South Carolina Legislature


 

(Use of stop words in a search will not produce desired results.)
(For help with formatting search criteria, click here.)
h.h. keyserling found 1 time.    Next
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-----



Legislative Services Agency
h t t p : / / w w w . s c s t a t e h o u s e . g o v