South Carolina HOA Budget Approval

Section 1: Overview — How HOA budgets are approved in South Carolina

In South Carolina, budget approval starts and ends with one document: the recorded master deed or declaration and bylaws. The statutes don't provide a budget mechanism — the governing documents do.

The state runs two separate statutory tracks. Condominiums fall under the Horizontal Property Act (S.C. Code Ann. § 27-31-10 et seq.), a traditional framework enacted in 1967 with no connection to any uniform act. Planned communities fall under the South Carolina Homeowners Association Act (S.C. Code Ann. § 27-30-110 et seq.), a narrower statute that took effect May 17, 2018, under Act No. 245 (H.3886).^1,2 In both cases, the board adopts the budget under the authority set out in the recorded governing documents. Neither statute includes a negative-option ratification step — the kind where a budget is deemed approved unless a supermajority of owners votes it down.

The 2018 Act is deliberately limited in scope: it covers the recording of governing documents as a condition of enforceability, limited financial disclosure, magistrate-court jurisdiction over certain small-dollar disputes, and the collection of association complaint data by the Department of Consumer Affairs.^2,3 Neither statute requires a reserve study, a minimum reserve contribution, or a cap on assessment increases. The table below shows what each statute specifies — and what it leaves to the governing documents.

Section 2: The budget approval mechanism

South Carolina's condominium statute, the Horizontal Property Act, is a traditional framework, and the 2018 South Carolina Homeowners Association Act is limited in scope; absent statutory budget mechanics, the recorded governing documents control.

2A. Quick-Reference Budget Mechanics Table

2B. The budget process

Take condominiums first. The Horizontal Property Act sets up the regime and its administration, but it defers budget adoption entirely to the master deed and bylaws. The Act requires bylaws recorded alongside the master deed (§ 27-31-150), and those bylaws must include, among other things, the method for collecting from co-owners for common expenses and a rule that a 51-percent majority is required to adopt decisions (§ 27-31-160).⁹ The Act also directs co-owners to share common expenses pro rata according to their percentage interests (§ 27-31-190), and it requires the administrator or board to keep a detailed, chronological record of receipts and expenditures open to co-owners for inspection (§ 27-31-180).^10,6 What the Act does not do is specify how a budget is proposed, noticed, voted on, or ratified. There is no negative-option mechanism, no budget-summary distribution deadline, and no owner-ratification step in the statute. Those mechanics live entirely in the recorded governing documents.

For planned communities, the 2018 Homeowners Association Act doesn't create a budget-adoption mechanism, either. Its central requirement is that governing documents be recorded in the county where the property is located to be enforceable (§ 27-30-130).¹¹ On budgets specifically, the Act contains just one operative rule: before a homeowners association may increase an annual budget, it must give homeowners at least 48 hours' notice before the meeting at which that decision is made — and that rule applies only to associations not incorporated under the South Carolina Nonprofit Corporation Act (§ 27-30-140).⁵ The Act also extends records-inspection rights to members of non-nonprofit associations, giving them the right to inspect and copy the annual budget and membership list (§ 27-30-150), and it grants magistrates courts concurrent jurisdiction over monetary disputes arising under the Act, up to the jurisdictional ceiling of Section 22-3-10 (§ 27-30-160).^8,12 That ceiling sits at $7,500.¹³ Where the statute is silent on how a budget is adopted, the recorded declaration controls — read the statute for what it says, not for what it doesn't.

The Department of Consumer Affairs plays a narrowly defined role under the 2018 Act. The Department receives and records complaint data, forwards complaints to the association or homeowner, and publishes an annual report. It is expressly barred from promulgating regulations or issuing guidelines on HOA administration or governance, and from serving as an arbiter in disputes (§ 27-30-340).³ The Department does not approve, review, or regulate association budgets.

2C. Variation and the corporate-law overlay

The recorded governing documents are the operative source for budget adoption and assessments in both condominiums and planned communities. Most South Carolina associations organize as nonprofit corporations, so the Nonprofit Corporation Act (§ 33-31-101 et seq.) runs alongside the property statutes and supplies corporate formalities — including provisions for annual financial statements to members (§ 33-31-1620) and member inspection of records (§ 33-31-1602).^7,14 But the corporate statute sets no budget-approval threshold. It doesn't tell the board how much it may assess, when it must circulate a budget, or whether owners may reject one. The ultra vires provision (§ 33-31-304) also narrows the grounds on which an owner can challenge corporate action for lack of power.¹⁵ Where the governing documents are silent, South Carolina common law treats recorded covenants as a contract among the owners and the association, and courts interpret that contract to determine rights and obligations.¹⁶ The practical hierarchy: start with the declaration and bylaws, move to the Nonprofit Corporation Act, then to common law where both are silent.

Section 3: Budget-adjacent obligations

A. Reserves in the budget

Neither the Horizontal Property Act nor the 2018 Homeowners Association Act requires a reserve study or sets a minimum reserve contribution. Reserve planning is governed by the recorded governing documents and the board's fiduciary duty. The Horizontal Property Act addresses insurance and post-casualty repair (§§ 27-31-240 and 27-31-250) but imposes no ongoing reserve-funding requirement.¹⁷

B. Special assessments

The Horizontal Property Act sets no special-assessment approval threshold for ordinary operations. For planned communities, the 2018 Act is silent on special assessments. In both cases, the declaration controls the threshold and procedure.^1,2

C. Assessment increase limits

Neither statute caps the percentage by which assessments may rise without an owner vote. The only statutory touchpoint is the 2018 Act's 48-hour meeting-notice requirement for budget increases by non-nonprofit associations (§ 27-30-140).⁵ Any cap on assessment increases lives in the governing documents.

D. Financial review, audit, and disclosure tied to the budget cycle

No statute ties an audit requirement to the budget cycle. The Horizontal Property Act requires a chronological record of receipts and expenditures available to co-owners (§ 27-31-180); the Nonprofit Corporation Act provides for annual financial statements to members (§ 33-31-1620); and the 2018 Act gives members of non-nonprofit associations the right to inspect and copy the annual budget (§ 27-30-150).^6,7,8

Section 4: Recent legislative and judicial activity

A. Recent bills

No bill enacted in the past 24 months amended the budget, assessment, or financial-disclosure provisions of the Horizontal Property Act or the 2018 Homeowners Association Act. The most recent enacted community-association legislation, from 2024, addressed virtual meetings and unfair real-estate service agreements — not budget adoption.¹⁸ Proposals to add budget-disclosure and assessment requirements remain pending (see Active legislative debates below).

B. Recent appellate rulings

South Carolina's most significant recent assessment ruling draws a clear line: owners must pay first and challenge board conduct separately.

C. Active legislative debates

The 2025-2026 session produced several pending proposals that would add budget-disclosure and meeting-transparency requirements to the 2018 Act. None has been enacted.

Section 5: National positioning and related coverage

South Carolina sits among the declaration-primary states — a traditional 1967 condominium statute paired with a limited 2018 disclosure-oriented planned-community statute. It is distinct from the negative-option states that adopted the Uniform Common Interest Ownership Act or the 1980 Uniform Condominium Act, under which a board-adopted budget is ratified unless a supermajority of owners votes it down. South Carolina adopted neither act, and that mechanism should not be read into the state's law. It is also distinct from California's assessment-increase-cap model and from the reserve-study and reserve-funding mandate states — Florida, Nevada, and Utah among them.¹⁷ For a multi-state operator entering South Carolina, the practical implication is clear: the recorded governing documents control budget adoption and assessment-setting, while the 2018 Act adds disclosure, recording, and magistrate-jurisdiction features rather than a budget process.

Recommendations

• Start every South Carolina budget question with the recorded declaration and bylaws, not the statute. For both condominiums and planned communities, the proposing body, approval threshold, quorum, notice, special-assessment process, and reserve policy are found in the governing documents. Treat the statutes as a floor, not a procedure manual. The benchmark that would change this approach is enactment of a bill imposing a statutory budget-adoption or ratification mechanism; none is currently law.
• For planned-community associations not incorporated as nonprofits, build the 48-hour notice step into the budget-increase calendar. Section 27-30-140 applies only to non-nonprofit associations, so first confirm corporate status with the Secretary of State. If the association is a nonprofit corporation, the notice rule does not apply — the governing documents and the Nonprofit Corporation Act control.
• Do not represent that any reserve study, reserve funding level, or assessment cap is legally required in South Carolina. None is. Where a board wants a reserve study, justify it on fiduciary-duty and lender-eligibility grounds — FHA and Fannie Mae condominium financing — not on a non-existent state mandate.
• Document budget and assessment decisions to withstand later challenge. Chandelle confirms that owners must pay assessments regardless of disputes over board spending, but it also shows that alleged bylaw violations can spawn separate derivative or individual claims against directors. Clean minutes, recorded governing documents, and documented notice reduce that exposure.
• Track the 2025-2026 disclosure bills (H.3425, H.4006, S.366) but do not act on them yet. If any is enacted, the trigger to revise this guidance is signature by the Governor and an effective date; quarterly review aligns with that monitoring.

Caveats

• This page states what the statutes do and do not contain. Because nearly all budget mechanics in South Carolina live in recorded governing documents, the controlling rules for any specific association must come from that association's declaration and bylaws, which this page cannot substitute for.
• Chandelle Property Owners Association v. Armstrong is a published Court of Appeals opinion and is good law as of the last-verified date, but it is an intermediate appellate decision. The South Carolina Supreme Court has not addressed its specific holdings, and facts in other matters may differ.
• Bill statuses reflect the 2025-2026 session as of June 16, 2026. Legislative status can change quickly; verify current status on scstatehouse.gov before relying on any pending bill.
• The magistrates-court jurisdictional ceiling referenced in § 27-30-160 is set by § 22-3-10 and currently sits at $7,500. Pending legislation to raise that ceiling has been introduced in past sessions but is not enacted. Verify the current figure before advising on forum.

1. S.C. Code Ann. § 27-31-10 et seq., Horizontal Property Act (official text, scstatehouse.gov) ↩
2. S.C. Code Ann. § 27-30-110 et seq., South Carolina Homeowners Association Act, enacted 2018 Act No. 245 (H.3886), eff. May 17, 2018 (official text, scstatehouse.gov) ↩
3. S.C. Code Ann. § 27-30-340, Calls or written complaints; Department of Consumer Affairs duties and prohibitions (official text, scstatehouse.gov) ↩
4. S.C. Code Ann. § 33-31-101 et seq., South Carolina Nonprofit Corporation Act (official index, scstatehouse.gov) ↩
5. S.C. Code Ann. § 27-30-140, Annual budget increases; notice requirements (official text, scstatehouse.gov) ↩
6. S.C. Code Ann. § 27-31-180, Records of receipts and expenditures (official text, scstatehouse.gov) ↩
7. S.C. Code Ann. § 33-31-1620, Financial statements for members (S.C. Code of Laws) ↩
8. S.C. Code Ann. § 27-30-150, Application of access to documents provisions (official text, scstatehouse.gov) ↩
9. S.C. Code Ann. §§ 27-31-150 and 27-31-160, Administration of property; bylaws; provisions required in bylaws (official text, scstatehouse.gov) ↩
10. S.C. Code Ann. § 27-31-190, Expenses shall be shared (official text, scstatehouse.gov) ↩
11. S.C. Code Ann. § 27-30-130, Enforceability of governing documents; recording requirements (official text, scstatehouse.gov) ↩
12. S.C. Code Ann. § 27-30-160, Jurisdiction of magistrates court (official text, scstatehouse.gov) ↩
13. S.C. Code Ann. § 22-3-10, Concurrent civil jurisdiction of magistrates ($7,500 ceiling) (official text, scstatehouse.gov) ↩
14. S.C. Code Ann. § 33-31-1602, Inspection of records by members (S.C. Code of Laws) ↩
15. Chandelle Property Owners Ass'n v. Armstrong, Op. No. 6078 (S.C. Ct. App. Aug. 7, 2024), discussing S.C. Code Ann. § 33-31-304 (ultra vires) ↩
16. Chandelle Property Owners Ass'n v. Armstrong, Op. No. 6078 (S.C. Ct. App. Aug. 7, 2024) ("Restrictive covenants are construed like contracts and may give rise to actions for breach of contract.") ↩
17. S.C. Code Ann. §§ 27-31-240 and 27-31-250, Insurance; repair or reconstruction (official text, scstatehouse.gov) ↩
18. 2023-2024 Bill 4049, virtual meetings and electronic voting for HOAs and condominiums (scstatehouse.gov) ↩
19. Chandelle Property Owners Ass'n v. Armstrong, Op. No. 6078, Appellate Case No. 2022-001557 (S.C. Ct. App., heard June 4, 2024, filed Aug. 7, 2024) (full slip opinion) ↩
20. 2025-2026 Bill 3425 ("HOA"), adding § 27-30-135 financial-disclosure requirements and amending § 27-30-140 (scstatehouse.gov) ↩
21. 2025-2026 Bill 366 ("HOA Fees"), Senate Committee on Judiciary (scstatehouse.gov) ↩
22. 2025-2026 Bill 4006 (Homeowners Associations), open-meeting and access provisions (scstatehouse.gov) ↩