A community refused to waive a covenant unless the applicant accepted four conditions. The Fourth Circuit said that asks the wrong question
A community refused to waive a covenant unless the applicant accepted four conditions. The Fourth Circuit said that asks the wrong question
2026-09-19 · South Carolina · Courts
The Fourth Circuit, whose decisions bind South Carolina, has held that when an association is asked to waive a covenant as a Fair Housing Act accommodation, courts measure necessity against the waiver that was requested — not against each condition the board attaches to granting it. The published decision issued July 15, 2025, vacating and remanding.1
The facts
A gated waterfront community's corporation refused to waive its business-purpose restrictive covenant for a proposed assisted living facility unless the developer accepted four conditions, among them daily septic monitoring and a $100,000 arbitration escrow.
The district court granted the corporation summary judgment on the reasonable-accommodation claim, reasoning that removing those conditions was not "necessary" for the enjoyment of the dwelling by residents with disabilities.
The holding
That framing was wrong. Under 42 U.S.C. § 3604(f)(3)(B), the necessity inquiry asks whether the accommodation actually requested — here, an exemption from the business-purpose covenant — is necessary to afford persons with disabilities an equal opportunity to use and enjoy a dwelling.
The court explained the consequence of the district court's approach in plain terms: it would let a community "impose all kinds of burdensome conditions on accommodation approvals even if they have no relationship to the needs of future residents with disabilities."
On this record the necessity element was satisfied as a matter of law. There was no evidence that elderly persons with disabilities could live anywhere else on the island, and the corporation conceded it could not point them to another neighbourhood — acknowledging that doing so would be "classic NIMBYism."
What remains for trial
Necessity was resolved; reasonableness was not. Whether the requested waiver is reasonable remains a jury question, as do the retaliation claim under 42 U.S.C. § 3617 and the disability-discrimination claims.
The court noted evidence pointing both ways on the four conditions: they could be read as environmental and financial prudence, or as pretext. That is precisely the kind of question a jury resolves, and it means a board's stated reasons for its conditions become the evidence.
Why this changes the analysis for a South Carolina board
The common pattern in association practice is not outright refusal. It is conditional approval — yes, subject to indemnities, deposits, monitoring, insurance, escrows or inspections. That approach has real attractions: it avoids a flat denial, and it allocates risk the board is genuinely worried about.
Gibson Island holds the conditions are not what necessity is measured against. Three consequences follow at category level:
- Attaching unrelated burdens is not a safe middle path. A condition with no relationship to the needs of residents with disabilities does not convert a refusal into a grant for necessity purposes.
- The board's rationale becomes evidence. Where conditions are challenged as pretextual, the reasons given at the time are what a jury examines.
- "They could live somewhere else" is a weak answer. The absence of an alternative within the community carried substantial weight, and the concession about NIMBYism is quoted in the opinion.
The two federal developments pulling the other way
This decision runs against the direction of two other federal changes in the same window, which is why the overall position for a South Carolina board is genuinely mixed rather than simply better or worse.
HUD's Office of Fair Housing and Equal Opportunity issued a memorandum on May 22, 2026 limiting reasonable-cause findings in animal-related accommodation complaints to animals trained to provide disability-related assistance, and rescinding its 2020 assistance-animal notice. That narrows HUD's own enforcement, but it is an internal enforcement-priority memorandum — it does not bind a court hearing a private suit.
And in McGinn v. Broadmead, Inc., decided February 18, 2026, the Fourth Circuit confirmed the two-year limitations period for Fair Housing Act claims under 42 U.S.C. § 3613(a)(1)(A) and let stand the holding that the continuing-violation doctrine does not apply to failure-to-accommodate claims outside the hostile-workplace context — so the clock runs from the first refusal.2
Read together: an association's exposure to a HUD charge over an untrained support animal has narrowed, and the window for an owner to sue has been confirmed as short — but where an owner does sue in time over a covenant waiver, the necessity analysis is now framed in the applicant's favour.
South Carolina has no state statute supplying accommodation rights in community associations independently of the Fair Housing Act, so federal law is effectively the whole of it. See South Carolina pet restrictions.
Related South Carolina HOA Topics
Stay on top of South Carolina HOA law
Every week: new South Carolina legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.