Reference is to Printer's Date 04/22/15-H.
Amend the bill, as and if amended, by deleting all after the enacting words and inserting:
/ SECTION 1. Article 1, Chapter 11, Title 1 of the 1976 Code is amended by adding:
"Section 1-11-15.
(A) As used in this section, the
term:
(1) 'Common interest
community association' means an organization as defined by
Section 27-28-20(1).
(2) 'Board members'
means property owners elected to and serving on the governing
body of a common interest community association.
(3) 'Property owners'
means persons owning property that requires membership in a
common interest community association under the terms of a deed,
covenant, condition, or restriction running with title to their
property or their tenants or designees.
(B) Effective July 1,
2015, the Commission for Common Interest Community Education and
Manager Certification is created and shall consist of nine
members comprised of the following:
(1)
three management members, appointed by the Governor with
the advice and consent of the Senate, who each have three or
more years of experience working as managers for one or more
common interest community associations;
(2)
one attorney member, appointed by the Governor with the
advice and consent of the Senate, who has three or more years of
experience working as an attorney for one or more common
interest community associations;
(3)
two resident members, appointed by the Governor with the
advice and consent of the Senate, who each have been or are
board members in one or more common interest community
associations for three or more years;
(4)
the Director of the Department of Labor, Licensing and
Regulation, or his designee, ex officio;
(5)
the Administrator for the Department of Consumer Affairs,
or his designee, ex officio; and
(6)
the Director of the Department of Administration, or his
designee, ex officio, who shall serve as chairman.
(C) The commission must
be under and a part of the Department of Administration.
(D) Members not serving
ex officio shall serve for terms of six years and until their
successors are appointed and qualified. Vacancies must be filled
in the manner of original appointment for the unexpired portion
of the term. Members shall serve without compensation, but are
allowed mileage, subsistence, and per diem as provided by law
for members of state boards, committees, and commissions to be
paid from the general fund of the State. No appointed member is
eligible to serve more than two consecutive terms. A quorum for
transacting business at all meetings of the commission shall
consist of a majority of the membership of the commission. This
provision does not apply to the first appointed members, who
will serve the following terms:
(1)
one management and one resident or attorney member must
each serve for a term of two years and the term must be noted on
the appointments;
(2)
one management and one resident or attorney member must
each serve for a term of four years and the term must be noted
on the appointments; and
(3)
one management and one resident or attorney member must
each serve for a term of six years and the term must be noted on
the appointments.
(E) The commission
shall:
(1)
determine the educational and professional requirements
and the courses, programs, and experience that satisfies those
educational and professional requirements for persons to be
certified as managers of common interest community associations
as defined in Section 27-28-20 and a horizontal property
association as defined in Section 27-31-20, et seq;
(2)
approve of an examination that employs the basic
principles of professional testing standards using psychometric
measurement. The examination must use standards set forth by the
National Organization for Competency Assurances and must be
approved by the commission; and
(3)
promulgate regulations to establish a procedure for a
person who meets the educational, examination and professional
requirements to be certified as managers of common interest
community associations and horizontal property
associations."
SECTION 2. Title 27 of the 1976 Code is amended by adding:
Section 27-28-10. This chapter must be known and cited as the 'South Carolina Common Interest Community Association Act'.
Section 27-28-20. As
used in this article, the term:
(1)(a) 'Association'
means properties or entities organized under the South Carolina
Horizontal Property Act or a common interest community
organization to which property owners are required to:
(i)
belong under the terms of a deed, covenant, condition, or
restriction that runs with title to the property;
(ii)
abide by its governing documents; and
(iii)
pay assessments, fees, fines, and other costs.
(b)
An 'association' does not include a vacation time sharing
plan organized and subject only to the provisions of Chapter 32
of this title or a voluntary organization entered into by
personal agreement and for which membership is not a requirement
running with title to the property.
(2) 'Board' means the
representative and elected governing body of the association.
(3) 'Governing
documents' means the master deed, covenants, conditions,
restriction, articles of incorporation, and bylaws that
establish and control the operations of an association and
provide for assessments, fees, fines, and other costs.
(4) 'Notice' means,
unless otherwise provided in the association's governing
documents, any practicable form of communication, such as in
person, by telephone, telegraph, teletype, facsimile
transmission, another form of wire or wireless communication, by
mail, or private carrier. If these forms of personal notice are
impracticable, notice may be communicated by posting on the
association's website or in a conspicuous location on the
association common property which may include an association
bulletin board or mail kiosk.
(5) 'Property owner'
means a person owning property that requires membership in an
association under the terms of a deed, covenant, condition, or
restriction running with title to their property.
Section 27-28-30. (A)
An association must file the association's
governing documents with the county clerk of court or register
of deeds in the county where the association is located unless
the governing documents are filed before January 1, 2016, or
thirty days after an association has organized and is operating.
The association must pay a filing fee no greater than the fee
charged for recording deeds in the county.
(B) An amendment to the
governing documents may not be effective until it is filed with
the county clerk of court or register of deeds.
(C) Upon request, an
association must provide a seller of property that requires
association membership with the designation where the governing
documents are recorded in the clerk of court or register of
deeds' office by a prospective property owner.
(D) The seller of
property that requires association membership must provide the
information concerning where governing documents are recorded in
the clerk of court or register of deeds' office to a prospective
property owner no less than five business days prior to the
prospective property owner's closing on the property.
Section 27-28-40.
(A)(1) Within six months after being
elected or appointed to the board of an association, each newly
elected or appointed board member shall certify in writing to
the president of the association that they:
(a)
have read the association's declaration, articles of
incorporation, bylaws, and current written policies;
(b)
will work to uphold these documents and policies to the
best of their ability;
(c)
understand the duties of a fiduciary to the homeowners;
and
(d)
will faithfully discharge their fiduciary responsibility
to the association's members and attest to uphold the community
association guidelines and code of ethics for community
association board members.
(2)
The board shall:
(a)
annually conduct at least one membership meeting,
providing at least two weeks' advance notice to property owners
or more if specified in the governing documents;
(b)
collect assessments and other fees from homeowners in a
timely and equitable manner and pursuant to state law, governing
documents, and board-approved procedures;
(c)
provide at least one form of regular communication with
property owners, and use it to report substantive actions taken
by the board;
(d)
disclose all personal and financial conflicts of interest
before assuming a board position and, once on the board, before
participating in any board transactions or decisions;
(e)
hold fair and open elections in strict conformance with
governing documents, giving all candidates an equal opportunity
to express their views and permitting each candidate to have a
representative observe the vote-counting process;
(f)
share critical information and rationale with property
owners about budgets, reserve funding, special assessments and
other issues that could impact their financial obligations to
the association;
(g)
initiate lien and foreclosure proceedings only as a last
step in a welldefined, debt-collection procedure to resolve a
delinquency issue in a specified period of time;
(h)
govern and manage the community pursuant to all applicable
laws and regulations, including conducting reviews of governing
documents to ensure legal compliance and to determine whether
amendments are necessary;
(i)
allow property owners to bring grievances before the board
or a board-appointed committee and follow well-publicized
procedures that give property owners the opportunity to correct
violations before imposing fines or other sanctions;
(j)
allow property owners reasonable access to appropriate
community records, including annual budgets and board meeting
minutes; and
(k)
account for anticipated long-term expenditures as part of
the annual budget-development process, commissioning a reserve
study when professional expertise is warranted, but no less
often than required by the governing documents.
(3)
A member appointed to the board of an association
uniformly shall enforce all rules, including architectural
guidelines, but only after seeking compliance on a voluntary
basis. Once adopted, new rules and effective dates must be
provided to every owner within ten business days.
(4)
A member appointed to the board of an association must
adhere to the code of ethics for community association board
members by:
(a)
striving at all times to serve the best interests of the
association as a whole regardless of their personal interests;
(b)
using sound judgment to make the best possible business
decisions for the association, taking into consideration all
available information, circumstances and resources;
(c)
acting within the boundaries of their authority as defined
by law and the governing documents of the association;
(d)
providing opportunities for property owners to comment on
decisions facing the association;
(e)
performing their duties without bias;
(f)
disclosing personal or professional relationships with a
company or individual who conducts or is seeking to conduct a
business relationship with the association;
(g)
conducting open, fair and well-publicized elections;
and
(h)
always showing respect for the other members and decisions
of the board.
(B) An association must
retain:
(1)
detailed records of receipts and expenditures affecting
the operation and administration of the association;
(2)
minutes of all meetings of its owners and board other than
executive sessions, a record of all actions taken by the owners
or executive board without a meeting, and a record of all
actions taken by a committee in place of the executive board on
behalf of the association;
(3)
the names of owners in a form that permits preparation of
a list of the names of all owners and the addresses at which the
association communicates with them, in alphabetical order
showing the number of votes each owner is entitled to cast;
(4)
original or restated organizational documents, if required
by a law other than this act, the association's governing
documents, bylaws and all amendments to them, and all rules
currently in effect;
(5)
all financial statements and tax returns of the
association for the past three years;
(6)
a list of the names and addresses of its current board
members and officers;
(7)
copies of current contracts to which it is a party;
(8)
records of board or committee actions to approve or deny
requests for design or architectural approval from property
owners; and
(9)
ballots, proxies, and other records related to voting by
property owners for one year after the election, action, or vote
to which they relate.
(C)(1) An association
shall make records retained pursuant to subsection (B) available
for examination and copying by a property owner or the owner's
authorized agent's reasonable request:
(a)
during reasonable business hours or at a mutually
convenient time and location; and
(b)
upon five days notice in a manner that reasonably
identifies the specific records requested.
(2)
Records retained by an association may be withheld from
inspection and copying to the extent that they concern:
(a)
personnel, salary, and medical records relating to
specific individuals;
(b)
contracts, leases, and other commercial transactions to
purchase or provide goods or services currently being
negotiated;
(c)
existing or potential litigation or mediation,
arbitration, or administrative proceedings;
(d)
existing or potential matters involving federal, state, or
local administrative or other formal proceedings before a
governmental tribunal for enforcement of the declaration,
bylaws, or rules;
(e)
communications with the association's attorney which are
otherwise protected by the attorney-client privilege or the
attorney work-product doctrine;
(f)
information, the disclosure of which would violate the
law;
(g)
records of an executive session of the executive board;
or
(h)
individual unit files other than those of the requesting
owner.
(3)
An association may charge a reasonable fee for providing
copies of any records under this section and for supervising the
unit owner's inspection.
(4)
An association is not obligated to compile or synthesize
information.
(5)
Information provided pursuant to this section may not be
used for commercial purposes.
Section 27-28-60. (A)
A membership meeting of an association must
be open to the property owners unless closed pursuant to Section
27-28-70.
(B) A chance meeting or
social meeting may not be used to circumvent the spirit of
requirements of this chapter.
(C) This chapter does
not prohibit the removal of a person who wilfully disrupts a
meeting to the extent that orderly conduct of the meeting is
seriously compromised.
(D) Except when a
meeting is closed pursuant to Section 27-28-70, all or any part
of an association meeting may be recorded by a property owner in
attendance by any means of audio or video reproduction, provided
that:
(1)
the recording does not actively interfere with the conduct
of the meeting;
(2)
the association is not required to furnish recording
facilities or equipment; and
(3)
the owner provides notice of recording.
Section 27-28-70. (A)
An association may hold an executive session
closed to the property owners for one or more of the following
reasons:
(1)
discussion of employment, compensation, promotion,
demotion, discipline, or release of an employee; however, if an
adversary hearing involving the employee is held, the employee
has the right to demand that the hearing be conducted
publicly;
(2)
discussion of a property owner's personal information
where disclosure would constitute an unreasonable invasion of
the property owner's personal privacy; however, if an adversary
hearing involving the property owner is held, the property owner
has the right to demand that the hearing be conducted
publicly;
(3)
discussion of negotiations incident to proposed
contractual arrangements;
(4)
the receipt of legal advice where the legal advice relates
to a pending, threatened, or potential claim or other matters
covered by the attorney-client privilege;
(5)
discussion regarding security personnel or devices; or
(6)
investigative proceedings regarding allegations of
criminal misconduct.
(B) Before going into
executive session the association must vote in public on the
question of entering executive session and when the vote is
favorable, the presiding officer shall announce the specific
purpose of the executive session.
(C) An action may not
be taken in executive session except to adjourn or return to
public session.
(D) The association
board may not commit the association to a course of action by
polling board members in executive session.
Section 27-28-80. (A)
An association board must give notice of its
regular meetings as defined by the governing documents at the
beginning of each calendar year. The notice must include the
dates, times, and places of such board meetings.
(B) Notice of the
agenda must be available at least twenty-four hours before a
meeting.
(C) If a regular board
meeting is rescheduled, written public notice must be provided
as soon as practicable and must include the agenda, date, time,
and place of the meeting. This requirement does not apply to
emergency meetings.
(D) Notice must be
provided to each property owner. In addition, written public
notice must be posted in a conspicuous manner in a common area
in the community designated for public notices including, but
not limited to, the association's website.
Section 27-28-90. (A)
A property owner or the association may
apply to the circuit court by petition for declaratory judgment
and injunctive relief to enforce the provisions of this chapter
after exhausting all statutory administrative remedies or in the
association's governing documents.
(B)(1) Unless a
specific procedure for the imposition of fines or suspension of
planned community privileges or services is provided in the
governing documents, a hearing must be held before the board or
an adjudicatory panel appointed by the board to determine if a
lot owner should be fined or have his association privileges or
services suspended pursuant to the powers granted to the
association. An adjudicatory panel appointed by the board must
be composed of members of the association and members of the
board. The property owner charged must be given notice of the
charge, an opportunity to be heard and to present evidence, and
notice of the decision.
(2)
If the board decides that a fine should be imposed, a fine
not to exceed the amounts provided in the association's
governing documents or an amount approved by the board may be
imposed for the violation and without further hearing, for each
day more than five days after the decision that the violation
occurs. The fines must be assessments secured by liens and may
be collected pursuant to the governing documents. If the board
decides that a suspension of planned community privileges or
services should be imposed, the suspension may be continued
without further hearing until the violation or delinquency is
cured. If the board decides to initiate foreclosure of the
lien, the board shall provide notice to the mortgage
creditor.
(3)
The lot owner may appeal the decision of an adjudicatory
panel to the full board by delivering written notice of appeal
to the board within fifteen days after the date of the decision.
On appeal, the board shall affirm, vacate, or modify the prior
decision of the adjudicatory body within thirty days.
(C) After exhaustion of
the remedies set forth in subsection (B) and upon petition to
the circuit court, the court shall refer the matter to a master
or special referee pursuant to the provisions of Rule 53 of the
South Carolina Rules of Civil Procedure. All parties, the court,
and the master or referee shall endeavor to have the matter
heard within ninety days after the filing of the petition. Any
further remedy must be pursuant to Rule 53 of the South Carolina
Rules of Civil procedure."
SECTION 3. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.