South Carolina HOA and COA Foreclosures
If you default on HOA or COA dues and assessments in South Carolina, the homeowners association can foreclosure on your condo, townhome, or house.
If you live in a condominium, single-family house, or townhome that is part of a common interest development in South Carolina, you are most likely responsible for paying dues and assessments to a condominium association (COA) or homeowners’ association (HOA). If you fall behind in payments, in most cases the COA or HOA can get a lien on your home that could lead to a foreclosure.
Read on to learn about the particular requirements for COA and HOA foreclosures in South Carolina.
South Carolina COA Laws
The Horizontal Property Act (S.C. Code Ann. §§ 27-31-10 through 27-31-440) governs COAs in South Carolina.
South Carolina HOA Laws
In recent years, several bills have been introduced in South Carolina to add a Homeowners’ Association Act to the state statutes, but none have passed. There is such a bill currently pending, but it was referred to committee on January 14, 2014, and may not go any further. (Stay tuned for details.)
Since HOAs in South Carolina are often incorporated as nonprofit corporations, they are subject to the South Carolina Nonprofit Corporation Act of 1994, which can be found at §§ 33-31-101 et seq. of the state statutes.
HOAs are also controlled by their governing documents, which include the Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. The specific rules regarding assessments liens can typically be found in these governing documents. (You should have received copies of the CC&Rs and bylaws when you purchased your property. Find out more about what's in your HOA CC&Rs and other relevant documents in Nolo’s article Before Buying: How to Read the CC&Rs or Homeowners' Association (HOA) Documents.)
How COA and HOA Liens Work
In most cases, a COA or HOA has the power to place a lien on your property if you become delinquent in paying the monthly dues and/or any special assessments (collectively referred to as assessments). Generally, the lien will automatically attach to the home from the time that the assessment comes due.
Charges the COA or HOA May Include in the Lien
State law and the COA or HOA’s governing documents will usually set out the type of charges that may be included in the lien. In South Carolina, a COA lien consists of all unpaid sums for common expenses (S.C. Code Ann. § 27-31-210 (a)).
Typically, an HOA is permitted to include:
- past-due assessments
- late charges
- collection costs
- interest, and
- attorney’s fees and costs.
To find out which charges a particular South Carolina HOA may include in its lien, check the association's CC&Rs or other governing documents.
Lien priority determines what happens to other liens, mortgages, and lines of credit if your HOA or COA lien is foreclosed. (To learn more about lien priority and its importance in HOA foreclosures, see What happens to my mortgages if the HOA forecloses on its lien?)
In South Carolina, a COA’s lien is prior to all other liens, except for:
- tax liens
- recorded mortgages, and
- other recorded liens (S.C. Code Ann. § 27-31-210 (a)).
To find out the priority of an HOA lien, check the association’s governing documents.
COA and HOA Foreclosures in South Carolina
If you default on the assessments, the COA or HOA can foreclose. A common misconception is that the association cannot foreclose if you are current with your mortgage payments. However, the association’s right to foreclose has nothing to do with whether you are current on your mortgage payments. (Learn more about HOA liens and foreclosure.)
In South Carolina, a COA lien may foreclose its lien by filing a lawsuit (S.C. Code Ann. § 27-31-210 (a)). (Learn more about general foreclosure laws and procedures in South Carolina.)
An HOA’s foreclosure rights come from the governing documents of the association. To find out the process that the HOA must follow to foreclose a lien for unpaid assessments, read the association’s governing documents.
What to Do if You Are Facing Foreclosure by a COA or HOA in South Carolina
If you are facing a COA or HOA foreclosure, you should consult with an attorney licensed in South Carolina to discuss all legal options available in your particular circumstances. (See our HOA Foreclosure topic page for articles on HOAs, possible options to catch up if you are delinquent in payments, how bankruptcy can help discharge dues, HOA super liens, and more.)