office. He said most homeowners associations already operate effectively and the bill would cause problems only for the few that do not.

"I don't believe it would overburden the Secretary of State's office," he said. "All these offices, when you ask them to do something, they holler that they'd like to have some more people to do it."

Bales, who is the lone sponsor of the House bill, said he was not sure how much support it would find. The bill, filed Feb. 19, has not yet had a subcommittee hearing.

Jackson, the only sponsor of the Senate bill, could not be reached for comment. The Senate version, filed Feb. 2, also has not been discussed in a subcommittee.

Rep. JoAnne Gilham, R-Hilton Head Island, said she had received several e-mails from island community associations about the bill, which she called "onerous" and does not support.

"It's in subcommittee, and I'm not seeing it moving at all," she said.

"It seems like it would overburden not only the community associations, but the Secretary of State's office, too."

Contact Ashley Fletcher at 706-8144 or .

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