Understanding Homeowners Associations (HOAs) in South Carolina

Once you're under contract to purchase a property within an HOA community, a thorough review of the association is critical. This due diligence period allows you to:

• Understand your potential living environment:

• CC&Rs Deep Dive: Scrutinize the Covenants, Conditions, and Restrictions for rules on:

• Architectural guidelines: Exterior modifications, landscaping, fencing

• Property maintenance: Lawn care, trash disposal

• Pet restrictions: Breed limits, leash laws

• Rental restrictions: Short-term rentals, tenant screening

• Use of common areas: Pools, clubhouses, recreational facilities

• Assess Financial Health:

• Obtain financial statements: Request recent income statements and balance sheets from the HOA.

• Analyze fees: Review current and historical HOA fees. Inquire about potential special assessments for major repairs or improvements.

• Debt review: Investigate any outstanding debt or liens against the HOA.

• Evaluate Community Management:

• Board of Directors: Inquire about current board members and their experience.

• Management Company: If applicable, research the management company's reputation and experience.

• Communication: Assess how the HOA communicates with residents (newsletter, website, email).

• Inspect Common Areas:

• Assess the condition of pools, clubhouses, playgrounds, and other amenities.

• Neighbor Feedback:

• If possible, discreetly speak with current residents about their experiences living in the community.

Timeline for HOA Review:

• Due Diligence Period: The length of the due diligence period is typically outlined in your purchase contract. Common durations range from 7 to 15 days.

• HOA Information Request:

• Immediately request the necessary documents from the seller or their representative: CC&Rs, financial statements, recent meeting minutes.

• Review Timeline:

• Allocate sufficient time for careful review of all documents.

• Consider consulting with an attorney specializing in HOA law for guidance.

Important Considerations:

• Don't rush the review: Thoroughly review all information before making any decisions.

• Communicate with your agent: Keep your real estate agent informed of any concerns or issues that arise during the review.

• Utilize your due diligence period effectively: This period is crucial for making an informed decision about your purchase.

By diligently reviewing the HOA during the contract period, you can ensure that your purchase aligns with your expectations and minimize potential future issues.