H 3788 Session 109 (1991-1992)
H 3788 General Bill, By C.L. Sturkie, M.O. Alexander, R.L. Altman, J.J. Bailey,
K.E. Bailey, B.O. Baker, R.A. Barber, J.M. Baxley, D.M. Beasley, L.E. Bennett,
Boan, G.A. Brown, H. Brown, J. Brown, D.M. Bruce, P.M. Burch, C.D. Chamblee,
H.H. Clyborne, J.D. Cole, Cooper, R.S. Corning, Elliott, Fair, J.G. Felder,
R.C. Fulmer, L.E. Gentry, S.E. Gonzales, H.M. Hallman, J.L. Harris, Harrison,
Harvin, B.H. Harwell, Haskins, Hayes, B.L. Hendricks, J.H. Hodges, D.N. Holt,
T.E. Huff, J.C. Johnson, J.W. Johnson, Keegan, W.P. Keesley, K.G. Kempe,
H.H. Keyserling, J.R. Klapman, Koon, Littlejohn, C.V. Marchbanks, Martin,
J.T. McElveen, A.C. McGinnis, M. McLeod, D.E. McTeer, Meacham, Neilson, Quinn,
J. Rama, Rhoad, T.F. Rogers, I.K. Rudnick, Sharpe, R. Smith, Townsend, Vaughn,
C.Y. Waites, D.C. Waldrop, C.C. Wells, J.M. White, Wilkes, D.A. Wright and
R.M. Young
A Bill to amend Title 27, Code of Laws of South Carolina, 1976, relating to
property and conveyances, by adding Chapter 30 so as to enact the South
Carolina Condominium Act; to amend Section 16-1-10, relating to crimes
classified as felonies, so as to add failure of a condominium developer to
properly handle escrow funds; and to repeal Chapter 31, Title 27 relating to
to the Horizontal Property Act.
04/09/91 House Introduced and read first time HJ-5
04/09/91 House Referred to Committee on Judiciary HJ-6
A BILL
TO AMEND TITLE 27, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO PROPERTY AND CONVEYANCES, BY
ADDING CHAPTER 30 SO AS TO ENACT THE SOUTH
CAROLINA CONDOMINIUM ACT; TO AMEND SECTION 16-1-10,
RELATING TO CRIMES CLASSIFIED AS FELONIES, SO AS TO
ADD FAILURE OF A CONDOMINIUM DEVELOPER TO
PROPERLY HANDLE ESCROW FUNDS; AND TO REPEAL
CHAPTER 31, TITLE 27 RELATING TO THE HORIZONTAL
PROPERTY ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"CHAPTER 30
South Carolina Condominium Act
Article 1
General Provisions
Section 27-30-10. This chapter may be cited as the `South Carolina
Condominium Act'.
Section 27-30-20. The purpose of this chapter is to recognize the
condominium form of ownership of real property, and to establish
procedures for the creation, sale, and operation of condominiums. Every
condominium created and existing in this State is subject to the
provisions of this chapter.
Section 27-30-30. As used in this chapter unless the context
otherwise requires:
(1) `Assessment' means a share of the funds assessed against the
unit owner for common expenses.
(2) `Association' means the corporate entity responsible for the
operation of a condominium.
(3) `Association property' includes real and personal property in
which title or ownership is vested in the association for the use and
benefit of its members.
(4) `Board of administration' or `board' means the board of
directors or other representative body responsible for administration of
the association.
(5) `Bylaws' means the bylaws adopted by the association.
(6) `Commission' means the Real Estate Commission of South
Carolina established pursuant to Chapter 57, Title 40.
(7) `Commissioner' means the chief executive officer appointed
by the Real estate Commission of South Carolina.
(8) `Common elements' means the portions of the condominium
property not included in the units.
(9) `Common expenses' means all expenses and assessments
properly incurred by the association for the condominium.
(10) `Common surplus' means the receipts of the association
collected on behalf of the condominium including, but not limited to,
assessments, rents, profits, and revenues on account of the common
elements in excess of the common expenses.
(11) `Condominium' means ownership of real property created
pursuant to this chapter comprised of units that may be owned by one or
more persons, and in which there is an undivided share in common
elements appurtenant to each unit.
(12) `Condominium parcel' means a unit and the undivided share
in the common elements appurtenant to the unit.
(13) `Condominium property' means the land, leasehold, and
personal property subject to condominium ownership, whether or not
contiguous, and improvements, easements, and rights appurtenant to the
land, leasehold, or personal property intended for use in connection with
the condominium.
(14) `Conspicuous type' means type in bold face capital letters no
smaller than the largest type on the page on which it appears.
(15) `Declaration' or `declaration of condominium' means the
instrument by which a condominium is created.
(16) `Developer' means a person who creates a condominium or
offers condominium parcels for sale or lease in the ordinary course of
business. It does not include an owner or lessee of a condominium or
cooperative unit who has acquired his unit for his own occupancy; and
it does not include a cooperative association creating a condominium by
converting an existing residential cooperative after control of the
association has been transferred to the unit owners if following the
conversion, the unit owners are the same persons who were unit owners
of the cooperative and no units are offered for sale or lease to the public
as part of the conversion plan.
(17) `Land' means the surface of a legally described parcel of real
property including the air space above and the subterranean space below
the surface unless otherwise defined or specified in the declaration and
whether separate from or including the surface. It may mean all or any
portion of the air space or subterranean space between two legally
identifiable points and may exclude the surface of a parcel of real
property and may mean any combination of these, whether or not
contiguous.
(18) `Limited common elements' means those common elements
reserved for the use of one or more condominium units to the exclusion
of other units, as specified in the declaration.
(19) `Operation' or `operation of the condominium' includes the
administration and management of the condominium property.
(20) `Rental agreement' means a written agreement or an oral
agreement if for less duration than one year, providing for the use and
occupancy of the premises.
(21) `Residential condominium' means a condominium consisting
of one or more units intended for use as a private temporary or
permanent residence. A condominium is not a residential condominium
if the intended use is primarily commercial or industrial and fewer than
four units are intended to be used as residential housing for maintenance,
managerial, janitorial, or other operational condominium staff. If a
condominium is a residential condominium but contains units intended
for commercial or industrial use, then the condominium is not a
residential condominium with respect to those units not intended for or
used for private residence.
(22) `Special assessment' means an assessment levied against unit
owners other than the assessment required by an annual budget.
(23) `Time share interest' means an interest in a unit in which the
exclusive right of use, possession, or occupancy of the unit circulates
among the owners of the time share unit on a periodically recurring
basis. It includes, but may not necessarily be limited to, interest in a
vacation time sharing lease plan, a vacation time sharing ownership
plan, or vacation multiple ownership interests as defined in the South
Carolina Vacation Time Share Plan Act, Section 27-32-10, et seq.
(24) `Time share unit' means a unit in which time share estates
have been created.
(25) `Unit' means a part of the condominium property subject to
exclusive ownership. A unit may be in improvements, land, or land and
improvements, as specified in the declaration.
(26) `Unit owner' or `owner of a unit' means the owner of a
condominium parcel.
(27) `Voting certificate' means a document which designates a
record title owner or the corporate, partnership, or entity representative
to vote on behalf of a condominium unit owned by more than one owner
or by an entity.
(28) `Voting interest' means the voting rights distributed to the
association members.
Section 27-30-40. A power of attorney affecting any aspect of the
operation of a condominium is subject to and must be in compliance
with this chapter, condominium documents, association rules, and other
rules adopted pursuant to this chapter, and covenants, conditions, and
restrictions in force at the time of the execution of the power of attorney.
Section 27-30-50. (A) A condominium must be created in
accordance with this chapter.
(B) A condominium may be created on land owned in fee simple
or held under a lease in compliance with this chapter.
(C) A condominium is created by recording a properly executed
and acknowledged declaration in the public records of the county where
the land is located. All persons, or their lawfully authorized agents, who
have record title to the interest in the land being submitted to
condominium ownership must execute the declaration.
(D) A person who has a record interest in a mortgage encumbering
the interest in the land being submitted to condominium ownership must
execute the declaration or execute, in accordance with the requirements
for a deed, and record a consent to the declaration or an agreement
subordinating their mortgage interest to the declaration.
Section 27-30-60. (A) The declaration creating the
condominium must contain or provide for:
(1) a statement submitting the property to condominium
ownership;
(2) the name by which the condominium property is to be
identified which must include the word `condominium' or be followed
by the words `a condominium';
(3) the legal description of the land and, if a leasehold estate
is submitted to condominium ownership, an identification of the lease;
(4) an identification of each unit by letter, name, number, or
a combination of them, so that no unit may bear the same designation as
any other unit;
(5) a survey of the land showing all existing easements, a
graphic description of the improvements in which units are located, and
a plot plan that, with the declaration, are sufficiently detailed to identify
the common elements, each unit, and their relative locations and
approximate dimensions. The survey, graphic description, and plot plan
may be in the form of exhibits consisting of building plans, floor plans,
maps, surveys, or sketches. If the construction of the condominium is
not substantially completed, there must be a statement to that effect, and
upon substantial completion of construction the developer or the
association shall amend the declaration to include the surveyor's
certificate as required by this item. The declaration may be amended by
referring to the recording data of a survey of the condominium that
complies with the certificate. A certificate of a surveyor authorized to
practice in this State must be included in or attached to the declaration,
the survey, or the graphic description that the construction of the
improvements is substantially complete so that the material, together
with the provisions of the declaration describing the condominium
property, is an accurate representation of the location and dimensions of
the improvements and so that the identification, location, and
dimensions of the common elements and of each unit can be determined
from these materials. Completed units within each substantially
completed building in a condominium development may be conveyed
to purchasers even though other buildings in the condominium are not
substantially completed, provided that all planned improvements
including, but not limited to, landscaping, utility services and access to
the unit, and common element facilities serving the building, as set forth
in the declaration, are completed and the declaration of condominium
is recorded and provided that as to the units being conveyed there is a
certificate of a surveyor as required above, including certification that
all planned improvements, including, but not limited to, landscaping,
utility services and access to the unit, and common element facilities
serving the building in which the units to be conveyed are located have
been completed substantially, and the certificate is recorded with the
original declaration or as an amendment to the declaration. This section
does not require development of improvements and amenities declared
to be included in future phases pursuant to this chapter before conveying
a unit as provided by this item. For the purposes of this item, a
`certificate of a surveyor' means certification by a surveyor in the form
provided in this item and when appropriate may include certification by
an architect or engineer authorized to practice in this State.
Notwithstanding the requirements of substantial completion provided in
this item, nothing in this item prohibits or impairs the validity of a
mortgage encumbering units together with an undivided interest in the
common elements as described in a declaration of condominium
recorded before the recording of a certificate of a surveyor;
(6) the undivided share in the common elements appurtenant
to each unit stated as percentages or fractions which in the aggregate
must equal the whole;
(7) the proportions or percentages and manner of sharing
common expenses and owning common surplus, which for a residential
condominium must be the same as the undivided shares in the common
elements;
(8) the name of the association which must be incorporated;
(9) unit owners' membership and voting rights in the
association;
(10) the documents creating the association attached as an
exhibit;
(11) a copy of the bylaws attached as an exhibit. The validity
of the condominium or title to the condominium parcels is not affected
by defects or omissions in the bylaws;
(12) the creation of a nonexclusive easement for ingress and
egress over streets, walks, and other rights-of-way serving the units of
a condominium, as part of the common elements necessary to provide
reasonable access to the public ways, or a dedication of the streets,
walks, and other rights-of-way to the public. No easement for ingress
and egress may be encumbered by a leasehold or lien other than those
on the condominium parcels, unless:
(a) the lien is subordinate to the rights of unit owners; or
(b) the holder of an encumbrance or leasehold of an
easement has executed and recorded an agreement that the use-rights of
each unit owner will not be terminated as long as the unit owner has not
been evicted because of a default under the encumbrance or lease and
the use-rights of a mortgagee of a unit with title to a unit may not be
terminated;
(13) if time share interests are or may be created in a
condominium unit a statement in conspicuous type must be contained
in the declaration. The degree, quantity, nature, and extent of the
interests must be defined and described in detail including a specific
statement of the minimum duration of the recurring periods of rights of
use, possession, or occupancy that may be created;
(14) other provisions not inconsistent with this chapter.
(B) The declaration may include covenants and restrictions
concerning the use, occupancy, and transfer of the units permitted for
real property. However, the rule against perpetuities may not defeat a
right given a person or entity by the declaration for the purpose of
allowing unit owners to retain reasonable control over the use,
occupancy, and transfer of units.
(C) A person who executes or consents to the execution of a
declaration subjects his interest in the condominium property to the
provisions of the declaration.
(D) All provisions of the declaration are enforceable equitable
servitudes, run with the land, and are effective until the condominium
is terminated.
Section 27-30-70. No time share interest may be created in a
condominium unit except pursuant to provisions in the declaration
expressly permitting the creation of that interest.
Section 27-30-80. (A) When executed in accordance with this
article, a declaration including all exhibits and all amendments may be
recorded as an agreement relating to the conveyance of land.
(B) Graphic descriptions of improvements constituting exhibits to
a declaration must be recorded as a part of a declaration and must be
certified by a surveyor pursuant to this article.
(C) When recording the declaration, the clerk of court, may file
the exhibits of a declaration containing graphic descriptions of
improvements in a separate book and shall indicate the place of filing in
the margin where the declaration is recorded.
(D) If the declaration or the survey or graphic description of the
improvements does not have the required surveyor certificate, the
developer shall deliver to the clerk of court an estimate of the cost of a
final survey or graphic description containing and complying with the
certificate prescribed by this article and shall deposit with the clerk the
sum of money specified in the estimate. The clerk shall hold the money
until an amendment to the declaration is recorded that complies with the
surveyor certificate requirements. At that time the clerk shall pay to the
developer or the association presenting the amendment to the declaration
the sum of money deposited with the clerk without charging for
receiving, holding, or paying out the sum of money other than the fees
required for recording the condominium documents.
Section 27-30-90. (A) A condominium parcel created by the
declaration is a separate parcel of real property even though the
condominium is created on a leasehold.
(B) These appurtenances pass with a condominium unit:
(1) an undivided share in the common elements and common
surplus;
(2) the exclusive right to use a portion of the common
elements as may be provided for in the declaration;
(3) an exclusive easement for the use of the airspace occupied
by the unit and as the unit may lawfully be altered or reconstructed. An
easement in airspace which is vacated is terminated automatically;
(4) membership in the association designated in the
declaration, with full voting rights;
(5) other appurtenances as may be provided in the declaration.
(C) A unit owner is entitled to the exclusive possession of his unit,
subject to the association's right to access pursuant to this article. The
unit owner may use the common elements in accordance with the
purposes for which they are intended, but no use may hinder or encroach
upon the lawful rights of other unit owners.
Section 27-30-100. (A) The undivided share in the common
elements appurtenant to a unit must not be separated from the unit and
passes with the title to the unit, whether or not separately described.
(B) The shares in the common elements appurtenant to a unit may
not be conveyed or encumbered except with the unit.
(C) The shares in the common elements appurtenant to units are
undivided and there may be no action for partition of the common
elements.
Section 27-30-110. (A) `Common elements' includes:
(1) the condominium property not included within the units;
(2) easements through units for conduits, ducts, plumbing,
wiring, and other facilities for furnishing utility services to units and
common elements;
(3) an easement of support in every portion of a unit which
contributes to the building's support;
(4) the property and installations required for furnishing
utilities and other services to more than one unit or to the common
elements.
(B) The declaration may designate other parts of the condominium
property as common elements.
Section 27-30-120. After the declaration is recorded, a
description of a condominium parcel as designated in the declaration and
the recording data identifying the declaration is a sufficient legal
description for all purposes. The description includes all appurtenances
to the unit, whether or not separately described, including, but not
limited to, the undivided share in the common elements appurtenant to
the unit.
Section 27-30-130. (A) (1) If the declaration fails to provide
a method of amendment, all matters in the declaration may be amended
except those described in subsection (D) or (G) if the amendment is
approved by the owners of at least two-thirds of the units.
(2) No provision of the declaration may be revised or amended
by reference to its chapter or number only. Proposals to amend existing
provisions of the declaration must contain the full text of the provision
to be amended; new words must be inserted in the text and underlined;
and words to be deleted must be lined through with hyphens. If the
proposed change is so extensive that this procedure would hinder rather
than assist the understanding of the proposed amendment, it is not
necessary to use underlining and hyphens as indicators of words added
or deleted but a notation must be inserted immediately preceding the
proposed amendment in substantially the following language:
`Substantial rewording of declaration. See provision ______ for present
text'.
(3) Nonmaterial errors or omissions in the amendment process
do not invalidate an otherwise properly promulgated amendment.
(B) Other than amendments made by the developer in accordance
with this chapter and any rights the developer may have in the
declaration to amend without consent of the unit owners, an amendment
must be certified by the association that the amendment was duly
approved by the association or its board of directors. The certification
must include the recording data identifying the declaration and must be
executed in the form required for the execution of a deed. An
amendment by the developer must be in writing, but a certificate of the
association is not required.
(C) An amendment of a declaration is effective when properly
recorded in the public records of the county where the declaration is
recorded.
(D) Unless otherwise provided in the declaration as originally
recorded, no amendment may change the configuration or size of a
condominium unit in a material fashion, materially alter or modify the
appurtenances to the unit, or change the proportion or percentage by
which the owner of the parcel shares the common expenses and owns the
common surplus unless the record owner of the unit and all record
owners of liens on the unit join in the execution of the amendment and
unless all the record owners of all other units approve the amendment.
(E) If through a scrivener's errors it appears that a unit has not been
designated as owning an appropriate undivided share of the common
elements or does not bear an appropriate share of the common expenses;
or that all the common expenses, interest in the common surplus, or all
of the common elements in the condominium have not been distributed
in the declaration so that the sum total of the shares of common elements
which have been distributed or the sum total of the shares of the
common expenses or ownership of common surplus fails to equal one
hundred percent; or that more than one hundred percent of common
elements, common expenses, or ownership of the common surplus have
been distributed, the error may be corrected by filing an amendment to
the declaration approved by the board of administration or a majority of
the unit owners.
(F) The common elements designated by the declaration may be
enlarged by an amendment to the declaration. The amendment must de-
scribe the interest in the property and must submit the property to the
terms of the declaration. The amendment must be approved and
executed as provided in this section. The amendment divests the
association of title to the land and vests title in the unit owners as part
of the common elements, without naming the unit owners and without
further conveyance, in the same proportion as the unit owners' undivided
shares in the common elements that are appurtenant to the units they
own.
(G) Unless otherwise provided in the declaration as originally
recorded, no amendment to the declaration may permit time share
interests to be created in a unit of the condominium unless the record
owner of each unit of the condominium and the record owners of liens
on each unit of the condominium join in the execution of the
amendment.
(H) If there is an omission or error in a declaration of condomin-
ium or in any other document required to establish the condominium, the
association may correct the error or omission by an amendment to the
declaration or other document in the manner provided in the declaration
to amend the declaration or if none is provided, by vote of a majority of
the voting interests. The amendment is effective when passed,
approved, certified, and recorded as provided in this article. This
amendment procedure may not be used if the amendment would affect
property rights of unit owners materially or adversely unless the
affected unit owners consent in writing.
(I) If there is an omission or error in a declaration or other document
required to establish the condominium which would affect the valid
existence of the condominium and which may not be corrected by the
amendment procedures in the declaration or this chapter, a unit owner
in the condominium or the association may bring an action in the circuit
court to correct the error or omission, and the action may be a class
action. The court may require that one or more methods of correcting
the error or omission be submitted to the unit owners to determine the
most acceptable correction. All unit owners, the association, and the
mortgagees of a first mortgage of record must be joined as parties to the
action. Service of process on unit owners may be by publication, but the
plaintiff must furnish every unit owner not personally served with a copy
of the petition and final decree of the court by certified mail, return
receipt requested, at the unit owner's last known residence address. If
an action is not brought within three years of the filing of the documents
forming the condominium, a condominium is considered created
whether or not the documents substantially comply with this chapter.
However, at any time an action may be brought pursuant to this
subsection to correct the document or other permissible methods of
amendment may be utilized to correct the errors or omissions.
(J) The declarations, bylaws, and common elements of two or more
independent condominiums of a single complex may be merged to form
a single condominium upon the approval of the voting interest of each
condominium as is required by the declaration for modifying the
appurtenances to the units or changing the proportion or percentages by
which the owners of the parcel share the common expenses and own the
common surplus; upon the approval of all record owners of liens; and
upon the recording of new or amended articles of incorporation,
declarations, and bylaws.
Section 27-30-140. (A) The association is responsible for the
operation of the condominium, and an association may operate more
than one condominium. The unit owners must be the shareholders or
members of the association, and the officers and directors of the
association have a fiduciary relationship to the unit owners.
(B) A director of the association is presumed to have assented to
action taken at a board meeting at which he was present unless he votes
against or abstains from voting on the action because of a stated conflict
of interest.
(C) A unit owner may not act for the association by reason of
being a unit owner.
Section 27-30-150. (A) The powers and duties of the association
include those contained in this section, in the condominium declaration
and bylaws, and in the South Carolina Business Corporation Act of
1988, as applicable, if not inconsistent with this chapter.
(B) The association may contract, sue, or be sued. For these
purposes, the powers of the association include, but are not limited to,
the maintenance, management, and operation of the condominium
property. After control of the association is obtained by unit owners,
excluding the developer, the association may institute, maintain, settle,
or appeal actions or hearings in its name on behalf of all unit owners
concerning matters of common interest, including, but not limited to, the
common elements; the roof and structural components of a building or
other improvements; mechanical, electrical, and plumbing elements
serving an improvement or a building; representations of ad valorem
taxes on commonly used facilities and on units; and may defend actions
in eminent domain or bring inverse condemnation actions. If the
association has the authority to maintain a class action, the association
may be joined in an action as representative of that class on matters for
which the association could bring a class action. Nothing in this
subsection limits a statutory or common-law right of an individual unit
owner or class of unit owners to bring an action which may otherwise be
available.
(C) The association may make and collect assessments and lease,
maintain, repair, and replace the common elements; however, the
association may not charge a use fee against a unit owner for the use of
common elements or association property unless otherwise provided for
in the declaration of condominium or by a majority vote of the
association or unless the charges relate to expenses incurred by an owner
having exclusive use of the common elements or association property.
(D) The association has the irrevocable right of access to each unit
during reasonable hours when necessary for the maintenance, repair, or
replacement of common elements or for making emergency repairs
necessary to prevent damage to the common elements or to another unit.
(E) An association may operate residential condominiums in a
phase project as though it were a single condominium for purposes of
financial matters, including budgets, assessments, accounting,
recordkeeping, and similar matters, if provision is made for the
consolidated operation in the declarations of each condominium as
initially recorded or in the bylaws as initially adopted. Common
expenses for residential condominiums in a phase project operated by a
single association may be assessed against all unit owners in the project
pursuant to the proportions or percentages established in the declarations
as initially recorded or in the bylaws as initially adopted, subject to the
limitations of Sections 27-30-280 and 27-30-830.
(F) The association may acquire title to property or otherwise hold
property for the use and benefit of its members.
(G) The association may purchase land or a recreation lease upon
the approval of the voting interest as required by the declaration. If the
declaration makes no provision for acquisition of the land or recreation
lease, the vote must be that required to amend the declaration to permit
the acquisition.
(H) The association may purchase units in the condominium and
acquire, hold, lease, mortgage, and convey them unless prohibited by the
declaration, articles of incorporation, or bylaws of the association.
(I) Unless prohibited by the declaration, the association, without the
joinder of any unit owners, may grant, modify, or move an easement if
the easement crosses or constitutes part of the common elements. This
subsection does not authorize the association to grant, modify, or move
an easement crossing the property of anyone except the unit owners or
created in whole or in part for the use of anyone except the unit owners
without their consent or approval as required by law or the instrument
creating the easement. Nothing in this subsection effects the powers
enumerated in subsection (B) or the minimum easement requirements
that must be included in the declaration.
(J) An association may enter into agreements to acquire leaseholds,
memberships, and other possessory or use interests in land and facilities
such as country clubs, golf courses, marinas, and other recreational
facilities whether or not the land or facility is contiguous to the
condominium land if they are intended to provide enjoyment, recreation,
or other use or benefit to the unit owners. These leaseholds,
memberships, and other possessory or use interests existing or created
at the time of recording the declaration must be stated and fully
described in the declaration. Subsequent to the recording of the
declaration the association may not acquire or enter into agreements
acquiring a leasehold, membership, or other possessory or use interest
except as authorized by the declaration. The declaration may provide
that the rental, membership fees, operations, replacements, and other
expenses are common expenses, may impose covenants and restrictions
concerning their use, and may contain other provisions not inconsistent
with this chapter.
Section 27-30-160. (A) The association must maintain adequate
insurance to protect the association, the association property, and the
condominium property required to be insured by the association
pursuant to subsection (B). An association or group of associations may
self-insure for claims against the association, the association property,
and the condominium property required to be insured by an association
in accordance with Title 38. A copy of each insurance policy must be
made available for inspection by unit owners at reasonable times.
(B) A hazard policy issued to protect a condominium building
must provide that the word `building' wherever used in the policy
includes, but is not necessarily limited to, fixtures, installations or
additions comprising that part of the building within the unfinished
interior surfaces of the perimeter walls, floors, and ceilings of the
individual units initially installed, or replacements of like kind or
quality, in accordance with the original plans and specifications or as
they existed at the time the unit was conveyed initially if the original
plans and specifications are not available. However, unless the
association is required by the declaration to provide coverage, `building'
does not include floor coverings, wall coverings, or ceiling coverings.
The unit owners must be considered additional insureds under coverage
provided in accordance with this subsection.
(C) An insurance policy issued to an individual unit owner must
provide that the coverage is excess over the amount recoverable under
any other policy covering the same property without rights of
subrogation against the association.
(D) A notice must be mailed by the association to unit owners at
least forty-five days before the effective date of renewal of or
amendment to the association's coverage which reflects changes
authorized by Title 38 and must advise the members of any change in
insurance coverage to be provided by the association, including a
description of the property previously covered which will no longer be
covered and the effective date of the change.
Section 27-30-170. (A) These constitute the official records of the
association and, if applicable, must be maintained by the association:
(1) a copy of the plans, permits, warranties, and other items
the developer must relinquish when the unit owners assume control of
the association;
(2) a copy of the recorded declaration of condominium of each
condominium operated by the association and of each amendment to
each declaration;
(3) a copy of the recorded bylaws of the association and of
each amendment to the bylaws;
(4) a certified copy of the articles of incorporation of the
association or other documents creating the association and of each
amendment;
(5) a copy of the current rules of the association;
(6) the minutes of meetings of the association, the board of
directors, and unit owners, which must be retained for at least seven
years;
(7) a current roster of all unit owners and their mailing
addresses, unit identifications, voting certifications, and, if known,
telephone numbers;
(8) all current insurance policies of the association and
condominiums operated by the association;
(9) a current copy of any management agreement, lease, other
contract to which the association is a party or under which the
association or the unit owners have an obligation or responsibility;
(10) bills of sale or transfer for all property owned by the
association;
(11) accounting records for the association and separate
accounting records for each condominium the association operates.
Accounting records must be maintained in accordance with good
accounting practices and retained at least seven years. These records
must include, but are not limited to:
(a) accurate, itemized, and detailed records of all receipts and
expenditures;
(b) a current account and a monthly, bimonthly, or
quarterly statement of the account for each unit designating the name of
the unit owner, the due date and amount of each assessment, the amount
paid upon the account, and the balance due;
(c) all audits, reviews, accounting statements, and financial
reports of the association or condominium;
(d) all contracts for work to be performed. Bids for work
to be performed must be considered official records and must be
maintained for one year;
(12) ballots, sign-in sheets, voting proxies, and all other papers
relating to elections, which must be maintained for one year from the
date of the election;
(13) all rental records, when the association is acting as agent
for the rental of units.
(B) The official records of the association must be maintained in
the county in which the condominium is located or within fifty miles of
the property if maintained in another county.
(C) The official records of the association are open to inspection
at all reasonable times by any association member or the authorized
representative of a member. The right to inspect the records includes the
right to make or obtain copies at the reasonable expense, if any, of the
association member. Failure to permit inspection of the association
records entitles a person prevailing in an enforcement action to recover
reasonable attorney's fees from the person in control of the records who,
directly or indirectly, knowingly denied access to the records for
inspection.
Section 27-30-180. (A) Within sixty days following the end of the
fiscal or calendar year or annually on a date as provided in the bylaws
of the association, the board of administration of the association shall
mail or furnish by personal delivery to each unit owner a complete
financial report of actual receipts and expenditures for the previous
twelve months. The report must include receipt amounts by accounts
and receipt classifications and must include expense amounts by
accounts and expense classifications, including, if applicable, but not
limited to:
(1) costs for security;
(2) professional and management fees and expenses;
(3) taxes;
(4) costs for recreation facilities;
(5) expenses for refuse collection and utility services;
(6) expenses for lawn care;
(7) costs for building maintenance and repair;
(8) insurance costs;
(9) administrative and salary expenses; and
(10) general, maintenance, and depreciation reserves.
(B) The commission shall adopt regulations which may require the
association to provide the unit owners with a complete set of financial
statements for the preceding fiscal year in lieu of the financial report
required by subsection (A). The financial statements must be delivered
within ninety days following the end of the previous fiscal year or
annually on another date as provided by the bylaws. The commission
regulations may require that financial statements be compiled,
reviewed, or audited, and must take into consideration the accounting
principles, policies, and standards that the commission adopts. The
requirement to have the financial statements compiled, reviewed, or
audited does not apply to an association when a majority of the voting
interests of the association present at a called meeting of the association
have waived this requirement for a given fiscal year. The meeting must
be held not less than thirty days before the end of the fiscal year, and the
waiver is effective for only one fiscal year. This subsection does not
apply to a condominium which consists of less than fifty-one units.
Section 27-30-190. (A) The operation of the association must be
governed by the association bylaws, which must be included as an
exhibit to the recorded declaration of each condominium operated by the
association. No amendment to the bylaws is valid unless recorded with
a reference to the amendment noted on the first page in the public
records where the declaration of each condominium operated by the
association is recorded.
(B)(1) The method for amending the bylaws must be stated in the
bylaws. If not included, the bylaws may be amended by approval of the
owners of at least two-thirds of the voting interests.
(2) No bylaws may be revised or amended by reference to its
chapter or number only. Proposals to amend existing bylaws must
contain the full text of the bylaws to be amended; new words must be
inserted in the text underlined, and words to be deleted must be lined
through with hyphens. It is not necessary to use this procedure if the
proposed change is so extensive that it would hinder rather than assist
the understanding of the proposed amendment. Instead, a notation must
be inserted immediately preceding the proposed amendment in
substantially stating: `Substantial rewording of bylaw. See bylaw ___
for present text.'
(3) Nonmaterial errors or omissions in the bylaw amendment
process do not invalidate an otherwise properly promulgated
amendment.
Section 27-30-200. The association bylaws must provide for the
matters contained in this section and if these matters are not included,
they are deemed to be a part of the bylaws:
(1) The form of administration of the association must be
described, indicating the title of the officers and board of administration
and specifying the powers, duties, manner of selection and removal, and
compensation, if any, of officers and boards. In the absence of this
provision the board of administration must be composed of five
members, except in the case of a condominium which has less than six
units, in which case in a not- for-profit corporation the board shall
consist of at least three members. In the absence of provisions to the
contrary in the bylaws, the board officers must be a president, a
secretary, and a treasurer, who shall perform the duties customarily
performed by officers of corporations. Unless prohibited in the bylaws,
the board of administration may appoint other officers and designate
duties it considers appropriate. Unless otherwise provided in the
bylaws, the officers shall serve without compensation and at the
pleasure of the board.
(2)(a) Unless otherwise provided in the bylaws, a majority of
the voting interests is required for a quorum. Action may be taken by
owners of a majority of the voting interests represented at a meeting at
which a quorum is present. Unit owners may vote by proxy.
(b) A proxy given is effective only for the specific meeting
for which it was given originally and any lawfully adjourned meetings
thereof. In no event may a proxy be valid for longer than ninety days
after the date of the first meeting for which it was given. A proxy is
revocable at the pleasure of the unit owner executing the proxy.
(3) Meetings of the board of administration must be open to
all unit owners. Adequate notice of meetings must be posted
conspicuously on the condominium property at least forty-eight hours
in advance except in an emergency. Notice of a meeting at which
assessments against unit owners are to be considered for any reason
must specifically contain a statement that assessments will be considered
and the nature of the assessments.
(4)(a) A meeting of the unit owners must be held annually.
Unless the bylaws provide otherwise, a vacancy on the board of
administration caused by the expiration of a director's term must be
filled by electing a new board member. If there is no provision in the
bylaws for terms of the members of the board, the terms expire upon the
election of their successors at the annual meeting. The bylaws may not
restrict a nomination from the floor for board membership.
(b) The bylaws must provide the method of calling
meetings of unit owners, including annual meetings. Written notice
must be given to each unit owner at least fourteen days before the
annual meeting and must be posted in a conspicuous place on the
condominium property at least fourteen days before the annual meeting.
Unless a unit owner waives in writing the right to receive notice of the
annual meeting by mail, the notice of the annual meeting must be sent
by mail to each unit owner. An officer of the association shall provide
an affidavit to be included in the official records of the association
affirming that a notice of the association meeting was mailed or hand
delivered in accordance with this subitem to each unit owner at the
address last furnished to the association.
(c) Approval by unit owners required by this chapter, the
declaration, or bylaws must be obtained at a meeting of unit owners
called in accordance with this chapter and is subject to requirements of
this chapter or the condominium documents relating to unit owner
action, except that unit owners may take action by written agreement,
without meetings, on matters for which action by written agreement
without meetings is expressly allowed by the bylaws, declaration, or any
provision of law.
(d) Unit owners may waive notice of specific meetings if
allowed by the bylaws, declaration, or any provision of law.
(5) The board of administration shall mail a meeting notice
and copies of the proposed annual budget of common expenses to the
unit owners at least fourteen days before the meeting at which the
budget will be considered. If the bylaws or declaration provides that the
budget may be adopted by the board, the unit owners must be given
written notice of the time and place of the meeting of the board of
administration at which the budget will be considered. The meeting
must be open to the unit owners. If an adopted budget requires
assessments against the unit owners in a fiscal or calendar year which
exceed one hundred fifteen percent of the assessments for the preceding
year, the board, upon written request of ten percent of the voting
interests, shall call a special meeting of the unit owners within thirty
days and with at least ten days' written notice to each unit owner. At
the special meeting, unit owners shall consider and adopt a budget.
Unless the bylaws require a larger vote, the adoption of the budget
requires at least a majority vote of all the voting interests. The board of
administration may propose a budget to the unit owners at a meeting of
members or in writing, and if the budget or proposed budget is
approved by the unit owners at the meeting or by a majority of all the
voting interests in writing, the budget must be adopted. If a meeting of
the unit owners has been called and a quorum is not present or a
substitute budget is not adopted by the unit owners, the budget adopted
by the board of directors must go into effect as scheduled. In
determining whether assessments exceed one hundred fifteen percent of
similar assessments in prior years, authorized provisions for reasonable
reserves for repair or replacement of the condominium property, and
anticipated expenses by the condominium association which are not
anticipated to be incurred on a regular or annual basis, or assessments
for betterment to the condominium property must be excluded from the
computation. However, as long as the developer is in control of the
board of administration, the board may not impose an assessment for any
year greater than one hundred fifteen percent of the prior fiscal or
calendar year's assessment without approval of a majority of all the
voting interests.
(6)(a) The proposed annual budget of common expenses must
be detailed and shall show the amounts budgeted by accounts and
expense classifications, including, if applicable, but not limited to, those
owner expenses which must be included in a prospectus.
(b) In addition to annual operating expenses, the budget
must include reserve accounts for capital expenditures and deferred
maintenance for any item for which the deferred maintenance expense
or replacement cost is greater than ten thousand dollars. These accounts
must include, but are not limited to, roof replacement, building painting,
and pavement resurfacing. The amount to be reserved must be
computed by a formula based upon estimated life and estimated
replacement cost or deferred maintenance expense of each reserve item.
This subitem does not apply to budgets in which the members of an
association, by a vote of the majority of the members present at a duly
called meeting of the association, have determined for a fiscal year to
provide no reserves or reserves less than those required by this subitem.
If a meeting of the unit owners is called to determine whether or not to
provide reserves and if no decision is reached or a quorum is not present
the reserves included in the budget must go into effect.
(7) The manner of collecting a unit owner's share of the
common expenses must be stated in the bylaws. Assessments must be
made against units at least quarterly in an amount at least equal to that
required to provide funds in advance for payment of the anticipated
current operating expenses and for the unpaid operating expenses
previously incurred. Nothing in this item precludes the right of an
association to accelerate assessments of an owner delinquent in proper
payment of common expenses. Accelerated assessments are due and
payable on the date the claim of lien is filed. Accelerated assessments
include the amounts due for the remainder of the budget year in which
the claim of lien was filed.
(8) No charge may be made by the association or any body of
the association in connection with the sale, mortgage, lease, sublease, or
other transfer of a unit unless the association is required to approve the
transfer and a fee for the approval is provided for in the declaration,
articles, or bylaws. The fee may be preset, but in no event may the fee
exceed fifty dollars an applicant. A husband and a wife or parent and a
dependent child are considered one applicant. If the lease or sublease is
a renewal with the same lessee or sublessee, no fee may be charged.
When an association has the authority, nothing in this item may be
construed to prohibit the association from requiring a security deposit in
an amount not to exceed the equivalent of one month's rent as a
condition to permitting the letting or renting of a unit. The security
deposit must be placed in an escrow account maintained by the
association to protect against damages to the common elements or
association property. Within fifteen days after a tenant vacates the
premises, the association shall refund the full security deposit or give
written notice to the tenant of a claim made against the deposit.
Disputes under this item must be handled in the same manner as disputes
concerning security deposits under the South Carolina Residential
Landlord and Tenant Act, Chapter 40 of Title 27.
(9) There must be a provision for fidelity bonding in the
principal sum of at least fifty thousand dollars for each person who
controls or disburses funds of the association. The association shall bear
the cost of bonding unless otherwise provided by contract between the
association and an independent management company. This item does
not apply to an association operating a condominium consisting of less
than fifty-one units; however, a condominium association may bond a
person who controls or disburses funds of the association and the
association shall bear the cost of bonding unless otherwise provided by
contract between the association and an independent management
company.
(10)(a) Subject to the provisions of Article 3, a member of the
board of administration may be recalled and removed from office with
or without cause by the vote or agreement in writing by a majority of all
the voting interests. A special meeting of the unit owners to recall a
member or members of the board of administration may be called by ten
percent of the voting interests giving notice of the meeting as required
for a meeting of unit owners, and the notice must state the purpose of the
meeting.
(b) If the recall is approved by a majority of all voting
interests by a vote at the meeting, the recall is effective immediately and
the recalled member of the board of administration shall turn over to the
board all records of the association in their possession within
seventy-two hours after the meeting.
(c) If the proposed recall is by written agreement by a majority
of all voting interests, the agreement must be served on the association
by certified mail. The board of administration shall call a meeting of the
board within seventy-two hours after receiving the agreement and shall
certify the written agreement to recall the member, in which case the
member must be recalled effective immediately and shall turn over to the
board within seventy-two hours all records of the association in their
possession or proceed as described in subitem (d).
(d) If the board does not certify the written agreement to
recall the member of the board or if the recall by a vote at a meeting is
disputed within seventy-two hours, the board shall file with the
commission for binding arbitration pursuant to this chapter. For the
purposes of this section, the unit owners who voted at the meeting or
who executed the written agreement constitute one party under the
petition for arbitration. If the arbitrator certifies the recall of the member
of the board, the recall is effective upon service of the final order of
arbitration upon the association. If the association fails to comply with
the order of the arbitrator, the commission may take action pursuant to
its powers under this chapter. A member who is recalled shall deliver
to the board all records of the association in their possession within
seventy-two hours of the effective date of the recall.
(11) The bylaws must contain a provision for voluntary binding
arbitration of internal disputes arising from the operation of the
condominium among developers, unit owners, associations, and their
agents and assigns.
Section 27-30-210. The association bylaws may provide:
(1) a method of adopting and amending administrative rules
and regulations governing the details of the operation and use of the
common elements;
(2) restrictions on and requirements for the use, maintenance,
and appearance of the units and the use of the common elements;
(3) other provisions not inconsistent with this chapter or with
the declaration.
Section 27-30-220. If an association fails to fill vacancies on the
board of administration sufficient to constitute a quorum in accordance
with the bylaws, a unit owner may petition the circuit court for the
appointment of a receiver to manage the affairs of the association. At
least thirty days before filing the petition, the unit owner shall mail to
the association and post in a conspicuous place on the condominium
property a notice describing the intended action. If the association still
fails to fill the vacancies, the unit owner may proceed with the petition.
If a receiver is appointed, the association is responsible for the salary of
the receiver, court costs, and attorney's fees. The receiver has all powers
and duties of a constituted board of administration and shall serve until
the association fills vacancies on the board sufficient to constitute a
quorum.
Section 27-30-230. (A) Maintenance of the common elements is
the responsibility of the association. The declaration may provide that
limited common elements must be maintained by those entitled to use
the limited common elements.
(B) There must be no material alteration or substantial additions
to the common elements except as provided in the declaration.
(C) A unit owner may not make an alteration to his unit which
would remove a portion of, or make an addition to, the common
elements or do anything which would affect adversely the safety or
soundness of the common elements or a portion of the condominium
property maintained by the association.
(D) A unit owner may display one portable, removable United
States flag in a respectful way regardless of the declaration, rules, or
requirements concerning flags or decorations.
Section 27-30-240. (A) Common expenses include the expenses
for the operation, maintenance, repair, or replacement of the common
elements, costs of carrying out the powers and duties of the association,
and any other expenses designated as common expenses by this chapter,
the declaration, the documents creating the condominium, or the
bylaws. Common expenses also include reasonable transportation
services, insurance for directors and officers, road maintenance and
operation expenses, in-house communications, and security services,
reasonably related to the general benefit of the unit owners even if the
expenses do not attach to the common elements or property of the
condominium. However, these common expenses must have been
services or items provided from the date the control of the board of
administration was transferred from the developer to the unit owners or
must be services or items provided for in the condominium documents
or bylaws.
(B) Funds for the payment of common expenses must be collected
by assessments against unit owners in the proportions or percentages
provided in the declaration. In a residential condominium a unit owner's
share of the common expenses must be in the same proportions as his
ownership interest in the common elements.
(C) Common surplus is owned by unit owners in the same shares
as their ownership interest in the common elements.
Section 27-30-250. (A)(1) A unit owner is liable for all
assessments which are due while he is the unit owner regardless of how
his title has been acquired, including purchase at a judicial sale. Except
as provided for in Section 27-30-280, the grantee is jointly and severally
liable with the grantor for all unpaid assessments against the grantor for
his share of the common expenses up to the time of transfer of title
without prejudice to any right the grantee may have to recover from the
grantor the amounts paid by the grantee.
(2) Each owner of a time share interest is jointly and severally
liable for the payment of all assessments and other charges levied
against or with respect to that unit pursuant to the declaration or bylaws,
except to the extent that the declaration or bylaws may provide to the
contrary.
(B) The liability for assessments may not be avoided by waiver of
the use or enjoyment of any common element or by abandonment of the
unit for which the assessments are made.
(C) Assessments and installments on assessments not paid when
due bear interest at the rate provided in the declaration from the due date
until paid. This rate may not exceed the rate allowed by law and if no
rate is provided in the declaration, interest accrues at the rate of eighteen
percent a year.
(D) The specific purpose of a special assessment approved in
accordance with the condominium documents must be contained in a
written notice of the assessment sent or delivered to each unit owner.
The funds collected pursuant to a special assessment must be used only
for the specific purpose set forth in the notice or must be returned to the
unit owners. Upon completion of the specific purpose any excess funds
are considered common surplus.
Section 27-30-260. (A) (1) The association has a lien on each
condominium parcel for unpaid assessments with interest and for
reasonable attorney's fees incurred by the association incidental to the
collection of the assessment or enforcement of the lien. The lien is
effective from and after the recording of a claim of lien in the public
records in the county in which the condominium parcel is located
which states the description of the condominium parcel, the name of the
record owner, the amount due, and the due dates. No lien may continue
for longer than one year after the claim of lien has been recorded unless
within that time an action to enforce the lien is commenced in a court of
competent jurisdiction. The claim of lien secures all unpaid
assessments, interest, costs, and attorney's fees due and which may
accrue subsequent to the recording of the claim of lien and before entry
of a final judgment of foreclosure. A claim of lien must be signed and
acknowledged by an officer or agent of the association. Upon payment
the person making the payment is entitled to a satisfaction of the lien.
By recording a notice in substantially the following form, a unit owner,
his agent, or attorney may require the association to enforce a recorded
claim of lien against his condominium parcel:
NOTICE OF CONTEST OF LIEN
TO: (Name and address of association)
You are notified that the undersigned contests the claim of lien filed
by you on ______________, 19__, and recorded in Book ____ at Page
____, of the public records of ______________ County, South
Carolina, and that the time within which you may file suit to enforce
your lien is limited to 90 days from the date of service of this notice.
Executed this ____ day of _______, 19__.
Signed:__________________________________
(Owner or Attorney)
(B) The clerk of the court shall mail a copy of the recorded notice of
contest to the lien claimant at the address shown in the claim of lien or
most recent amendment to it, shall certify to the service on the face of
the notice, and shall record the notice. Service is complete upon
mailing. After service the association has ninety days in which to file an
action to enforce the lien and, if the action is not filed within the
ninety-day period, the lien is void.
Section 27-30-270. (A) The association may bring an action in its
name to foreclose a lien for assessment in the manner a mortgage of real
property is foreclosed and may also bring an action to recover a money
judgment for the unpaid assessments without waiving any claim of lien.
(B) No foreclosure judgment may be entered until at least thirty
days after the association gives written notice to the unit owner of its
intention to foreclose its lien to collect the unpaid assessments. If this
notice is not given at least thirty days before the foreclosure action is
filed, and if the unpaid assessments, including those coming due after
the claim of lien is recorded, are paid before the entry of a final
judgment of foreclosure, the association may recover attorney's fees or
costs. Notice must be delivered to the unit owner or sent by certified or
registered mail, return receipt requested, addressed to the unit owner at
his last known address; and upon mailing the notice is considered to
have been given, and the court shall proceed with the foreclosure action
and may award attorney's fees and costs as permitted by law. If after
diligent search and inquiry the association is unable to located the unit
owner or a mailing address for the unit owner, the court may proceed
with the foreclosure action and may award attorney's fees and costs as
permitted by law. The notice requirements of this subsection are
satisfied if the unit owner records a Notice of Consent of Lien as
provided in subsection (D). The notice requirements of this subsection
do not apply if an action to foreclose a mortgage on the condominium
unit is pending before any court; if the rights of the association would be
affected by the foreclosure; and if actual, constructive, or substitute
service of process has been made on the unit owner.
(C) If the unit owner remains in possession of the unit and the
claim of lien is foreclosed, the court, in its discretion, may require the
unit owner to pay a reasonable rental for the unit, and the association is
entitled to the appointment of a receiver to collect the rent.
(D) Unless prohibited by the declaration, the documents creating
the association, or its bylaws, the association may purchase the
condominium parcel at the foreclosure sale and may hold, lease,
mortgage, or convey it.
Section 27-30-280. (A) When the mortgagee of a first mortgage
of record or other purchaser of a condominium unit obtains title to the
condominium parcel by a purchase at the public sale resulting from the
first mortgagee's foreclosure judgment in an action in which the
association was properly named as a defendant junior lienholder or if the
declaration provides as a result of a deed given in lieu of foreclosure, the
acquirer of title and his successors and assigns are not liable for the
share of common expenses or assessments attributable to the
condominium parcel or chargeable to the former unit owner of the parcel
which became due before acquiring title as a result of the foreclosure,
unless the share is secured by a claim of lien for assessments that was
recorded prior to the recording of the foreclosed mortgage. The unpaid
share of common expenses or assessments are common expenses
collectible from all of the unit owners, including the acquirer of title and
his successors and assigns. The declaration may provide that the unpaid
share of common expenses may be collected as common expenses of all
unit owners in the case of any mortgage of record and not restricted to
first mortgages of record. A first mortgagee acquiring title to a
condominium parcel as a result of foreclosure or a deed in lieu of
foreclosure may not be excused during the period of ownership from
paying some or all of the common expenses coming due during the
period of ownership, whether or not the parcel is unoccupied.
(B) Within fifteen days after a request by a unit owner or unit
mortgagee, the association shall provide a certificate stating all
assessments and other monies owed to the association by the unit owner
of the condominium parcel. A person other than the owner who relies
upon the certificate must be protected by that certificate.
Section 27-30-290. (A)(1) No unit owner may be excused from
paying his share of the common expenses of a condominium unless all
unit owners are proportionately excused, except as provided in Section
27-30-280 and in the following cases:
(a) If the declaration provides, a developer or other person
who owns condominium units offered for sale may be excused from
paying the share of the common expenses and assessments related to
those units for a stated period of time subsequent to the recording of the
declaration of condominium. The period must terminate no later than
the first day of the fourth calendar month following the month in which
the closing of the purchase and sale of the first condominium unit
occurs. However, the developer shall pay the portion of common
expenses incurred during that period which exceed the amount assessed
against other unit owners.
(b) A developer or other person who owns condominium
units or who has an obligation to pay condominium expenses may be
excused from paying his share of the common expense which would
have been assessed against those units during the period of time that he
has guaranteed to each purchaser in the purchase contract, declaration,
prospectus, or by agreement between the developer and a majority of the
unit owners, excluding the developer, that the assessment for common
expenses of the condominium imposed upon the unit owners would not
increase over a stated dollar amount and has obligated himself to pay
any amount of common expenses incurred during that period and not
produced by the assessments at the guaranteed level receivable from
other unit owners.
(B) If the purchase contract, declaration, prospectus, or agreement
between the developer and a majority of unit owners, excluding the
developer, provides that the developer or another person may be excused
from paying assessments pursuant to subsection (A), no funds which are
receivable from unit purchasers or owners and payable to the association
or collected by the developer on behalf of the association, other than
regular periodic assessments for common expenses as provided in the
declaration and disclosed in the estimated operating budget, may be used
for payment of common expenses before the expiration of the period
during which the developer or other person is excused. This restriction
applies to funds including, but not limited to, capital contributions or
start-up funds collected from unit purchasers at closing.
Section 27-30-300. (A) Unless otherwise provided in the
declaration, the condominium property only may be removed from the
provisions of this chapter by consent of all of the unit owners in
recorded instrument and upon the written consent of all holders of
recorded liens affecting any of the condominium parcels. Upon
recording the instrument stating consent of all the unit owners to
terminate the condominium, the association shall notify the commission
within thirty working days of the termination and the date, the county,
and the book and page number of the public records where the document
was recorded.
(B) Unless otherwise provided in the declaration as originally
recorded or as amended in accordance with this chapter, upon removal
of the condominium property from the provisions of this chapter, the
condominium property is owned in common by the unit owners in the
same undivided shares as each owner previously owned in the common
elements. All liens must be transferred to the undivided share in the
condominium property attributable to the unit originally encumbered by
the lien in its same priority.
(C) The termination of a condominium does not bar the creation
of another condominium affecting all or any portion of the same
property.
Section 27-30-310. In the event of substantial damage to or
destruction of all or a substantial part of the condominium property and
if the property is not repaired, reconstructed, or rebuilt within a
reasonable period of time, a unit owner may petition the court for
equitable relief, including termination of the condominium and a
partition.
Section 27-30-320. (A) The liability of the owner of a unit for
common expenses is limited to the amounts he is assessed for common
expenses in accordance with this chapter, the declaration, and bylaws.
(B) The owner of a unit may be liable personally for the acts or
omissions of the association in relation to the use of the common
elements but only to the extent of his pro rata share of that liability in the
same percentage as his interest in the common elements, and then in no
case may that liability exceed the value of his unit.
(C) In a legal action in which the association may be exposed to
liability in excess of insurance coverage protecting it and the unit
owners, the association shall give notice of the exposure within a
reasonable time to all unit owners, and they have the right to intervene
in the action.
Section 27-30-330. (A) Ad valorem taxes and special assessments
by taxing authorities must be assessed against the condominium parcels
and not upon the condominium property as a whole. No ad valorem tax
or special assessment may be assessed separately against recreational
facilities or other common elements if the facilities or common elements
are owned by the condominium association or are owned jointly by the
owners of the condominium parcels. Each condominium parcel must be
assessed separately for ad valorem taxes and special assessments as a
single parcel. The taxes and special assessments levied against each
condominium parcel constitute a lien upon the condominium parcel
assessed and upon no other portion of the condominium property.
(B) The provisions of a declaration relating to a condominium
parcel which has been sold for taxes or special assessments survive and
are enforceable after the issuance of a tax deed or master's deed, upon
foreclosure of an assessment, a certificate or lien, a tax deed, tax
certificate, or tax lien, to the same extent that they would be enforceable
against a voluntary grantee of the title immediately before the delivery
of the tax deed, master's deed, or clerk's certificate of title.
(C) Condominium property divided into vacation time share
ownership plans must be assessed for purposes of ad valorem taxes and
special assessments as provided in Section 27-32-240.
Section 27-30-340. (A) After recording the declaration and while
the property remains subject to the declaration, no liens of any nature are
valid against the condominium property as a whole except with the
unanimous consent of the unit owners. During this period liens may
arise or be created only against individual condominium parcels.
(B) Labor performed on or materials furnished to a unit may not
be the basis for the filing of a mechanics' lien against the unit or
condominium parcel of a unit owner not expressly consenting to or
requesting the labor or materials. Labor performed on or materials
furnished to the common elements may not be the basis for a lien on the
common elements, but if authorized by the association, the labor is
considered to be performed or the materials are considered to be
furnished with the express consent of each unit owner and may be the
basis for filing a lien against all condominium parcels in the proportions
for which the owners are liable for common expenses.
(C) If a lien is placed against two or more condominium parcels,
each owner may relieve his condominium parcel of the lien as provided
by law or by payment of the proportionate amount attributable to his
condominium parcel. Upon payment the lienor shall release the lien of
record for that condominium parcel.
Section 27-30-350. (A) A lease for use by condominium unit
owners of recreational or other common facilities, irrespective of the
date on which the lease was entered into, is presumed to be
unconscionable if all of the following exist:
(1) The lease was executed by persons none of whom at the
time of the execution of the lease were elected by condominium unit
owners, excluding the developer, to represent their interests.
(2) The lease requires the condominium association or the
condominium unit owners to pay real estate taxes on the subject real
property.
(3) The lease requires the condominium association or the
condominium unit owners to insure buildings or other facilities on the
subject real property against fire or other hazard.
(4) The lease requires the condominium association or the
condominium unit owners to perform maintenance obligations
pertaining to the subject real property or facilities located upon the
subject real property.
(5) The lease requires the condominium association or the
condominium unit owners to pay rent to the lessor for twenty-one years
or more.
(6) The lease provides that failure of the lessee to pay rent due
under the lease creates, establishes, or permits establishment of a lien
upon individual condominium units of the condominium to secure
claims for rent.
(7) The lease requires an annual rental which exceeds
twenty-five percent of the appraised value of the leased property as
improved. For purposes of this item, `annual rental' means the amount
due during the first twelve months of the lease for all units, regardless
of whether the units are occupied or sold during that period, and
`appraised value' means the appraised value placed upon the leased
property the first tax year after the sale of a unit of the condominium.
(8) The lease provides a periodic rental increase based upon
reference to a price index.
(9) The lease or other condominium documents require that
transferees of a condominium unit must assume obligations under the
lease.
(B) The presumption of unconscionability created in this section
may be rebutted by a lessor upon the showing of additional facts and
circumstances to justify and validate what otherwise appears to be an
unconscionable lease under this section. Failure of a lease to contain all
the elements enumerated in subsection (A) does not preclude a
determination of unconscionability of the lease and does not raise a
presumption as to its conscionability. This section does not create a new
cause of action to invalidate a condominium lease but is a statutory
prescription on procedural matters in actions brought on one or more
causes of action existing at the time of the execution of the lease.
Section 27-30-360. The provisions of Title VI of Public Law
96-399, other than the exceptions stated in Section 611 of that act do not
apply in this State.
Section 27-30-370. (A) All common elements, common areas,
and recreational facilities serving a condominium must be available for
their intended use to unit owners. The entity responsible for the
operation of the common elements, common areas, and recreational
facilities may adopt reasonable rules and regulations pertaining to their
use. No entity may restrict unreasonably a unit owner's right to
assemble peaceably or to invite public officers or candidates for public
office to appear and speak in common elements, common areas, and
recreational facilities.
(B) An owner prevented from exercising rights guaranteed by
subsection (A) may bring an action in the county in which the alleged
infringement occurred and upon favorable adjudication, the court must
enjoin the enforcement of any provision contained in the condominium
document or rules which deprives the owner of these rights.
Section 27-30-380. No resident of a condominium unit, whether
tenant or owner, may be denied access to an available franchised or
licensed cable television service. No resident or cable television service
may be required to pay anything of value in order to obtain or provide
service except those charges normally paid for like services by residents
of or providers to single-family homes within the same franchised or
licensed area and except for installation charges as may be agreed to
between the resident and the provider of the service.
Section 27-30-390. The statute of limitations for an action in law or
equity which a condominium association or a cooperative association
may have does not begin to run until the unit owners have elected a
majority of the members of the board of administration.
Section 27-30-400. If a contract or lease between a condominium
unit owner or association and a developer contains a provision allowing
attorney's fees to the developer, the court also shall allow reasonable
attorney's fees to the unit owner or association prevailing in an action
pertaining to the contract or lease.
Section 27-30-410. The South Carolina Real Estate Commission
shall employ full-time arbitrators to conduct the binding arbitration
hearings provided by this chapter. No person may be employed by the
commission as a full-time arbitrator unless the person is a member in
good standing of the South Carolina Bar. The department shall
promulgate regulations governing this arbitration procedure. The
decision of an arbitrator is final, but a decision may not be considered
final agency action. Nothing in this section may be construed to
preclude parties from proceeding in a trial de novo. If a trial de novo is
initiated, the final decision of the arbitrator is admissible in evidence.
A party may seek enforcement of the final decision of an arbitrator in a
court of competent jurisdiction.
Article 2
Rights and Obligations of Developers
Section 27-30-610. (A) Before construction begins on a proposed
condominium development and in the event of default on property taxes
or special assessments against the property or parcel before time of
closing, the developer shall post a bond or place money in escrow
pursuant to this section. The developer may select whether to pose a
bond or place an amount of money in escrow, but if the developer does
not post a bond or deposit the required money in escrow before
beginning construction, the tax collector or his successor in the county
in which the property or parcels lie shall require compliance with this
section. However, the developer is exempt from the requirements of this
section upon furnishing the clerk of court evidence of payment of all
taxes and assessments due on the property or parcel.
(B) One hundred ten percent of the total ad valorem tax liability
against the property or parcel in the year immediately preceding the year
in which construction is proposed to begin must be posted for the bond
or placed in escrow with the clerk of court in the county in which the
property or parcel lies.
(C) No interest may be paid upon a bond posted or money placed
in escrow under the provisions of this section.
Section 27-30-620. (A) If a developer contracts to sell a
condominium parcel and the construction, furnishing, and landscaping
of the property has not been substantially completed in accordance with
the plans, specifications, and representations made by the developer in
the disclosures required by this chapter, the developer shall pay into an
escrow account all payments up to ten percent of the sale price received
by the developer from the buyer. The escrow agent shall give the
purchaser a receipt for the deposit upon request. In lieu of an escrow
account, the commissioner may accept other assurances, including, but
not limited to, a surety bond or an irrevocable letter of credit in an
amount equal to the escrow requirements of this section. Default
determinations and refund of deposits must be governed by the
following provisions:
(1) If a buyer properly terminates the contract pursuant to its
terms or pursuant to this chapter, the funds and interest earned must be
paid to the buyer.
(2) If the buyer defaults on his obligations under the contract
of purchase and sale, the funds must be paid to the developer. Interest
on the funds must be paid to the developer only if the buyer has
executed a separate document allowing interest to be paid to the
developer in compliance with Regulation 105-21.G.
(3) If the contract does not provide for the payment of interest
earned on the escrowed funds and the funds are placed in an interest
bearing account, interest must be paid to the buyer at the closing of the
transaction unless the buyer has executed a separate document allowing
interest to be paid to the developer in compliance with Regulation
105-21.G.
(4) If the funds of a buyer have not been disbursed previously
in accordance with the provisions of this subsection, they may be
disbursed to the developer by the escrow agent at the closing of the
transaction, unless before the disbursement the escrow agent receives
from the buyer written notice of a dispute between the buyer and
developer.
(B) All payments in excess of ten percent of the sale price
pursuant to a contract to purchase a condominium parcel which have
been received by the developer from the buyer before completion of
construction must be held in the escrow account established pursuant to
subsection (A) controlled by an escrow agent and may not be used by
the developer before closing the transaction except as provided in
subsection (C) or except for refund to the buyer. If the money remains
in this special account for more than three months and earns interest, the
interest must be paid as provided in subsection (A).
(C) If the contract for sale of the condominium unit provides and
construction has begun, the developer may withdraw escrow funds
exceeding ten percent of the sale price from the special account required
by subsection (B). The funds may be used for the actual construction
and development of the condominium property in which the unit to be
sold is located. However, no part of these funds may be used for
salaries, commissions, or expenses of salesmen or for advertising
purposes. A contract which permits use of the advance payments for
construction purposes must include the following conspicuously printed
or stamped in boldface type on the first page of the contract and
immediately above the place for the signature of the buyer: ANY
PAYMENT IN EXCESS OF TEN PERCENT OF THE PURCHASE
PRICE MADE TO DEVELOPER BEFORE CLOSING PURSUANT
TO THIS CONTRACT MAY BE USED FOR CONSTRUCTION
PURPOSES BY THE DEVELOPER.
(D) Failure to comply with subsections (A) through (C) renders
the contract voidable by the buyer and, if voided, all sums deposited or
advanced under the contract must be refunded with interest at the highest
rate then being paid on savings accounts, excluding certificates of
deposit, by savings and loan associations in the area in which the
condominium property is located.
(E) If a developer enters into a reservation agreement, the
developer shall pay into an escrow account all reservation deposit
payments. Reservation deposits must be payable to the escrow agent,
who shall give to the prospective purchaser a receipt for the deposit,
acknowledging that the deposit is being held pursuant to the
requirements of this subsection. The funds may be placed in
interest-bearing or noninterest-bearing accounts provided that the funds
must at all reasonable times be available for withdrawal in full by the
escrow agent. The developer shall maintain separate records for each
condominium or proposed condominium for which deposits are being
accepted. Upon written request to the escrow agent by the prospective
purchaser or developer, the funds must be refunded in full immediately
and without qualification to the prospective purchaser and interest must
be paid to the prospective purchaser, unless otherwise provided in the
reservation agreement and consented to by the prospective purchaser in
a separate document in compliance with Regulation 105-21.G. A
reservation deposit may not be released directly to the developer except
as a downpayment on the purchase price simultaneously with or after a
contract is executed. Upon the execution of a unit purchase agreement,
funds paid by the purchaser as a deposit to reserve the unit pursuant to
a reservation agreement, any interest on these funds cease to be subject
to the provisions of this subsection and instead are subject to the
provisions of subsections (A) through (D).
(F) An escrow account required by this section must be
established with a bank, a savings and loan association, an attorney who
is a member of the South Carolina Bar, a real estate broker licensed
under Chapter 57 of Title 40, a title insurer authorized to do business in
this State acting through its employees or a licensed title insurance
agent, or a financial lending institution having a net worth in excess of
five million dollars. The escrow agent may not be located outside the
State unless, pursuant to the escrow agreement, the escrow agent submits
to the jurisdiction of the commission and the courts of this State for any
cause of action arising from the escrow. An escrow agent must be
independent of the developer, and no developer or officer, director,
affiliate, subsidiary, or employee of a developer may serve as escrow
agent. Escrow funds may be invested only in securities of the United
States or of its agencies or in accounts in institutions the deposits of
which are insured by an agency of the United States.
(G) A developer who wilfully fails to comply with this section
concerning establishment of an escrow account, deposits of funds into
escrow, and withdrawal of funds from escrow is guilty of a felony and,
upon conviction, must be fined not less than five thousand dollars or
imprisoned not less than five years, or both. Failure to establish an
escrow account or to place funds in an escrow account is prima facie
evidence of an intentional and purposeful violation of this section.
(H) For purposes of this section `completion of construction'
means issuance of a certificate of occupancy for the entire building or
improvement or the equivalent authorization issued by the governmental
body having jurisdiction, and in a jurisdiction where no certificate of
occupancy or equivalent authorization is issued, it means substantial
completion of construction, finishing, and equipping of the building or
improvements according to the plans and specifications.
Section 27-30-630. (A) The developer is considered to have
granted to the purchaser of each unit an implied warranty of fitness and
merchantability for the following purposes or intended uses:
(1) a three-year warranty on the unit beginning when the
building containing the unit is completed;
(2) a warranty on the personal property that is transferred with
or appurtenant to each unit for the same period as provided by the
manufacturer of the personal property, beginning with the date of
closing of the purchase or the date of possession of the unit, whichever
is earlier;
(3) a three-year warranty on all other improvements for the use
of unit owners beginning with the date of completion of the
improvements;
(4) a warranty on all other personal property for the use of unit
owners which must be the same as that provided by the manufacturer of
the personal property;
(5) a warranty on the roof and structural components of a
building or other improvements and on mechanical, electrical, and
plumbing elements serving improvements on a building, except
mechanical elements serving only one unit, for three years beginning
with the completion of construction of each building or improvement or
for one year after owners, excluding the developer, obtain control of the
association, whichever occurs last, but in no event more than five years;
and
(6) a warranty to the initial purchaser of each unit on all other
property conveyed with a unit for one year from the date of closing of
the purchase or the date of possession, whichever occurs first.
(B) The contractor, subcontractors, and suppliers grant to the
developer and to the purchaser of each unit the following implied
warranties of fitness on the work performed or materials supplied by
them:
(1) a three-year warranty from the date of completion of
construction of a building or an improvement on the roof and structural
components of the building or improvement and on mechanical and
plumbing elements serving a building or an improvement, except
mechanical elements serving only one unit;
(2) a warranty for one year after completion of all construction
on all other improvements and materials.
(C) These warranties are conditioned upon performance of routine
maintenance unless the maintenance is an obligation of the developer or
a developer-controlled association.
(D) These warranties inure to the benefit of each owner and his
successor owners and to the benefit of the developer.
(E) Residential condominiums may be covered by an insured
warranty program underwritten by a licensed insurance company
registered in this State if the warranty program meets the minimum
requirements of this chapter and to the extent that the warranty program
does not meet the minimum requirements of this chapter, these
requirements apply.
(F) For purposes of this section, `completion of a building or
improvement' means issuance of a certificate of occupancy for the entire
building or improvement or the equivalent authorization issued by the
governmental body having jurisdiction, and in jurisdictions where no
certificate of occupancy or equivalent authorization is issued, it means
substantial completion of construction, finishing, and equipping of the
building or improvement according to the plans and specifications.
Article 3
Rights and Obligations of Associations
Section 27-30-810. (A) When unit owners, excluding the
developer, own at least fifteen percent of the units in a condominium to
be operated by an association, these unit owners are entitled to elect no
less than one-third of the members of the board of administration of the
association. Unit owners, excluding the developer, are entitled to elect
no less than a majority of the members of the board of administration of
an association when the first of these occurs:
(1) three years after fifty percent of the units to be operated by
the association have been conveyed to purchasers;
(2) three months after ninety percent of the units to be
operated by the association have been conveyed to purchasers;
(3) when the units to be operated by the association have been
completed and some of these units have been conveyed to purchasers
and none of the other units are being offered for sale by the developer
in the ordinary course of business;
(4) when some of the units have been conveyed to purchasers
and none of the other units are being constructed or offered for sale by
the developer in the ordinary course of business.
(B) The developer is entitled to elect at least one member of the
board of administration of an association as long as the developer holds
for sale in the ordinary course of business at least five percent of the
units operated by the association, in condominiums with fewer than five
hundred units, and two percent of the units operated by the association
in condominiums with more than five hundred units. After the
developer relinquishes control of the association, the developer may
exercise the right to vote any developer-owned units in the same manner
as any other unit owner except for purposes of reacquiring control of the
association or selecting the majority members of the board of
administration.
Section 27-30-820. (A) Within sixty days after the unit owners,
excluding the developer, are entitled to elect a member of the board of
administration of an association, the association shall call, and give not
less than thirty days' and not more than forty days' notice of a meeting
of the unit owners to elect the members of the board of administration.
The meeting may be called and the notice given by a unit owner if the
association fails to do so. Upon election of the first unit owner,
excluding the developer, to the board of administration, the developer
shall forward to the commission the name and mailing address of the
unit owner board member.
(B) If a developer holds units for sale in the ordinary course of
business, none of the following actions may be taken without approval
in writing by the developer:
(1) assessment of the developer as a unit owner for capital
improvements;
(2) any action by the association that would be detrimental to
the sale of units by the developer. However, an increase in assessments
for common expenses without discrimination against the developer is
not considered detrimental to the sale of units.
(C) Before, or not more than sixty days after, the time that unit
owners, excluding the developer, elect a majority of the members of the
board of administration of an association, the developer shall relinquish
control of the association, and the unit owners shall accept control.
Simultaneously, the developer shall deliver to the association, at the
developer's expense, all property of the unit owners and of the
association held or controlled by the developer, including, but not
limited to, the following items, if applicable, relating to each
condominium operated by the association:
(1) the original or a photocopy of the recorded declaration of
condominium and all amendments. If a photocopy is provided, it must
be certified by affidavit of the developer or an officer or agent of the
developer as a complete copy of the actual recorded declaration;
(2) a certified copy of the articles of incorporation of the
association or if the association was created before the effective date of
this act and it is not incorporated, copies of the documents creating the
association;
(3) a copy of the bylaws;
(4) all minutes and other books and records of the association;
(5) rules and regulations which have been promulgated by the
association or on behalf of the association;
(6) resignations of officers and members of the board of
administration who are required to resign because the developer is
required to relinquish control of the association;
(7) financial records, including financial statements of the
association, and source documents since the incorporation of the
association through the date of turnover. The records must be reviewed
by an independent certified public accountant. The minimum report
required must be a review in accordance with generally accepted
accounting standards as defined by regulation of the South Carolina
Board of Accountancy. The accountant performing the review shall
examine, to the extent necessary, supporting documents and records,
including the cash disbursements and related paid invoices, to determine
if expenditures were for association purposes and the billings, cash
receipts, and related records to determine that the developer was charged
and paid the proper amounts of assessments;
(8) association funds or control of these funds;
(9) tangible personal property of the association, represented
by the developer to be part of the common elements or which is
ostensibly part of the common elements, and an inventory of that
property;
(10) a copy of the plans and specifications used in constructing
or remodeling improvements, in supplying equipment to the
condominium, and in constructing and installing all mechanical
components serving the improvements and the site with an affidavit of
the developer, his agent, or an architect or engineer authorized to
practice in this State certifying that the plans and specifications
represent, to the best of his knowledge and belief, the actual plans and
specifications used in the construction and improvement of the
condominium property and for the construction and installation of the
mechanical components serving the improvements. If the condominium
property has been declared a condominium more than three years after
the completion of construction or remodeling of the improvements, the
requirements of this item do not apply;
(11) insurance policies;
(12) copies of certificates of occupancy which may have been
issued for the condominium property;
(13) other permits applicable to the condominium property
issued by governmental bodies and in force or issued within one year
before the date the unit owners, excluding the developer, assumed
control of the association;
(14) written warranties of the contractor, subcontractors,
suppliers, and manufacturers that are still effective;
(15) a roster of unit owners, their addresses, and telephone
numbers, if known, as indicated on the developer's records;
(16) leases of the common elements and other leases to which
the association is a party;
(17) employment contracts or service contracts in which the
association is one of the contracting parties or in which the association
or the unit owners have an obligation or responsibility, directly or
indirectly, to pay some or all of the fee;
(18) all other contracts to which the association is a party.
(D) If this chapter or a regulation promulgated pursuant to this
chapter is violated by the association during the period before the
developer relinquishes control of the association pursuant to subsection
(C), the developer is responsible for the violation and is subject to the
administrative action provided in this chapter for the violation and is
liable for the violation to third parties.
Section 27-30-830. (A) A grant or reservation made by a
declaration, lease, or other document, and a contract made by an
association before unit owners, excluding the developer, assume control
of the association that provides for operation, maintenance, or
management of a condominium association or property serving the unit
owners of a condominium must be fair and reasonable, and the grant,
reservation, or contract may be canceled by unit owners, excluding the
developer:
(1) If the association operates only one condominium and the
unit owners, excluding the developer, have assumed control of the
association or if unit owners, excluding the developer, own at least
seventy-five percent of the voting interests in the condominium, the
cancellation must be by concurrence of the owners of at least
seventy-five percent of the voting interests excluding the voting interests
owned by the developer. If a grant, reservation, or contract is canceled
and the unit owners, excluding the developer, have not assumed control
of the association, the association shall enter a new contract or otherwise
provide for maintenance, management, or operation in lieu of the
canceled obligation at the direction of the owners of at least a majority
of the voting interests in the condominium, excluding the voting
interests owned by the developer.
(2) If the association operates more than one condominium
and the unit owners, excluding the developer, have not assumed control
of the association and if unit owners, excluding the developer, own at
least seventy-five percent of the voting interests in a condominium
operated by the association, a grant, reservation, or contract for
maintenance, management, or operation of buildings containing the units
in that condominium or of improvements used only by the owners of that
condominium may be canceled by concurrence of the owners of at least
seventy-five percent of the voting interests in the condominium,
excluding the voting interests owned by the developer. No grant,
reservation, or contract for maintenance, management, or operation of
recreational areas or other property serving more than one condominium
and operated by more than one association may be canceled except
pursuant to item (4).
(3) If the association operates more than one condominium
and the unit owners, excluding the developer, have assumed control of
the association, the cancellation must be by concurrence of the owners
of at least seventy-five percent of the total number of voting interests in
all condominiums operated by the association, excluding the voting
interests owned by the developer.
(4) If the owners of units in a condominium have the right to
use property in common with owners of units in other condominiums
and those condominiums are operated by more than one association, no
grant, reservation, or contract for maintenance, management, or
operation of the property serving more than one condominium may be
canceled until unit owners, excluding the developer, have assumed
control of all of the associations operating the condominiums that are to
be served by the recreational area or other property, after which
cancellation may be effected by concurrence of the owners of at least
seventy-five percent of the total number of voting interests owned by the
developer.
(B) A grant or reservation made by a declaration, lease, or other
document, or a contract made by the developer of the association before
the unit owners, excluding the developer, elect a majority of the board
of administration, that requires the association to purchase condominium
property or to lease condominium property to another party, must be
considered ratified unless rejected by a majority of the voting interests
of unit owners, excluding the developer, within eighteen months after
those unit owners elect a majority of the board of administration. This
subsection does not apply to a grant or reservation made by a declaration
whereby persons other than the developer or his heirs, assigns, affiliates,
directors, officers, or employees are granted the right to use the
condominium property, so long as those persons are obligated to pay, at
a minimum, a proportionate share of the cost associated with the
property.
(C) A grant or reservation made by a declaration, lease, or other
document, and a contract made by an association, before or after the unit
owners, excluding the developer, assume control of the association, that
provides for operation, maintenance, or management of a condominium
association or property serving the unit owners must not be in conflict
with the powers and duties of the association or the rights of the unit
owners as provided in this chapter.
(D) A grant or reservation made by a declaration, lease, or other
document, and a contract made by an association before the unit owners,
excluding the developer, assume control of the association must be fair
and reasonable.
(E) An individual, corporation, partnership, or other entity which
on behalf of the association or on behalf of the unit owners operates,
maintains, or manages the property of the condominium or the
association or property serving the unit owners of a condominium
association first must be licensed by the South Carolina Real Estate
Commission before undertaking these activities.
(F) It is declared that the public policy of this State prohibits the
inclusion or enforcement of escalation clauses in management contracts
for condominiums, and these clauses are declared void. For the
purposes of this subsection, an escalation clause is a clause in a
condominium management contract which provides that the fee under
the contract increases at the same percentage rate as a nationally
recognized and conveniently available commodity or consumer price
index.
Section 27-30-840. (A) No written contract to provide the
operation, maintenance, or management of a condominium association
or property serving the unit owners of a condominium is valid or
enforceable by an association unless the contract:
(1) specifies the services, obligations, and responsibilities of
the party contracting to provide maintenance or management services to
the unit owners;
(2) specifies those costs incurred in the performance of those
services, obligations, or responsibilities which must be reimbursed by
the association to the party contracting to provide maintenance or
management services;
(3) provides an indication of how often each service,
obligation, or responsibility is to be performed;
(4) specifies a minimum number of personnel to be employed
by the party contracting to provide maintenance or management services
for the purpose of providing service to the association;
(5) discloses financial or ownership interest which the
developer, if the developer is in control of the association, holds with
regard to the party contracting to provide maintenance or management
services.
(B) If the party contracting to provide maintenance or
management services fails to provide these services in accordance with
the contract, the association may procure these services from another
party and may collect fees or charges paid for service performed by the
other party from the party contracting to provide maintenance or
management services.
(C) Services or obligations not stated on the face of the contract
are unenforceable.
(D) This section applies to contracts for maintenance or
management services for which the association pays compensation and
does not apply to contracts for services or property made available for
the convenience of unit owners by lessees or licensees of the association,
including, but not limited to, a coin-operated laundry, food, soft drink,
or telephone vendors; cable television operators; retail store operators;
businesses; restaurants; or similar vendors.
Section 27-30-850. (A) Each unit owner and each association
must be governed by and shall comply with this chapter, the declaration,
the documents creating the association, and the association bylaws.
Actions for damages or injunctive relief, or both, for failure to comply
with this chapter may be brought by the association or by a unit owner
against the association, a unit owner, directors who wilfully and
knowingly fail to comply, or directors designated by the developer for
actions taken by them before control of the association is assumed by
unit owners, excluding the developer. The prevailing party may recover
reasonable attorney's fees in an action brought pursuant to this
subsection or in an action in which the purchaser may void a contract.
This relief does not exclude other remedies provided by law.
(B) No provision of this chapter may be waived if the waiver
adversely would affect the rights of a unit owner or the purpose of the
provision, except that unit owners or members of a board of
administration may waive notice of specific meetings in writing if
provided by the bylaws. An instrument given in writing by the unit
owner to an escrow agent may be relied upon by an escrow agent even
though the payment of funds under the instrument may constitute a
waiver of a provision of this chapter.
(C) If the declaration or bylaws provide, the association may
impose reasonable fines against a unit for the failure of the unit owner
or his occupant, licensee, or invitee, to comply with the declaration, the
association bylaws, or reasonable rules of the association. No fine may
exceed fifty dollars or be imposed before giving reasonable notice and
opportunity for a hearing to the unit owner, his licensee, or invitee. No
fine may be a lien against a unit. This subsection does not apply to
unoccupied units.
Article 4
Special Types of Condominiums
Section 27-30-1010. (A) A condominium may be created on
land held under lease or may include recreational facilities or other
common elements or commonly used facilities on a leasehold if on the
date the first unit is conveyed by the developer to a bona fide purchaser
the lease has an unexpired term of at least fifty years. If rent under the
lease is payable by the association or by the unit owners, the lease must
include the following requirements:
(1) The leased land must be identified by a description
sufficient to pass title, and the leased personal property must be
identified by a general description of the items and the approximate
number of each item the developer commits to furnish for each room or
facility, or the personal property may be identified by the minimum
amount required to purchase the personal property for the facility.
Unless the lease is of a unit, the identification of the land must be
supplemented by a survey showing the relation of the leased land to the
land included in the common elements, but land or personal property
may be added in accordance with the terms of the lease if there is no
increase in rent or material increase in maintenance costs to the
individual unit owner.
(2) The lease may not contain a reservation of the right of
possession or control of the leased property by the lessor or a person
other than unit owners or the association and may not create rights to
possession or use of the leased property in a party other than the
association or unit owners of the condominium to be served by the
leased property, unless the reservation and rights created are disclosed
conspicuously. A provision for use of the leased property by anyone
other than unit owners of the condominium to be served by the leased
property requires the other users to pay a fair and reasonable share of the
maintenance and repair obligations and other exactions due from users
of the leased property.
(3) The lease must state the minimum number of unit owners
required, directly or indirectly, to pay the rent under the lease and the
maximum number of units to be served by the leased property. The
limitation of the number of units to be served does not preclude
enlargement of the facilities leased and an increase in capacity, if
approved by the association operating the leased property after unit
owners, excluding the developer, have assumed control of the
association. This item does not apply if the lessor is the United States,
this State, or its political subdivisions or an agency of a political
subdivision.
(B) If under the lease rent is a fixed amount for the full duration
of the lease and is payable by a person other than the association or the
unit owners, the commissioner may accept alternative assurances
sufficient to secure the payment of rent, including, but not limited to,
annuities with an insurance company authorized to do business in this
State or cash deposits in trust in an amount to generate interest sufficient
to meet lease payments as they occur; the association must be the
beneficiary of the annuity or the trust. If the alternative assurances are
accepted by the commissioner, the following apply:
(1) Disclosures of a reservation of the right of possession or
control of the leased property, if not contained within the lease, may be
made by the developer.
(2) Disclosure of the minimum number of unit owners
required, directly or indirectly, to pay the rent under the lease and the
maximum number of units that will be served by the leased property, if
not contained in the lease, may be stated by the developer.
(3) Sections 27-30-1020 and 27-30-1050 apply but are not
required to be stated in the lease.
(4) Section 27-30-1040 does not apply.
Section 27-30-1020. If the lease is of recreational facilities or
other commonly used facilities that are not completed, rent must not
begin until some of the facilities are completed. Until all of the facilities
leased are completed, rent must be prorated and paid only for the
completed facilities in proportion to the value the completed facilities
bears to the estimated completed value of all of the facilities that are
leased. The facilities are completed when they have been constructed,
finished, equipped, and are available for use.
Section 27-30-1030. (A) A lease of recreational or other
commonly used facilities entered into by the association or unit owners
before the unit owners, excluding the developer, assume control of the
association must grant the lessee an option to purchase the leased
property, payable in cash, on any anniversary date after the tenth
anniversary of the beginning of the lease, at a price then determined by
agreement. If there is no agreement on the price, then the price must be
determined by arbitration.
(B) If the lessor wishes to sell his interest and has received a bona
fide offer to purchase it, the lessor shall send the association and each
unit owner a copy of the executed offer. For ninety days following
receipt of the offer, the association or unit owners have the option to
purchase the interest on the terms and conditions in the offer. The
option must be exercised, if at all, by notice in writing to the lessor
within the ninety-day period. If the association or unit owners do not
exercise the option, the lessor has the right for sixty days after the
ninety-day period has expired to complete the transaction described in
the offer to purchase. If for any reason the transaction is not concluded
within the sixty days, the offer is abandoned, and the provisions of this
item must be reimposed.
(C) The option must be exercised upon approval by owners of
two-thirds of the units served by the leased property.
(D) The provisions of this section do not apply to a nonresidential
condominium and do not apply if the lessor is the United States, this
State, or its political subdivisions or, in the case of an underlying land
lease, a person or entity, not the developer or directly or indirectly
owned or controlled by the developer, did not obtain, directly or
indirectly, ownership of the leased property from the developer.
Section 27-30-1040. (A) The lease or a subordination
agreement executed by the lessor must provide that:
(1) a lien which encumbers a unit for rent, other monies, or
exactions payable is subordinate to a mortgage held by an institutional
lender; or
(2) upon foreclosure of a mortgage held by an institutional
lender or upon delivery of a deed in lieu of foreclosure, the lien for the
unit owner's share of the rent or other exactions may not be extinguished
but must be foreclosed and unenforceable against the mortgagee with
respect to that unit's share of the rent and other exactions which mature
or become due and payable on or before the date of the final judgment
of foreclosure, and in the event of foreclosure, or on or before the date
of delivery of the deed in lieu of foreclosure. The lien may automatically
and by operation of the lease or other instrument reattach to the unit and
secure the payment of the unit's proportionate share of the rent or other
exactions coming due after the date of final decree of foreclosure or the
date of delivery of the deed in lieu of foreclosure.
(B) The provisions of this section do not apply if the lessor is the
United States or this State or its political subdivisions or an agency of a
political subdivision.
Section 27-30-1050. (A) In an action by the lessor to enforce
a lien for rent payable or in an action by the association or a unit owner
on the obligations of the lessee or the lessor under the lease, any issue
may be raised or defense, legal or equitable, asserted relative to the
lessor's obligations under the lease. If the unit owner or the association
initiates an action or asserts a defense other than payment of rent under
the lease, the unit owner or the association upon service of process upon
the lessor shall pay to the clerk of court the rent alleged to have accrued
and the rent as it is due during the pendency of the proceeding. If the
unit owner or the association fails to pay the rent to the clerk of court,
it is an absolute waiver of the unit owner's or association's defenses,
other than payment, and the lessor is entitled to default. When the
required funds are deposited with the clerk of court, the unit owner or
association shall notify the lessor of the deposit and the lessor may apply
to the court for disbursement of all or part of the funds necessary for
paying taxes, mortgages, maintenance and operating expenses, and other
necessary expenses incident to maintaining and equipping the leased
facilities or necessary for the payment of other expenses arising out of
personal hardship resulting from the loss of rental income from the
leased facilities. After an evidentiary hearing the court may award all
or part of the funds on deposit to the lessor for these purposes. The
court shall require the lessor to post bond or other security as a condition
to the release of funds from the clerk when the value of the leased land
and improvements, apart from the lease itself, is inadequate to fully
secure the sum of existing encumbrances on the leased property and the
amounts released from the clerk of court.
(B) When the association or a unit owner has deposited funds with
the clerk of court pursuant to this item and has complied with his
obligations under the lease or agreement, except paying rent to the
lessor, the lessor may not hold the association or unit owner in default
on the rental payments, and the lessor may not file a lien or initiate
foreclosure proceedings against the unit owner. If the lessor places a
lien or initiates a foreclosure, then the lessor may be liable for damages,
attorney's fees, and costs that the association or unit owner incurs in
satisfying the lien or foreclosure.
Section 27-30-1060. (A) Inclusion or enforcement of escalation
clauses in land leases or other leases or agreements for recreational
facilities, land, or other commonly used facilities serving residential
condominiums are prohibited and these clauses are declared void. For
the purposes of this section, an escalation clause is a clause in a
condominium lease or agreement which increases at the same percentage
rate as a nationally recognized and conveniently available commodity
or consumer price index.
(B) This section does not apply if the lessor is the United States,
this State, or its political subdivisions or an agency of a political
subdivision.
Section 27-30-1070. A developer may create a condominium by
converting existing, previously occupied improvements to condominium
ownership by complying with Article 1 of this chapter. A developer of
a residential condominium must comply with Article VI of this chapter
but the failure to comply does not affect the validity of the
condominium.
Section 27-30-1080. (A) Notwithstanding the provisions of this
article regarding amending the declaration, a developer may develop a
condominium in phases, if the original declaration of condominium
submitting the initial phase to condominium ownership or an
amendment to the declaration approved by the unit owners and unit
mortgagees provides for and describes in detail all anticipated phases;
the impact, if any, the completion of subsequent phases would have
upon the initial phase; and the time period, not to exceed seven years
from the recording date of the declaration of condominium, within
which all phases must be added to the condominium and comply with
the requirements of this section and at the end of which the right to add
additional phases expires.
(B) The original declaration of condominium or an amendment to
the declaration approved by all unit owners, all unit mortgagees, and the
developer, must describe:
(1) the land which may become part of the condominium and
the land on which each phase is to be built. The descriptions must
include metes and bounds or other legal descriptions of the land for each
phase, plot plans, and surveys. Plot plans, attached as an exhibit, must
show the approximate location of all existing and proposed buildings
and improvements that may be contained within the condominium. The
unit or building types in the plot plan may be modified by the developer
to the extent that these changes are described in the declaration. If
provided in the declaration, the developer may make nonmaterial
changes in the legal description of a phase;
(2) the minimum and maximum numbers and general size of
units in each phase. The difference between the minimum and
maximum numbers of units may not be greater than twenty percent of
the maximum. The general size may be expressed by minimum and
maximum square feet;
(3) each unit's percentage of ownership in the common
elements as each phase is added. In lieu of describing specific
percentages as units are added to the condominium by the addition of
land, the declaration or amendment may describe a formula for
reallocating each unit's percentage of ownership in the common
elements and the manner of sharing common expenses and owning
common surplus. The basis for allocating percentage of ownership
among units in added phases must be consistent with the basis for
allocation made among the units originally in the condominium;
(4) the recreational areas and facilities to be owned as
common elements by all unit owners, all personal property to be
provided as each phase is added to the condominium, and those facilities
or areas which may not be built or provided if a phase is not developed
and added as a part of the condominium. The developer may reserve the
right to add additional common element recreational facilities if the
original declaration contains a description of each type of facility and its
proposed location. The declaration must state the circumstances under
which these facilities will be added;
(5) the membership vote and ownership in the association
attributable to each unit in each phase and the results if any phase is not
developed and added as a part of the condominium;
(6) if time share interests will or may be created in units in any
phase and the degree, quantity, nature, and extent of these interests,
specifying the minimum duration of the recurring periods of rights of
use, possession, or occupancy that may be established in a unit.
Section 27-30-1090. (A) The developer shall notify owners of
existing units of the beginning of an additional phase to the
condominium or the decision not to add an additional phase. Notice
must be by certified mail addressed to each owner at his unit address or
at his last known address.
(B) If no more phases are built, the units which are built own one
hundred percent of all common elements within the phases actually
developed and added as a part of the condominium.
Section 27-30-1100. If the declaration requires the developer to
convey additional land or facilities to the condominium after the
completion of the first phase and the developer fails to do so within the
time specified or within a reasonable time if none is specified, then a
unit owner or the association may enforce the obligation against the
developer or bring an action against the developer for damages caused
by the developer's failure to convey the additional land or facilities.
Section 27-30-1110. (A) Notwithstanding other provisions of
this chapter, an amendment by the developer adding land to the
condominium must be consistent with the provisions of the declaration
granting the right and must contain or provide:
(1) a statement submitting the additional land to condominium
ownership as an addition to the condominium;
(2) the legal description of the land being added to the
condominium;
(3) an identification by letter, name, or number, or a
combination of these for each unit within the land added to the
condominium to ensure that no unit in the condominium, including the
additional land, will have the same designation as another unit;
(4) a survey of the additional land and a graphic description
of the improvements in which any units are located, a plot plan, and a
certificate of a surveyor, in conformance with these requirements for a
declaration;
(5) the undivided share in the common elements appurtenant
to each unit in the condominium stated as a percentage or fraction
which, in the aggregate, must equal the whole and must be determined
in conformance with the manner of allocation stated in the original
declaration of condominium;
(6) the percentage of and the manner of sharing common
expenses and owning common surplus, which for a residential unit must
be the same as the undivided share in the common elements. Unit
owners are not required to execute or consent to an amendment adding
phases to a condominium unless the amendment permits the creation of
time share interests in a unit of the additional phase and the creation is
not authorized by the original declaration.
(B) An amendment to the declaration of condominium adding land
to the condominium must be recorded in the public records of the county
where the land is located and must be executed and acknowledged in
compliance with the requirements of a deed. A person who has recorded
title to the interest in the land submitted to condominium ownership, or
his lawfully authorized agent, must execute the amendment. Every
amendment must comply with the execution requirements for a
declaration.
Article 5
Regulation and Disclosure Prior to
Sale of Residential Condominiums
Section 27-30-1310. (A) The South Carolina Real Estate
Commission has the power to enforce and ensure compliance with this
chapter and regulations promulgated pursuant to this chapter relating to
the development, construction, sale, lease, ownership, operation, and
management of residential condominium units. The commission has the
following powers and duties:
(1) The commission may make necessary public or private
investigations within or outside this State to determine if a person has
violated this chapter, a regulation, or order.
(2) The commission may require or permit a person to file a
statement in writing, under oath or otherwise, as the commission
determines, relating to the facts and circumstances in a matter to be
investigated.
(3) For the purpose of an investigation under this chapter, the
commissioner or an officer or employee designated by the commissioner
may administer oaths or affirmations, subpoena witnesses and compel
their attendance, take evidence, and require the production of any matter
relevant to the investigation, including the existence, description, nature,
custody, condition, and location of books, documents, or other tangible
things and the identity and location of persons having knowledge of
relevant facts or other matter reasonably calculated to lead to the
discovery of material evidence. If a person fails to obey a subpoena or
to answer questions propounded by the investigating officer and upon
reasonable notice to all persons affected by this, the commission may
apply to the circuit court for an order compelling compliance.
(4) Notwithstanding remedies available to unit owners and
associations, if the commission has reasonable cause to believe that a
violation of this chapter or a regulation has occurred, the commission
may institute enforcement proceedings in its own name against a
developer or an association, or its assignees or agents, as follows:
(a) The commissioner may permit a person whose conduct or
actions may be under investigation to waive formal proceedings and
enter into a consent proceeding where orders, rules, or letters of censure
or warning, whether formal or informal, may be entered against the
person.
(b) The commissioner may issue an order requiring the
developer or association, or its assignees or agents, to cease and desist
from the unlawful practice and take affirmative action as in the judgment
of the commissioner will carry out the purposes of this chapter.
(c) If approved by the Attorney General, the commissioner
may bring an action in circuit court on behalf of a class of unit owners,
lessees, or purchasers for declaratory relief, injunctive relief, or
restitution.
(d) The commissioner may impose a civil penalty against
a developer or association, or its assignees or agents, for a violation of
this chapter or a regulation promulgated pursuant to this chapter. A
penalty may be imposed on the basis of each day of continuing violation,
but in no event may the penalty for an offense exceed ten thousand
dollars. If a developer fails to pay the civil penalty, the commissioner
shall issue an order directing that the developer cease and desist from
further operation until the civil penalty is paid or may pursue
enforcement of the penalty in a court of competent jurisdiction. If an
association fails to pay the civil penalty, the commissioner shall pursue
enforcement in a court of competent jurisdiction, and the order imposing
the civil penalty or the cease and desist order will not become effective
until twenty days after the date of the order. An action commenced by
the commissioner must be bought in the county where the commission
has its executive offices or in the county where the violation occurred.
(5) The commission may prepare and disseminate a
prospectus and other information to assist prospective owners,
purchasers, lessees, and developers of residential condominiums in
assessing the rights, privileges, and duties pertaining to residential
condominiums.
(6) The commission is authorized to promulgate
regulations necessary to implement, enforce, and interpret this chapter.
(7) The commission shall establish procedures for
providing notice to an association when the commission is considering
issuing a declaratory statement relating to the declaration of
condominium or a related document governing the condominium
community.
(8) The commission shall furnish each association which
pays the fees required by subsection (B) a copy of this chapter and the
rules promulgated pursuant to this chapter.
(9) the commission annually shall provide each association
with a summary of declaratory statements and formal legal opinions
relating to the operations of condominiums rendered by the
commissioner during the previous year.
(10) The commission shall adopt uniform accounting principles,
policies, and standards to be used by associations in the preparation and
presentation of financial statements required by this chapter. The
principles, policies, and standards must take into consideration the size
of the association and the total revenue collected by the association.
(B) Before January second of each year, each condominium
association operating more than two units shall pay the commission an
annual fee of two dollars for each residential unit in condominiums
operated by the association. If the fee is not paid by March first, then
the association must be assessed a penalty of ten percent of the amount
due, and the association does not have standing to maintain or defend an
action in the courts of this State until the amount due plus any penalty
is paid.
Section 27-30-1320. (A) A developer of a residential
condominium shall file with the commission one copy of each document
and item required to be furnished to a buyer or lessee in a prospectus or
offering circular pursuant to this chapter or in connection with a contract
for sale or lease. The commission has sixty days to review these
documents and items and notify the developer of any deficiencies. Until
the developer has received the commission's written approval of these
documents and items, a contract for sale of a unit or lease of a unit for
more than five years is voidable by the purchaser or lessee before the
closing of the purchase or lease of the unit.
(B) Upon filing the documents and items required by subsection
(A), the developer shall pay the commission a filing fee of twenty-five
dollars for each residential unit to be sold by the developer described in
the documents filed. If the condominium is to be built or sold in phases,
the fee must be paid before offering units for sale in a subsequent phase.
(C) A material change to the filing required by subsection (A)
must be filed with the commission with supporting documentation and
approved by the commission before the change is implemented. A filing
of a material change must be accompanied by a fifty dollar filing fee.
(D) As long as sales continue by the developer within the
condominium property, the filing as required by subsection (A) must be
renewed on January first of each year by paying a five hundred dollar
renewal fee to the commission and certifying that the plan of sale has not
changed from that previously approved by the commission. The
commission is not required to give a developer notice that the renewal
is due. If the renewal fee and certification are not received by the
commission by January first, a late fee of one hundred dollars must be
charged through January thirty-first. Failure to renew by January
thirty-first of each year results in termination of the filing and a new
filing must be submitted to the commission, including payment of all
fees for an original filing.
(E) A developer who complies with this section is not required to
file the condominium information with any other agency of this State for
approval to sell the condominium units.
Section 27-30-1330. (A)(1) Before filing the documents and
items required by Section 27-30-1320, a developer may not offer a
contract for purchase of a unit or lease of a unit for more than five years
but may accept deposits for reservations upon approval of a fully
executed escrow agreement and reservation agreement filed with the
South Carolina Real Estate Commission and upon payment of a fee to
the commission of five hundred dollars a filing. Reservations may not
be taken on a proposed condominium unless the developer has an
ownership, leasehold, or contractual interest in the land upon which the
condominium is to be developed. The commission shall notify the
developer of any deficiencies within twenty days of receiving the
reservation filing. The notification does not preclude the determination
of reservation filing deficiencies at a later date, and it does not relieve
the developer of any responsibility under the law. The escrow
agreement and the reservation agreement form must include that the
prospective purchaser must be given an immediate unqualified refund
of the reservation deposit upon written request to the escrow agent by
the prospective purchaser or the developer.
(B) The executed escrow agreement signed by the developer and
the escrow agent must contain:
(1) a statement that the escrow agent will give a prospective
purchaser an immediate unqualified refund of the reservation deposit
upon written request to the escrow agent or to the developer;
(2) a statement that the escrow agent must not release money
directly to the developer except as a downpayment on the purchase price
at the time a contract is signed by the purchaser if provided in the
contract.
(C) The reservation agreement form must include:
(1) a statement of the developer's obligation to file
condominium documents with the commission before entering into a
binding purchase agreement or a binding agreement for a lease of more
than five years;
(2) a statement of the prospective purchaser's right to receive
all condominium documents as required by this chapter;
(3) the name and address of the escrow agent;
(4) a statement that the developer assures that the purchase
price represented in or pursuant to the reservation agreement will be the
price in the contract for purchase and sale, or that the price represented
may be exceeded within a stated amount or percentage, or that no
assurance is given regarding the price in the contract for purchase or
sale;
(5) a statement that the deposit must be payable to the escrow
agent and that the escrow agent must provide a receipt to the prospective
purchaser;
(6) a statement that the escrow agent will give a prospective
purchaser an immediate unqualified refund of the reservation deposit
upon written request to the escrow agent or to the developer;
(7) a statement that the escrow agent must not release money
directly to the developer except as a downpayment on the purchase price
at the time a contract is signed by the purchaser if provided in the
contract.
Section 27-30-1340. A contract for the sale of a residential unit or
a lease of a residential unit for an unexpired term of more than five years
must:
(1) contain in conspicuous type: THIS AGREEMENT IS
VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF
THE BUYER'S INTENTION TO CANCEL WITHIN FIFTEEN DAYS
AFTER THE DATE THIS AGREEMENT IS EXECUTED BY THE
BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS
REQUIRED TO BE DELIVERED TO HIM BY THE DEVELOPER
UNDER THE SOUTH CAROLINA CONDOMINIUM ACT. THIS
AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING
WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL
WITHIN FIFTEEN DAYS AFTER THE DATE OF RECEIPT FROM
THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY
ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS
ADVERSE TO THE BUYER. A PURPORTED WAIVER OF THE
BUYER'S RIGHT TO VOID THIS AGREEMENT IS OF NO EFFECT.
THE BUYER MAY EXTEND THE TIME FOR CLOSING FOR A
PERIOD OF NOT MORE THAN FIFTEEN DAYS AFTER THE
BUYER HAS RECEIVED ALL OF THE ITEMS REQUIRED. THE
BUYER'S RIGHT TO VOID THIS AGREEMENT TERMINATES AT
CLOSING;
(2) contain in conspicuous type on the first page of the
contract: ORAL REPRESENTATIONS CANNOT BE RELIED UPON
AS CORRECTLY STATING THE REPRESENTATIONS OF THE
DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE
SHOULD BE MADE TO THIS CONTRACT AND THE
DOCUMENTS REQUIRED BY THE SOUTH CAROLINA
CONDOMINIUM ACT TO BE FURNISHED BY A DEVELOPER TO
A BUYER OR LESSEE;
(3) contain a statement that the unit has been occupied if
occupied by someone other than the buyer;
(4) if the contract is for the sale or transfer of a unit subject to
a lease, include as an exhibit a copy of the executed lease and must
contain within the text in conspicuous type: THE UNIT IS SUBJECT
TO A LEASE (OR SUBLEASE);
(5) if the contract is for the lease of a unit for five years or
more, include as an exhibit a copy of the proposed lease;
(6) if the contract is for the sale or lease of a unit that is
subject to a lien for rent payable under a lease of a recreational facility
or other commonly used facility, contain within the text in conspicuous
type: THIS CONTRACT IS FOR THE TRANSFER OF A UNIT THAT
IS SUBJECT TO A LIEN FOR RENT PAYABLE UNDER A LEASE
OF COMMONLY USED FACILITIES. FAILURE TO PAY RENT
MAY RESULT IN FORECLOSURE OF THE LIEN;
(7) state the name and address of the escrow agent required by
this chapter and state that the purchaser may obtain a receipt for his
deposit from the escrow agent upon request;
(8) if the contract is for the sale or transfer of a unit in a
condominium in which time share interests have been or may be created,
contain within the text in conspicuous type: UNITS IN THIS
CONDOMINIUM ARE SUBJECT TO TIME SHARE INTERESTS.
Section 27-30-1350. (A) Until the developer furnishes the
documents required by this section to a person who has entered into a
contract to purchase a residential unit or to lease it for more than five
years, the contract may be voided by that person, entitling the person to
a refund of any deposit and interest in accordance with this chapter. The
contract may be terminated by written notice from the proposed buyer
or lessee delivered to the developer within fifteen days after the buyer
or lessee receives the documents required by this section. If the
development is subject to Section 27-30-1360 the documents to be
delivered to the prospective buyer or lessee are the prospectus or
disclosure statement and all exhibits. If the development is not subject
to Section 27-30-1360, then copies of the following, if applicable, must
be delivered to the prospective buyer or lessee:
(1) declaration of condominium or the proposed declaration
if the declaration has not been recorded, which must include the
certificate of a surveyor;
(2) documents creating the association;
(3) bylaws;
(4) ground lease or other underlying lease of the
condominium;
(5) management contracts, maintenance contracts, other
contracts for management of the association and operation of the
condominium and facilities used by the unit owners having a service
term in excess of one year, and management contracts that are
renewable;
(6) estimated operating budget for the condominium and a
schedule of expenses for each type of unit;
(7) lease of recreational and other facilities to be used only by
unit owners of the condominium;
(8) lease of recreational and other common facilities to be used
by unit owners in common with unit owners of other condominiums;
(9) form of unit lease if the offer is of a leasehold;
(10) declaration of servitude of properties serving the
condominium but not owned by unit owners or leased to them or the
association;
(11) if the development is to be built in phases or if the
association is to manage more than one condominium, a description of
the plan of phase development or the arrangements for the association
to manage two or more condominiums;
(12) if the condominium is a conversion of existing
improvements, the statements and disclosure requirements for a
conversion concerning the condition of the buildings and estimated
replacement costs;
(13) form of agreement for sale or lease of units;
(14) copy of the unit floor plan and the plot plan showing the
location of the residential buildings and the recreation and other
common areas;
(15) copy of all covenants and restrictions affecting the use of
the property not contained in the other items required by this subsection.
(B) (1) If a residential condominium parcel is offered for sale
or lease before construction of the units and improvements to the
common elements or remodeling of previously occupied buildings is
completed, the developer shall make available to each prospective
purchaser or lessee, for inspection at a place convenient to the site, a
copy of the complete plans and specifications for construction or
remodeling of the unit offered and for the improvements to the common
elements appurtenant to the unit.
(2) A sales brochure, if any, must be provided to each
purchaser, and the following must be placed in conspicuous type on the
inside front cover or on the first page containing text material of the
sales brochure or otherwise conspicuously displayed: ORAL
REPRESENTATIONS CANNOT BE RELIED UPON AS
CORRECTLY STATING REPRESENTATIONS OF THE
DEVELOPER. FOR CORRECT REPRESENTATIONS REFER TO
THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY
THE SOUTH CAROLINA CONDOMINIUM ACT TO BE
FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. If
time share interests have been or may be created in a unit in the
condominium, the sales brochure must contain in conspicuous type:
UNITS IN THIS CONDOMINIUM ARE SUBJECT TO TIME SHARE
INTERESTS.
Section 27-30-1360. A developer of a residential condominium
containing more than twenty residential units or which is part of a group
of residential condominiums to be served by property for use in common
by unit owners of more than twenty residential units shall prepare a
prospectus or offering circular and file with and receive approval of the
South Carolina Real Estate Commission before entering into an
enforceable contract of purchase and sale of a unit or lease of a unit for
more than five years and shall furnish a copy of the prospectus or
offering circular to each buyer. The prospectus or offering circular may
include more than one condominium, although not all units are being
offered for sale as of the date of the prospectus or offering circular. The
prospectus or offering circular must contain:
(1) on the front cover or the first page only:
(a) the name of the condominium;
(b) the following in conspicuous type:
(i) THIS PROSPECTUS (OFFERING CIRCULAR)
CONTAINS IMPORTANT MATTERS TO BE CONSIDERED IN
ACQUIRING A CONDOMINIUM UNIT.
(ii) THE STATEMENTS CONTAINED IN THIS
PROSPECTUS (OFFERING CIRCULAR) ARE ONLY SUMMARY
IN NATURE. A PROSPECTIVE PURCHASER SHOULD REFER TO
ALL REFERENCES, ALL EXHIBITS, THE CONTRACT
DOCUMENTS, AND SALES MATERIALS.
(iii) ORAL REPRESENTATIONS CANNOT BE RELIED
UPON AS CORRECTLY STATING THE REPRESENTATIONS OF
THE DEVELOPER. REFER TO THIS PROSPECTUS (OFFERING
CIRCULAR) AND ITS EXHIBITS FOR CORRECT
REPRESENTATIONS.
(2) on the next page all statements required to be in conspicuous
type in the prospectus or offering circular;
(3) a separate index of the contents and exhibits of the prospectus;
(4) beginning on the first page of the text, excluding the summary
and index, a description of the condominium, including, but not limited
to:
(a) its name and location;
(b) a description of the condominium property, including,
without limitation:
(i) the number of buildings, the number of units in each
building, the number of bathrooms and bedrooms in each unit, and the
total number of units if the condominium is not a phase condominium
or the maximum number of buildings that may be contained within the
condominium, the minimum and maximum numbers of units in each
building, the minimum and maximum numbers of bathrooms and
bedrooms that may be contained within the condominium if the
condominium is a phase condominium;
(ii) the page in the condominium documents where a copy
of the plot plan and survey of the condominium is located;
(iii) the estimated latest date for completing the
construction, finishing, and equipping. In lieu of a date, the description
must include a statement that the estimated date of completion of the
condominium is in the purchase agreement and a reference to the article
or paragraph containing that information;
(c) the maximum number of units that will use facilities in
common with the condominium. If the maximum number of units will
vary, a description of the basis for variation and the minimum amount
per unit to be spent for additional recreational facilities or enlargement
of these facilities. If the addition or enlargement of facilities will result
in a material increase of a unit owner's maintenance expense or rental
expense, the maximum increase and limitations must be stated;
(5)(a) a statement in conspicuous type describing whether the
condominium is created and being sold as fee simple interests or as
leasehold interests. If the condominium is created or being sold on a
leasehold, the location of the lease in the disclosure materials must be
stated.
(b) a statement in conspicuous type if time share interests are
or may be created and sold in units in the condominium;
(6) a description of the recreational and other commonly used
facilities for use only by unit owners of the condominium, which may be
stated as an approximation or minimum, in describing location, area,
capacity, number, volume, or size and must include, but is not limited to:
(a) each room and its intended purpose, location, approximate
floor area, and capacity in numbers of people;
(b) the general location of each swimming pool, its
approximate size and depth, approximate deck size and capacity, and
whether heated;
(c) the number of each additional facility, its approximate
location, approximate size, and approximate capacity;
(d) a general description of the items of personal property and
the approximate number of each item that the developer commits to
furnish for each room or other facility or a representation of the
minimum amount that will be spent to purchase the personal property for
the facility.
(e) the estimated date when each room or other facility will be
available for use by the unit owners;
(f) (i) an identification of each room or other facility to be used
by unit owners that will not be owned by the unit owners or the
association;
(ii) a reference to the location in the disclosure materials
of the lease or other agreements providing for the use of those facilities;
and
(iii) a description of the terms of the lease or other
agreements, including the length of the term; the rent payable, directly
or indirectly, by each unit owner, and the total rent payable to the lessor,
stated in monthly and annual amounts for the entire term of the lease;
and a description of an option to purchase the property leased, including
the time the option may be exercised, the purchase price or how it is to
be determined, the manner of payment, and whether the option may be
exercised for a unit owner's share or only for the entire leased property.
(g) a statement whether the developer may provide additional
recreational or other commonly used facilities not already described in
the prospectus or offering circular; their general locations and types;
improvements or changes that may be made; the approximate amount to
be expended; and the maximum additional common expense or cost to
a unit owner that may be charged during the first annual period of
operation of the modified or added facilities;
(7) a description of the recreational and other facilities to be used
in common with other condominiums requiring payment of maintenance
and expenses of these facilities, directly or indirectly, by the unit
owners. The description must include, but is not limited to:
(a) each building and facility committed to be built;
(b) facilities committed to be built only under certain
conditions, and a statement of those conditions or contingencies;
(c) a statement whether facilities in subitem (a) or (b) will be
owned by the unit owners having the use of the facility or by an
association or other entity which will be controlled by the unit owners
or others and the location in the exhibits of the lease or other documents
providing for use of those facilities;
(d) the year in which each facility will be available for use by
the unit owners or the maximum number of unit owners in the project at
the time each or all of the facilities are committed to be completed;
(e) a general description of the items of personal property and the
approximate number of each item that the developer commits to furnish
for each room or other facility or a representation as to the minimum
amount that will be spent to purchase the personal property for the
facility;
(f) a description of the lease, if any, including the length of the
term, the rent payable, and a description of an option to purchase;
(8) recreation lease or associated club membership:
(a) if recreational facilities or other facilities offered by the
developer and available to or to be used by unit owners are to be leased
or have a club membership the following in conspicuous type must be
included: THERE IS A RECREATIONAL FACILITIES LEASE
ASSOCIATED WITH THIS CONDOMINIUM; or THERE IS A CLUB
MEMBERSHIP ASSOCIATED WITH THIS CONDOMINIUM. There
must be a reference to the location in the disclosure materials where the
recreation lease or club membership is described in detail.
(b) if unit owners are required to pay a fee, rent, dues, or other
charges under a recreational facilities lease or club membership for the
use of facilities, there must be in conspicuous type the applicable
statement:
(i) MEMBERSHIP IN THE RECREATIONAL
FACILITIES CLUB IS MANDATORY FOR UNIT OWNERS;
(ii) UNIT OWNERS ARE REQUIRED, AS A
CONDITION OF OWNERSHIP, TO BE LESSEES UNDER THE
RECREATIONAL FACILITIES LEASE;
(iii) UNIT OWNERS ARE REQUIRED TO PAY THEIR
SHARE OF THE COSTS AND EXPENSES OF MAINTENANCE,
MANAGEMENT, UPKEEP, REPLACEMENT, RENT, AND FEES
UNDER THE RECREATIONAL FACILITIES LEASE (OR THE
OTHER INSTRUMENT PROVIDING THE FACILITIES); or
(iv) a similar statement of the nature of the organization or
the manner in which the use rights are created and that unit owners are
required to pay.
Immediately following the applicable statement from this subitem the
location in the disclosure materials where the development is described
in detail must be stated.
(c) If the developer or a person, other than the unit owners and
other persons having use rights in the facilities, receives or is entitled to
receive rent, a fee, or other payment for the use of the facilities, then this
statement must appear in conspicuous type: THE UNIT OWNERS OR
THE ASSOCIATION(S) MUST PAY RENT OR LAND USE FEES
FOR RECREATIONAL OR OTHER COMMONLY USED
FACILITIES. Immediately following this statement the location in the
disclosure materials where the rent or land use fees are described in
detail must be stated.
(d) If in a leasehold, club, or other recreation format a person
other than the association has the right to a lien on the units to secure the
payment of assessments, rent, or other exactions, a statement must
appear in conspicuous type in substantially this form:
(i) THERE IS A LIEN OR LIEN RIGHT AGAINST
EACH UNIT TO SECURE THE PAYMENT OF RENT AND OTHER
EXACTIONS UNDER THE RECREATION LEASE. THE UNIT
OWNER'S FAILURE TO MAKE THESE PAYMENTS MAY RESULT
IN FORECLOSURE OF THE LIEN; or
(ii) THERE IS A LIEN OR LIEN RIGHT AGAINST
EACH UNIT TO SECURE THE PAYMENT OF ASSESSMENTS OR
OTHER EXACTIONS COMING DUE FOR THE USE,
MAINTENANCE, UPKEEP, OR REPAIR OF THE RECREATIONAL
OR COMMONLY USED FACILITIES. THE UNIT OWNER'S
FAILURE TO MAKE THESE PAYMENTS MAY RESULT IN
FORECLOSURE OF THE LIEN.
Immediately following the applicable statement, the location in the
disclosure materials where the lien or lien right is described in detail
must be stated.
(9) if the developer or another person has the right to increase or
add to the recreational facilities any time after the establishment of a
condominium in which unit owners have use rights without requiring
consent of the unit owners or association, a statement must appear in
conspicuous type in substantially this form: RECREATIONAL
FACILITIES MAY BE EXPANDED OR ADDED WITHOUT
CONSENT OF UNIT OWNERS OR THE ASSOCIATION(S).
Immediately following this statement, the location in the disclosure
materials where these reserved rights are described must be stated.
(10) a statement whether the developer's plan includes a program
of leasing units rather than selling them or leasing units and selling them
subject to the leases. If the developer's plan includes one of these
programs, there must be a description of the plan, including the number
and identification of the units, the provisions and term of the proposed
leases, and this statement in boldfaced type: THE UNITS MAY BE
TRANSFERRED SUBJECT TO A LEASE.
(11) the arrangements for management of the association and
maintenance and operation of the condominium property and other
property that will serve the unit owners of the condominium property
and a description of the management contract and other contracts for
these purposes having a term in excess of one year, including:
(a) names of contracting parties;
(b) term of the contract;
(c) nature of the services included;
(d) monthly and annual compensation and provisions for
increasing compensation;
(e) reference to the volumes and pages of the condominium
documents and of the exhibits containing copies of these contracts.
Copies of these contracts must be attached as exhibits. If there is a
contract for the management of the condominium property, then a
statement in conspicuous type in substantially this form, identifying the
proposed or existing contract manager: THERE IS (IS TO BE) A
CONTRACT FOR THE MANAGEMENT OF THE CONDOMINIUM
PROPERTY WITH (NAME OF THE CONTRACT MANAGER).
Immediately following this statement the location in the disclosure
materials of the contract for management of the condominium property
must be stated.
(12) if the developer or a person other than the unit owners may
retain control of the board of administration of the association for more
than one year after the closing of the sale of a majority of the units in
that condominium to persons other than successors or alternate
developers, then a statement in conspicuous type in substantially this
form: THE DEVELOPER (OR OTHER PERSON) HAS THE RIGHT
TO RETAIN CONTROL OF THE ASSOCIATION AFTER A
MAJORITY OF THE UNITS HAVE BEEN SOLD. Immediately
following this statement the location in the disclosure materials where
this right to control is described in detail must be stated;
(13) if there are restrictions upon the sale, transfer, conveyance, or
leasing of a unit, then a statement in conspicuous type in substantially
this form: THE SALE, LEASE, OR TRANSFER OF UNITS IS
RESTRICTED OR CONTROLLED. Immediately following this
statement the location in the disclosure materials where the restriction,
limitation, or control on the sale, lease, or transfer of units is described
in detail must be stated;
(14) if the condominium is part of a phase project:
(a) a statement in conspicuous type in substantially this form:
THIS IS A PHASE CONDOMINIUM. ADDITIONAL LAND AND
UNITS MAY BE ADDED TO THIS CONDOMINIUM. Immediately
following this statement the location in the disclosure materials where
the phasing is described must be stated;
(b) a summary of the provisions of the declaration providing
for phasing;
(c) a statement whether residential buildings and units added to
the condominium may be substantially different from the residential
buildings and units originally in the condominium. If the added
residential buildings and units may be substantially different, there must
be a general description of the extent to which they may differ, and a
statement in conspicuous type in substantially this form: BUILDINGS
AND UNITS WHICH ARE ADDED TO THE CONDOMINIUM MAY
BE SUBSTANTIALLY DIFFERENT FROM THE OTHER
BUILDINGS AND UNITS IN THE CONDOMINIUM. Immediately
following this statement the location in the disclosure materials where
the extent to which added residential buildings and units may
substantially differ is described must be stated;
(d) a statement of the maximum number of buildings
containing units, the maximum and minimum numbers of units in each
building, the maximum number of units, and the minimum and
maximum square footage of the units that may be contained within each
parcel of land which may be added to the condominium;
(15) if the condominium is created by conversion of existing
improvements:
(a) the statements and disclosure requirements for a conversion
concerning the condition of the buildings and estimated replacement
costs;
(b) a statement that there are no express warranties unless they
are stated in writing by the developer;
(16) a summary of the restrictions to be imposed on units
concerning the use of the condominium property, including statements
whether there are restrictions regarding children and pets, and reference
to the volumes and pages of the condominium documents where these
restrictions are found or if these restrictions are contained in other
documents, then a copy of the documents containing the restrictions
must be attached as an exhibit;
(17) if there is any land offered by the developer for use by the unit
owners not owned or leased to the unit owners, the association, or an
entity controlled by unit owners and other persons having the use rights
to the land, a statement must be made how the land will serve the
condominium. If a part of that land will serve the condominium, the
statement must describe the land, the nature and term of service, and the
declaration or other instrument creating the servitude must be included
as an exhibit;
(18) the manner in which utility and other services, including, but
not limited to, sewage and waste disposal, water supply, and storm
drainage, will be provided and the person or entity furnishing them;
(19) an explanation of how the apportionment of common expenses
and ownership of the common elements has been determined;
(20) an estimated operating budget for the condominium and the
association and a schedule of the unit owner's expenses must be attached
as an exhibit and must contain:
(a) the estimated monthly and annual expenses of the
condominium and the association collected from unit owners by
assessments;
(b) the estimated monthly and annual expenses of each unit
owner, excluding assessments payable to the association and payable to
persons or entities other than the association, and the total estimated
monthly and annual expense. Expenses that are personal to unit owners
may be excluded if they are not uniformly incurred by all unit owners or
not provided for or contemplated by the condominium documents,
including, but not limited to, the cost of private telephones, maintenance
of the interior of a condominium unit which is not the obligation of the
association; maid or janitorial services privately contracted for by a unit
owner; utility bills directly billed to each unit owner for utility services
to his unit; insurance premiums excluding those incurred for policies
obtained by the condominium; and similar personal expenses of the unit
owner. A unit owner's estimated payments for assessments also must be
stated in the estimated amounts for the times when they will be due;
(c) the estimated items of expenses of the condominium and the
association, except those excluded under subitem (b), including, but not
limited to:
(i) an association expense collectible by these
assessments: administration of the association; management fees;
maintenance; rent for recreational and other commonly used facilities;
taxes upon association property; taxes upon leased areas; insurance;
security provisions; operating capital; reserves; fees payable to the
commission; and other expenses;
(ii) unit owner's expenses payable to persons other than the
association: rent for the unit, if subject to a lease; and rent payable by
the unit owner directly to the lessor or agent under a recreational lease
or lease for the use of commonly used facilities which is a mandatory
condition of ownership and is not included in the common expense or
assessments for common maintenance paid by the unit owners to the
association;
(d) the estimated amounts must be stated for at least a
twelve-month period and may distinguish between the period before the
unit owners, excluding the developer, elect a majority of the board of
administration and the period after that date;
(21) a schedule of estimated closing expenses to be paid by a buyer
or lessee of a unit and a statement whether title opinion or title insurance
policy is available to the buyer and, if so, at whose expense;
(22) the identity of the developer and the chief operating officer or
principal directing the creation and sale of the condominium and a
statement of their experience in this field;
(23) copies of these exhibits, if applicable:
(a) the declaration of condominium or the proposed declaration
if the declaration has not been recorded;
(b) the articles of incorporation creating the association;
(c) the bylaws of the association;
(d) the ground lease or other underlying lease of the
condominium;
(e) the management agreement and maintenance and other
contracts for management of the association and operation of the
condominium and facilities used by the unit owners having a service
term exceeding one year;
(f) the estimated operating budget for the condominium and the
required schedule of unit owners' expenses;
(g) a copy of the floor plan of the unit and the plot plan
showing the location of the residential buildings and the recreation and
other common areas;
(h) the lease of recreational and other facilities to be used only
by unit owners of the condominium;
(i) the lease of facilities used by owners and others;
(j) the form of unit lease, if the offer is of a leasehold;
(k) a declaration of servitude of properties serving the
condominium but not owned by or leased to unit owners or the
association;
(l) the statement of condition of any existing building, if the
offering is of units in an operation being converted to condominium
ownership;
(m) the statement of termite inspection for damage and
treatment of the existing improvements, if the condominium is a
conversion;
(n) the form of agreement for sale or lease of units;
(o) a copy of the agreement for escrow of payments made to
the developer before closing;
(p) a copy of the documents containing a restriction on use of
the property;
(24) a brief narrative description of the location and effect of
existing and intended easements located or to be located on the
condominium property, excluding those described in the declaration.
Section 27-30-1370. If a developer in good faith has attempted to
comply with the requirements of this article and if the developer has
substantially complied with the disclosure requirements of this chapter,
nonmaterial errors or omissions in the disclosure materials are not
actionable.
Section 27-30-1380. (A) A person who reasonably relies upon
a material statement or information that is false or misleading and
published by or under authority from the developer in advertising and
promotional materials, including, but not limited to, a prospectus, the
items required as exhibits to a prospectus, brochures, and newspaper
advertising, and pays anything of value toward the purchase of a
condominium parcel located in South Carolina has a cause of action to
rescind the contract or collect damages from the developer for his loss
before the closing of the transaction. After the closing of the
transaction, the purchaser has a cause of action against the developer for
damages under this section from the time of closing until one year after
the last of these occurs, but in no event longer than five years after the
close of the transaction:
(1) the closing of the transaction;
(2) the first issuance by the applicable governmental authority
of a certificate of occupancy or other evidence of sufficient completion
of construction of the building containing the unit to allow lawful
occupancy of the unit. For the purpose of this section in counties or
municipalities in which certificates of occupancy or other evidences of
completion sufficient to allow lawful occupancy are not customarily
issued, evidence of lawful occupancy is considered given or issued upon
the date that the lawful occupancy of the unit is first allowed under
prevailing applicable laws, ordinances, or statutes;
(3) the completion by the developer of the common elements
and the recreational facilities, whether or not they are common elements,
that the developer is obligated to complete or provide under the written
contract or written agreement for purchase or lease of the unit;
(4) if there is no written contract or agreement for sale or lease
of the unit, then the completion by the developer of the common
elements and the recreational facilities, whether or not they are common
elements, the developer would be obligated to complete under law
applicable to the developer's obligation.
(B) The prevailing party may recover reasonable attorney's fees
in an action for relief under this section or to void a contract for the sale
of a residential unit or a lease for five years or more.
Article 6
Conversions to Condominium
Section 27-30-1510. When existing improvements are converted
to ownership as a residential condominium:
(1)(a) A residential tenant who has resided in the existing
improvements for at least the one hundred eighty days preceding the
date of the written notice of intended conversion may extend an expiring
rental agreement upon the same terms for a period that will expire no
later than two hundred seventy days after the date of the notice. If the
rental agreement expires more than two hundred seventy days after the
date of the notice, the tenant may not unilaterally extend the rental
agreement.
(b) Other residential tenants may extend an expiring rental
agreement upon the same terms for a period that will expire no later than
one hundred eighty days after the date of the written notice of intended
conversion. If the rental agreement expires more than one hundred
eighty days after the date of the notice, the tenant may not unilaterally
extend the rental agreement.
(2)(a) In order to extend the rental agreement pursuant to this section
a tenant must give written notice to the developer of the intention to
extend the rental agreement within forty-five days after the date of the
written notice of intended conversion.
(b) If the rental agreement expires within forty-five days
following the date of the notice, the tenant may remain in occupancy for
the forty-five day period upon the same terms by giving the developer
written notice and paying rent on a pro rata basis from the expiration
date of the rental agreement to the end of the forty-five day period.
(c) The tenant may extend the rental agreement for the full
extension period or a part of the period.
(3) After the date of a notice of intended conversion and upon
thirty days' written notice to the developer, a tenant may terminate a
rental agreement or an extension period having an unexpired term of one
hundred eighty days or less. However, unless the rental agreement was
entered into, extended, or renewed after the effective date of this article,
the tenant may not unilaterally terminate the rental agreement but upon
thirty days' written notice may unilaterally terminate an extension period
having an unexpired term of one hundred eighty days or less.
(4) A developer may elect to provide tenants who have been
continuous residents of the existing improvements for at least one
hundred eighty days preceding the date of the written notice of intended
conversion and whose rental agreements expire within one hundred
eighty days of the date of the written notice of intended conversion the
option of receiving in cash a tenant relocation payment at least equal to
one month's rent in consideration for extending the rental agreement for
not more than one hundred eighty days, rather than extending the rental
agreement for up to two hundred seventy days.
(5) A rental agreement may provide for termination by the
developer upon sixty days' written notice if the rental agreement is
entered into subsequent to the delivery of the written notice of intended
conversion to all tenants and conspicuously states that the existing
improvements are to be converted. No other provision in a rental
agreement is enforceable to the extent that it purports to reduce the
extension period provided by this section or otherwise would permit a
developer to terminate a rental agreement in the event of a conversion.
Section 27-30-1520. (A) Before or simultaneous with the first
offering of individual units to a person, the developer shall deliver a
notice of intended conversion to tenants of the existing improvements
being converted to residential condominium. These notices must be
given within a seventy-two hour period.
(B) (1) The notice of intended conversion must be dated and
in writing. The notice must contain these statements and those
appearing in upper case must be printed in conspicuous type:
These apartments are being converted to condominium by (name of
developer), the developer,
(a) YOU MAY REMAIN AS A RESIDENT UNTIL THE
EXPIRATION OF YOUR RENTAL AGREEMENT. FURTHER, YOU
MAY EXTEND YOUR RENTAL AGREEMENT AS FOLLOWS:
(i) If you have continuously been a resident of these
apartments during the last one hundred eighty days and your rental
agreement expires during the next two hundred seventy days you may
extend your rental agreement for up to two hundred seventy days after
the date of this notice.
(ii) If you have not been a continuous resident of
these apartments for the last one hundred eighty days and your rental
agreement expires during the next one hundred eighty days, you may
extend your rental agreement for up to one hundred eighty days after the
date of this notice.
(iii) IN ORDER FOR YOU TO EXTEND YOUR
RENTAL AGREEMENT, YOU MUST GIVE THE DEVELOPER
WRITTEN NOTICE WITHIN FORTY-FIVE DAYS AFTER THE
DATE OF THIS NOTICE.
(b) IF YOUR RENTAL AGREEMENT EXPIRES IN THE
NEXT FORTY-FIVE DAYS, you may extend your rental agreement for
up to forty-five days after the date of this notice while you decide
whether to extend your rental agreement as explained above. To do so
you must notify the developer in writing. You will then have the full
forty-five days to decide whether to extend your rental agreement as
explained above.
(c) During the extension of your rental agreement you will be
charged the same rent that you are now paying.
(d) YOU MAY CANCEL YOUR RENTAL
AGREEMENT AND ANY EXTENSION OF THE RENTAL
AGREEMENT upon thirty days' written notice and move.
(e) All notices must be given in writing and sent by mail,
return receipt requested, or delivered in person to the developer at this
address: (Name and address of developer).
(f) If you have continuously been a resident of these
apartments during the last one hundred eighty days:
(i) You have the right to purchase your apartment and
will have forty-five days to decide whether to purchase. If you do not
buy the unit at the offered price and the unit is later offered at a lower
price, you have the opportunity to buy the unit at the lower price.
However, in all events your right to purchase the unit ends when the
rental agreement or any extension of the rental agreement ends or when
you waive this right in writing.
(ii) Within ninety days you will be provided purchase
information relating to your apartment including the price of your unit
and the condition of the building. If you do not receive this information
within ninety days, your rental agreement and any extension will be
extended one day for each day over ninety days until you are given the
purchase information. If you do not want this rental agreement
extension, you must notify the developer in writing.
(g) If you have any questions regarding this conversion or
the South Carolina Condominium Act, you may contact the developer
or the state agency which regulates condominiums: the South Carolina
Real Estate Commission, 1201 Main Street, Suite 1500, Columbia,
South Carolina 29201 (803) 737-0700.
(2) When a developer offers tenants an optional tenant
relocation payment pursuant to this article, the notice of intended
conversion must contain this statement substantially as follows:
If you have been a continuous resident of these apartments for the
last one hundred eighty days and your lease expires during the next one
hundred eighty days, you may extend your rental agreement for up to
two hundred seventy days, or you may extend your rental agreement for
up to one hundred eighty days and receive a cash payment at least equal
to one month's rent. You must make your decision and inform the
developer in writing within forty-five days after the date of this notice.
(C) Notice of intended conversion may not be waived by a tenant
unless the tenant's lease conspicuously states that the building is to be
converted and the other tenants residing in the building have previously
received a notice of intended conversion.
(D) Upon the request of a developer and payment of a fee
prescribed by the regulations of the commission, not to exceed one
hundred dollars, the commission may verify to a developer that a notice
complies with this section.
(E) A developer shall file with the commission a copy of the
notice of intended conversion. The copy of the notice must be filed with
the commission no later than the time when the notice is given to the
tenants.
Section 27-30-1530. (A) A notice from a tenant to a developer
is considered given when deposited in the United States mail, addressed
to the developer's address as stated in the notice of conversion, and sent
postage prepaid, return receipt requested, or when personally delivered
in writing by the tenant to the developer at that address. The date of a
notice is the date when it is mailed or personally delivered by the tenant.
(B) A notice from a developer to a tenant is considered given
when deposited in the United States mail, addressed to the tenant's last
known residence, which may be the address of the property subject to
the rental agreement, and sent by certified or registered mail, postage
prepaid. The date of a notice is the date when it is mailed to the tenant.
Section 27-30-1540. (A) A tenant, who for the one hundred
eighty days preceding a notice of intended conversion has been a
residential tenant of the existing improvements, has the right of first
refusal to purchase the unit in which he resides on the date of the notice
under these terms and conditions:
(1) Within ninety days following the written notice of the
intended conversion, the developer shall deliver to the tenant these
purchase materials: an offer to sell stating the price and terms of
purchase, the economic information required by Section 27-30-1550 and
the disclosure of documents required by Article 5. The failure by the
developer to deliver the purchase materials within ninety days following
the written notice of the intended conversion automatically extends the
rental agreement, an extension of the rental agreement provided for in
this article, or any other extension of the rental agreement. The
extension is for the number of days in excess of ninety days that has
elapsed from the date of the written notice of the intended conversion to
the date when the purchase materials are delivered.
(2) The tenant has the right of first refusal to purchase the unit
for at least forty-five days after mailing or personal delivery of the
purchase materials.
(3) If after a right of first refusal has expired, the developer
offers the unit at a price lower than that offered to the tenant, the
developer must notify the tenant in writing before the publication of the
offer. The tenant has the right of first refusal at the lower price for at
least an additional ten days after the date of the notice. Thereafter the
tenant has no additional right of first refusal. As used in this item, `offer'
includes a solicitation to the general public by means of newspaper
advertisement, radio, television, or written or printed sales literature or
price list but does not include a transaction involving the sale of more
than one unit to one purchaser.
(B) Before closing on the sale of the unit a tenant alleging the
developer violated subsection (A)(3) may bring an action for equitable
or other relief, including specific performance. Subsequent to closing,
the tenant's sole remedy for violation is damages. In addition to
damages otherwise recoverable by law, the tenant is entitled to an
amount equal to the difference between the price last offered in writing
to the tenant pursuant to this section and the price at which the unit was
sold to a third party, plus court costs and attorney's fees.
(C) No developer may enforce a provision of contract which
purports to waive the right of a purchasing tenant to bring an action for
specific performance.
(D) A tenant's right of first refusal terminates upon:
(1) the termination of the rental agreement and any extensions
of the rental agreement;
(2) waiver of the right in writing by the tenant if the waiver is
executed subsequent to the date of the notice of intended conversion. A
tenant who waives the right of first refusal waives the right to receive the
purchase materials; or
(3) the running of the tenant's forty-five day right of first
refusal and the additional ten- day period provided for by subsection
(A)(3), if applicable.
Section 27-30-1550. The developer shall distribute to tenants
having a right of first refusal:
(1) information in summary form regarding mortgage
financing; estimated down payment; alternative financing and down
payments; monthly payments of principal, interest, and real estate taxes;
and federal income tax benefits;
(2) market information, if any, compiled from developers on
a voluntary basis and prepared by the commission, describing
condominium units which have been offered for sale within the last
twelve months in the county in which the tenants reside. The market
information must include substantially this statement: This information
is from the files of the South Carolina Real Estate Commission. It is
believed to be correct but is not warranted by the South carolina Real
Estate Commission or the condominium developers. If you desire
additional information, you may contact the developer or a real estate
agent.;
(3) other information the commission publishes, makes
available to the developer, and by regulation determines will assist
tenants in making a decision.
Section 27-30-1560. (A) A developer creating a residential
condominium by converting existing, previously occupied
improvements shall disclose the condition of the improvements and the
condition of certain components and their current estimated replacement
costs.
(B) The following must be stated concerning the improvements:
(1) the date and type of construction;
(2) the prior use;
(3) whether there is termite damage or infestation, and, if any,
whether it has been properly treated. The statement must be
substantiated by including, as an exhibit, an inspection report by a
certified pest control operator.
(C) (1) The condition of the following in existing
improvements must be disclosed:
(a) roof;
(b) structure;
(c) fireproofing and fire protection systems;
(d) elevators;
(e) heating and cooling systems;
(f) plumbing;
(g) electrical systems;
(h) swimming pool;
(i) seawalls;
(j) pavement and parking areas;
(k) drainage systems.
(2) The following information for each item in subsection
(C)(1) must be disclosed and substantiated by attaching a copy of a
certificate under seal of an architect or engineer authorized to practice
in this State:
(a) age;
(b) the estimated remaining useful life;
(c) the estimated current replacement cost expressed as a total
amount and as a per-unit amount, based upon each unit's proportional
share of the common expenses;
(d) the structural and functional soundness.
Section 27-30-1570. (A) When existing improvements are
converted to ownership as a residential condominium, the developer
shall establish reserve accounts for capital expenditures and deferred
maintenance or give warranties or post a surety bond in accordance with
this section. The developer shall fund the reserve accounts as follows:
(1) (a) When the existing improvements include an air
conditioning system serving more than one unit or property which the
association is responsible to repair, maintain, or replace, the developer
shall fund an air conditioning reserve account. When the air
conditioning system includes a central air or water cooling system, the
amount of the reserve account must be at least one dollar for each square
foot of floor area served by the air conditioning system multiplied by a
fraction; the numerator must be the lesser of the age of the system in
years or nine, and the denominator must be ten. When the air
conditioning system is within one thousand yards of the seacoast, the
numerator must be the lesser of the age of the system in years or three,
and the denominator must be four.
(b) The developer shall fund a plumbing reserve account.
The amount of the funding must be at least thirty cents for each square
foot of floor area in the existing improvements multiplied by a fraction;
the numerator must be the lesser of the age of the plumbing years or
thirty-six, and the denominator must be forty.
(c) The developer shall fund a roof reserve account. The
amount of the funding must be at least the unit amount for each square
foot of roof multiplied by a fraction; the numerator must be the lesser of
the age of the roof in years or the numerator listed in the following table.
The unit amount and the denominator of the fraction must be determined
by the roof type, as follows:
Roof Type Unit Amount Numerator Denominator
Built-up
roof with-
out
insulation $0.90 4 5
Built-up
roof with
insulation $1.40 4 5
Cement tile $1.80 45 50
Asphalt
shingle $1.80 14 15
Copper
roof 0.00
Wood
shingle $1.70 9 10
All other $1.00 18 20
The amount required for the roof reserve account must be increased by
twenty percent if the roof pitch is greater than six to twelve.
(2) The age of a component or structure for which the
developer is required to fund a reserve account must be measured in
years from the later of:
(a) the date the component or structure was replaced
or substantially renewed, if the replacement or renewal of the component
met the requirements of the building code applicable at that time; or
(b) the date the installation or construction of the
existing component or structure was completed.
(3) When the date of a component or structure is to be
measured from the date of replacement or renewal, the developer shall
provide the commission with an affidavit of the developer, its agent, or
an engineer authorized to practice in this State verifying:
(a) the date of replacement or renewal; and
(b) that the replacement or renewal met the
requirements of the building code applicable at that time.
(B) (1) The developer shall fund the reserve account on a pro rata
basis upon the sale of each unit. The developer shall deposit in the
reserve account at least a percentage of the total amount to be deposited
in the reserve account equal to the percentage of ownership of the
common elements allocable to the unit sold. When a developer deposits
in excess of the minimum amount required in a reserve account, later
deposits may be reduced to the extent of the excess. For the purposes of
this subsection, a unit is considered sold when a fee interest in the unit
is transferred to a third party or the unit is leased for a period exceeding
five years.
(2) When an association makes an expenditure of reserve
account funds before the developer has sold all units, the developer shall
make a deposit in the reserve account. The deposit must be at least
equal to that portion of the expenditure which would be charged against
the reserve account deposit that would have been made for any unit had
the unit been sold. The deposit may be reduced to the extent the
developer has funded the reserve account in excess of the minimum
amount required by this subsection. This subsection applies only when
the developer has funded a reserve account as provided by this section.
(C) Reserve account funds may be spent before the unit owners,
excluding the developer, assume control of the association. Reserve
account funds may be expended only for repair or replacement of the
specific components for which the funds were deposited, unless after the
unit owners, excluding the developer, assume control of the association
three-fourths of all unit owners vote to expend the funds for other
purposes.
(D) The developer shall establish the reserve account in the name
of the association at a bank, savings and loan association or trust
company located in this State.
(E) A developer may establish and fund additional reserve
accounts.
(F) The commission annually shall review the funding amounts
established by this section. In reviewing the funding amounts the
commission shall consider changes in the cost and availability of labor
and materials; advances in construction techniques; technological
changes; interest rates; inflation; published construction costs estimating
tables; and the comments of members of the public, including
representatives of the construction industry and apartment industry,
particularly general contractors, air conditioning contractors, plumbing
contractors, roofing contractors, architects, and engineers. When the
commission determines that the funding amounts require adjustment, the
commission shall conduct public hearings and make recommendations
to the General Assembly.
(G)(1) A developer makes no implied warranties when existing
improvements are converted to ownership as a residential condominium
and reserve accounts are funded in accordance with this section. As an
alternative to establishing reserve accounts or when a developer fails to
establish the reserve accounts in accordance with this section, the
developer is considered to have granted the purchaser of each unit an
implied warranty of fitness and merchantability for the purposes or uses
intended, on the roof and structural components of the improvements;
on fireproofing and fire protection systems; and on mechanical,
electrical, and plumbing elements serving the improvements, except
mechanical elements serving only one unit. The warranty is for three
years beginning with the notice of intended conversion; for three years
beginning with the recording of the declaration to condominium; or for
one year after owners, excluding the developer, obtain control of the
association, whichever occurs last, but in no event more than five years.
(2) The warranty provided for in this subsection is
conditioned upon routine maintenance being performed unless the
maintenance is an obligation of the developer or a developer-controlled
association.
(3) The warranty inures to the benefit of each owner and
successor owner.
(4) Existing improvements converted to residential
condominium may be covered by an insured warranty program
underwritten by an insurance company authorized to do business in this
State if the warranty program meets the minimum requirements of this
chapter. To the extent that the warranty program does not meet the
minimum requirements of this chapter, the requirements of this chapter
apply.
(H) When a developer desires to post a surety bond, after
notification to the buyer, the developer shall acquire a surety bond
payable to the association issued by a company licensed to do business
in this State if a bond is readily available in the open market in an
amount equal to the total amount of all reserve accounts required under
this section.
Section 27-30-1580. When existing improvements are converted
to condominium, tenants who have not purchased a unit in the
condominium being created have the same rights, privileges, and
services, during the remaining term of the rental agreement and any
extension of the rental agreement that were enjoyed by tenants before
the date of the written notice of conversion and that are granted, offered,
or provided to purchasers."
SECTION 2. Section 16-1-10 of the 1976 Code, as last amended by
Act 604 of 1990, is further amended by adding to the list of crimes
classified as a felony:
"Section 27-30-620 (failure of condominium developer to
properly handle escrow funds)."
SECTION 3. Chapter 31, Title 27 of the 1976 Code is repealed.
SECTION 4. This act takes effect upon approval by the Governor.
-----XX----- |