Michael Cassar has been locked in a costly, two-year legal dispute with his homeowners association over three steps he wanted to build off his backyard deck in an upscale Greenville neighborhood. And now he gives newcomers here a heads-up.
“If you’re buying a home in Greenville and it’s under 20 years old, there’s probably 90% chance it’s going to have an HOA,” the local real estate agent says.
With Greenville ranking among the nation’s 10-fastest growing cities, HOAs are coming under increased scrutiny, according to people who live in them, people who manage them and lawyers involved in them.
HOAs adopt and enforce community standards, codified in covenants, conditions and restrictions, or CC&Rs, and bylaws. Membership is required. So is due diligence, stakeholders say.
Bruce Braun, president of the five-member HOA board at Montebello, a gated Paris Mountain community where Realtor.com lists homes for sale in the $800,000s, calls HOAs a “constitution.”
“It’s an extension of my house, the way I take care of my own home. I want to make sure that our community, all of our common area, are maintained on a similar level,” he says.
But disputes happen, and those sometimes boil over. Consider Cassar’s case.
In February 2020, he submitted a request to the HOA to add steps that would extend 3 feet into the 60-by-120-foot lot of the custom home he built for around $800,000 in 2016 in a Hollingsworth Park neighborhood in Verdae.
Neighbors claimed that, even though Cassar says the HOA’s architectural-review panel had approved his plan, the stairs violated the Braydon Homeowners Associations’ CC&Rs.
Next came lawsuits, mediation involving a half-dozen lawyers, heated exchanges with members— and legal bills he says amounted to some $75,000 for both sides.
He blames the situation on over-zealousness. “I think it’s when people take a little bit of power, they become tyrannical,” he says.
Eric Kohorn, vice president of association management at NHE, calls those people “condo commandos,” but when it comes to purchasing a home in an HOA, he says, “It’s buyer beware.”
From his Greenville-based firm that manages more than 80 community associations in 15 Southeastern states, he encourages buyers to vet HOAs with the same care they give to closing documents their real estate attorneys are required to provide.
Bailey Parker, director of public information at the state Department of Consumer Affairs, also advises prospective HOA members to know thy neighbor.
“This may seem creepy, but go door to door and talk to people,” she says. “Just knock and say, ‘Hey, I’m thinking of buying the house across the street or in this neighborhood. How do you like the HOA?’”
Hers is the only state agency involved in HOAs, but its job isn’t regulatory; it can only monitor and field complaints and attempt mediation.
Therein lies the problem, Kohorn and others say.
“My observation about South Carolina is that it seems to be very libertarian and just everybody gets to do whatever they want to do as long as it doesn’t hurt somebody else, and the state prefers to just let them litigate,” says Kohorn, who has been in the property management business for 16 years.
Kohorn worked in Alabama and Florida for 13 years before moving to Greenville in 2019. He cites the latter state as the premier source for regulatory standards.
“When it comes to HOAs, it’s kind of the wild, wild west here,” he says.
He points to the Florida Community Association Act, which runs 52 pages. Among its many requirements are that HOA board members must obtain state certification within 90 days of their election and condominiums must produce an annual FAQ document for prospective owners.
In 2018, the same year Florida’s rules took effect, South Carolina adopted the Department of Consumer Affairs Services for Homeowners and Homeowners Associations Act. Only the title is longer than Florida’s Chapter 720; the Palmetto state’s law runs five pages.
That lack of regulation “creates kind of a vacuum where things can happen that don’t normally happen in an HOA” in the Sunshine State, says Kohorn.
Take, for instance, the case of Nicholas Galipeau, a property manager who embezzled from 10 Greenville-area HOAs over three to four years. In 2019, Galipeau, then 36, owned Commercial Management Co.
He ultimately turned himself into Greenville County sheriff’s deputies after admitting he had stolen money to salvage his other company, a lawn-maintenance business, according to an arrest report obtained through the Freedom of Information Act.
He provided authorities with a handwritten list of the subdivisions and his loot: $720,659.76, the report shows.
“It was never my intention to have this go so badly, but I take full responsibility for my terrible judgment. It has literally cost me everything,” Galipeau is quoted as saying in the report.
What might prevent something like that from happening?
“Regulation. It’s as simple as that,” says Simon Kaye, owner of Community Management Partners. “It needs to be state-level regulation.”
Echoing Kohorn, he adds: “I would pull the whole Florida HOA code, put it in South Carolina. There’s a lot more transparency between the board, the homeowners and the management company.”
William Swent, attorney for the Braydon HOA in the Cassar case, says has no sympathy for those who move into HOAs without doing their homework, but he also doesn’t buy the argument that there is a need for state regulation.
“I’m a big believer in the private marketplace, especially when it comes to real estate rights and encumbrances,” says Swent, a partner in Greenville’s Fox Rothschild firm.
A homeowners association, he says, is “nothing short of democracy.”
“It’s the collective conscience of the community, flexing its muscle,” Swent says. “I don’t know why we need to regulate that because some one person was offended at collective will.”
Kaye and Kohorn say they have approached state lawmakers about creating more oversight; the Greenville Journal reached out to six legislators in Greenville, Horry and Richland counties, and only two returned calls; those representatives spoke off the record about their distaste for more regulation — and for HOAs in general.
“It is a complete cluster,” Kohorn says. “If you just wrote a comprehensive HOA statute and condo statute and regulated the management companies and the boards, I think a lot of people’s perspective on HOAs and the way things go in the state would change overnight.”
What is an HOA?
Residents in homeowners associations adopt and abide by covenants, conditions and restrictions, or CC&Rs, designed to maintain property values and community standards — for instance, no multihued mailboxes or cars on blocks in the yard.
Operating as nonprofits, the associations also levy dues to finance common-area maintenance and upkeep of community amenities such as pools, clubhouses, tennis courts and the like. Monthly dues nationwide average $250 per household, according to iPropertyManagement, a clearinghouse for property management resources and research.
HOA boards also have the power to enforce all manner of rules, from architecture to landscaping, from fences to garbage cans and more. HOAs can disallow or limit pets and can even determine specific breeds. Some covenants can even tell you whether you can leave your car parked in a driveway and whether a guest’s car can stay on your property overnight.
As an example, the Cliffs Valley and Cliffs Valley North CC&Rs document runs 80 pages.
You can access properties’ covenants and restrictions through Greenville County’s Register of Deeds. HOAs, as nonprofits, are also registered with the state, and you can find them through the South Carolina Secretary of State’s office.
The state gives the South Carolina Department of Consumer Affairs no regulatory authority but requires the agency to collect data on HOAs. In 2021, the DCA reported only eight complaints from Greenville.
This year, statewide, the DCA reported:
Source: South Carolina Department of Consumer Affairs Homeowners Association Complaint Reports
In 2020, South Carolina was home to around 7,000 community associations, with more than 1.3 million people, or about 25% of the people in South Carolina, living in one. Roughly 80% of new homes sold in 2020 are located in HOA communities, up 7.5% year-over-year.
From 1970 to 2020, community associations across the country grew from 10,000 to 355,000, with planned communities accounting for 61%, condos 36% and cooperatives 3%.
In South Carolina’s HOAs, 45,500 association board and committee members volunteer $47.1 million worth of their time to manage homes valued at $114.2 billion.
Costs for association operations, physical-asset management, major repairs and replacements, capital improvements, conservation, and sustainability run $2.5 million in the state.
Sources: Community Associations Institute (South Carolina chapter), the Foundation for Community Association Research and iPropertyManagement.
HOA resources The South Carolina Department of Consumer Affairs provides ample literature and YouTube videos for consumers.
How Does an HOA Know What It Can or Cannot Do?
South Carolina Department of Consumer Affairs Contact Information
(800) 922-1594 Toll free in SC (803) 734-4200
293 Greystone Blvd. Suite 400 Columbia, SC 29210
Mailing Address: PO Box 5757 Columbia, SC 29250
The Community Associations Institute’s 2022 Homeowner Satisfaction Survey found:
Source: Foundation for Community Association Research video