That Pesky $10

Thursday’s editorial suggests lawmakers revamp the mechanism to pay for low-level dispute mediation within homeowners’ associations.

Not all the ire against the S.C. Homeowners' Association Act is warranted, but lawmakers who support it could do us all a favor by removing the component that seems to draw the most heat: a $10 fee added to every unit or lot across the state.

The intent of the law, which has been hanging around the legislature in various versions since early last year, is simple and good: create a set of guidelines to ensure fairness and accountability in local homeowners' associations. As one of the original bill's sponsors, Sen. Ray Cleary of Murrells Inlet, explains: Most people live under good associations, but if you don't, it's a nightmare.

Accordingly, the bill creates a number of requirements that most reasonable people would support, and most good homeowners' associations already abide by: board meetings must be open to all homeowners, records of the association must be available to them, residents must receive adequate notice in advance of any meeting that may include a rule change, and so forth.

Another well-intentioned measure in the bill would set up a panel to meditate disputes between residents and the association, giving people in disputes with their associations recourse other than a lawsuit to solve their problems. A panel discussion Wednesday between three attorneys and two property managers hosted by the Myrtle Beach Area Chamber of Commerce featured harsh criticism of the proposed bill, but even there the necessity for a neutral, arbitrating body was generally acknowledged.

It is the bill's method for that, however, that chafes opponents so badly. The bill, S. 30, places associations under the state Department of Consumer Affairs, which would serve as the mediating body and collect a $10 fee from every association in the state for each lot or unit it governs, presumably (though not necessarily) to pay for the mediations.

At Wednesday's panel, the bill was decried as a "tax grab." It's unclear how much money the measure would actually generate, but one partial study found more than 5,000 associations in the state with an average of about 100 units each, suggesting the $10 fee would bring in millions. Cleary (who's no longer a sponsor of the bill's current version, but says he is still keeping close attention to it) has said he doesn't like the fee, either.

Nor do we. We certainly agree that a new mechanism (and way to pay for it) is needed to resolve disputes over relatively minor issues - ones which no doubt affect the individual resident's quality of life, but for which the cost of a lawsuit currently prohibits any action. Yet spreading the cost for it among the many responsible homeowners' associations is sure to raise opposition, and centralizing the mediation with a panel in Columbia is also questionable. As senators continue to refine the bill, we hope they'll give this area of concern special consideration.

At Wednesday's forum, Sen. Nelson Hardwick, R-Surfside Beach, said from the audience that the bill is likely to continue languishing in the legislature this year. In the short term, then, we hope lawmakers will use the time to come up with a better mechanism to serve the unfortunate people who suffer from bad property management - without unfairly burdening the majority of better-run associations.

The intent of the law, which has been hanging around the legislature in various versions since early last year, is simple and good: create a set of guidelines to ensure fairness and accountability in local homeowners' associations. As one of the original bill's sponsors, Sen. Ray Cleary of Murrells Inlet, explains: Most people live under good associations, but if you don't, it's a nightmare.

Accordingly, the bill creates a number of requirements that most reasonable people would support, and most good homeowners' associations already abide by: board meetings must be open to all homeowners, records of the association must be available to them, residents must receive adequate notice in advance of any meeting that may include a rule change, and so forth.

Another well-intentioned measure in the bill would set up a panel to meditate disputes between residents and the association, giving people in disputes with their associations recourse other than a lawsuit to solve their problems. A panel discussion Wednesday between three attorneys and two property managers hosted by the Myrtle Beach Area Chamber of Commerce featured harsh criticism of the proposed bill, but even there the necessity for a neutral, arbitrating body was generally acknowledged.

It is the bill's method for that, however, that chafes opponents so badly. The bill, S. 30, places associations under the state Department of Consumer Affairs, which would serve as the mediating body and collect a $10 fee from every association in the state for each lot or unit it governs, presumably (though not necessarily) to pay for the mediations.

At Wednesday's panel, the bill was decried as a "tax grab." It's unclear how much money the measure would actually generate, but one partial study found more than 5,000 associations in the state with an average of about 100 units each, suggesting the $10 fee would bring in millions. Cleary (who's no longer a sponsor of the bill's current version, but says he is still keeping close attention to it) has said he doesn't like the fee, either.

Nor do we. We certainly agree that a new mechanism (and way to pay for it) is needed to resolve disputes over relatively minor issues - ones which no doubt affect the individual resident's quality of life, but for which the cost of a lawsuit currently prohibits any action. Yet spreading the cost for it among the many responsible homeowners' associations is sure to raise opposition, and centralizing the mediation with a panel in Columbia is also questionable. As senators continue to refine the bill, we hope they'll give this area of concern special consideration.

At Wednesday's forum, Sen. Nelson Hardwick, R-Surfside Beach, said from the audience that the bill is likely to continue languishing in the legislature this year. In the short term, then, we hope lawmakers will use the time to come up with a better mechanism to serve the unfortunate people who suffer from bad property management - without unfairly burdening the majority of better-run associations.