Substantive SC HOA reform bill – end foreclosure

I’ve long argued for an HOA reform bill to address the serious ills of HOA foreclosure that I see as a punitive measure and constituting excessive and cruel punishment and a violation of the 8^th Amendment.[1] SC’s H 4741 pre-filled by Rep. Todd Rutherford. Surprisingly, it’s has a long title that is very much on point.

A BILL TO AMEND SECTION 15-41-30, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PROPERTY EXEMPT FROM ATTACHMENT, LEVY, AND SALE, SO AS TO PROVIDE THAT A DEBTOR’S INTEREST IN REAL PROPERTY USED AS A PRIMARY RESIDENCE MAY NOT BE SOLD IF THE ACTION WAS INSTITUTED BY A HOMEOWNERS ASSOCIATION ATTEMPTING TO COLLECT UNPAID DUES, FEES, OR FINES; TO AMEND SECTION 27-30-130, RELATING TO THE ENFORCEABILITY OF A HOMEOWNERS ASSOCIATION’S GOVERNING DOCUMENTS, SO AS TO PROHIBIT THE ENFORCEABILITY OF A PROVISION GRANTING A HOMEOWNERS ASSOCIATION THE AUTHORITY TO FORECLOSE ON PROPERTY; AND BY ADDING SECTION 29-3-810 SO AS TO PROHIBIT A FORECLOSURE ACTION NOT AUTHORIZED BY STATUTE.

For the HOA to collect any back dues there must be sufficient equity in the property over any mortgage. The HOA can only get $$$$ from long-time paying owners with little or no mortgage. Its overuse is purely a draconian punishment and feeding $$$$ for the HOA attorney! Municipal/state foreclosure doesn’t involve substantial attorney fees that often exceed the debt owed the HOA, several times over. Shame on state legislatures that protect HOAs with special laws for special entities.

Isn’t an HOA foreclosure also tantamount to an excessive fine?[2] It’s a penalty for a violation of the CC&Rs. In Timbs v. Indiana[3] the US Supreme Court held, “The Eighth Amendment’s Excessive Fines Clause is an incorporated protection applicable to the States under the Fourteenth Amendment’s Due Process Clause.” This opinion did not address the 8^th Amendment’s cruel and unusual punishment clause as also being applicable to the states under the 14^th Amendment. However, the intent of the 14^th Amendment was quite clear to the Supreme Court.

“The Fourteenth Amendment’s Due Process Clause incorporates and renders applicable to the States Bill of Rights protections “fun­damental to our scheme of ordered liberty,”

This bill will no longer allow the owner’s home to be treated as collateral for the survival of the HOA! The SCOTUS opinion should render HOA foreclosures null and void. It’s up to the SC residents to make this bill become law!  You must be proactive in supporting Rutherford.

References

[1] See “Draconian punishment and intimidation, No. 8,”HOA Common Sense: rejecting private government, George K. Staropoli( 2013).

[2] Technically speaking, the word “fine” means punishment order by the courts for a crime. A penalty is a punishment for breaking a law, or rule, or contract. In HOA-Land the terms or used quite loosely.

[3] Timbs v. Indiana, no. 17-1091 (U.S. 2019).