What's the point of POA legislation?

Published in the Island Packet

Thursday, January 29, 2009

In a time when every dollar counts for everybody -- especially government -- there must be a very compelling reason for the state to step into the private property realm of owners associations and how they are run.

If the goal is to get better financial accountability from assocations and a better, more efficient route to deal with disputes, let's talk about that and whether a bill introduced in the Senate is the way to achieve it. A $10 individual lot fee might not break anyone, but spread across thousands and thousands of lots in communities with homeowners associations, it adds up. And to what end?

A bill introduced by Senator Darrell Jackson of Richland County would require associations to file information on officers, members and copies of bylaws and convenants with the state Department of Consumer Affairs each year.

The bill's requirements seem redundant. In nearly all instances, it requires associations to do what's already laid out in their bylaws. Annual notice, financial statements, minutes of meetings, all are required under most -- if not all -- community bylaws. If not, the people who live there should change their own rules. Or they should demand better of the people they've elected to run their associations.

Senator Tom Davis of Beaufort, who has worked with associations as a private attorney, spells out his problems with the bill succinctly, and they are points well taken.

• It requires all community associations to register with the Department of Consumer Affairs.They are nonprofit corporations, and they are already registered with the Secretary of State. Why should another state agency be burdened with a duplicate registration?

• It requires every association to register the name and address of every individual owner with the Department of Consumer Affairs. "I see that as an invasion of individual privacy."

• It requires every association to pay an annual registration fee of $10 for each lot owner. Why?What is the purpose of this fee?

• "All of these proposals would increase the bureaucracy of the state government for purposes that I do not understand," Davis writes.

Where the bill breaks new ground is in spelling out how associations handle disputes with their members. Homeowners associations now have the ability to file a lien against a property owner who the association says owes money. That leaves the owner recourse in Circuit Court, not a quick or cheap solution.

The bill lays out a procedure for appealing violation notices (that doesn't include assessments) before an association panel. It also limits how much can be collected for violations other than past due assessments unless the bylaws specifically address it. A homeowner could ask for nonbinding mediation from the Consumer Affairs Department for violations costing $250 or more. The fee for that would be $50. That mediation decision could be appealed to the Administrative Law Court.

In the meantime, the S.C. Chapter of the Community Associations Institute is drafting two bills it views as a compromise to Jackson's bill. One would require property owner association managers to undergo training and pass a test to become accredited, a relatively benign requirement.

The other would spell out what associations must do each year, including preparing budgets, publishing meeting notices, minutes and financial statements. Again, requirements already spelled out in most community bylaws. It also would establish an appeals process for determining whether a homeowner has violated covenants.

An appeals process that is quicker and less expensive than Circuit Court is a worthwhile goal. The rest seems rather pointless without that missing compelling reason.