H. 3425 would have required quarterly HOA financial updates and a homeowner vote before unbudgeted spending. It died at first referral
H. 3425 would have required quarterly HOA financial updates and a homeowner vote before unbudgeted spending. It died at first referral
2026-09-19 · South Carolina · Legislation · Did not pass
H. 3425 would have been the first South Carolina statute to tell an association what its financial reporting must look like. Prefiled December 5, 2024 by Rep. McDaniel, introduced January 14, 2025 and referred to House Labor, Commerce and Industry, it recorded no further action.1
What it proposed
- Budget distribution — the board to distribute the annual budget no later than ten days after the fiscal year begins.
- Quarterly updates showing expenditures, and showing how fine revenue was allocated.
- Filing with the Department of Consumer Affairs, with the documents retained five years.
- Utilities — from July 1, 2025, an association could not control homeowners' utilities and would have had to transfer control of service to the homeowner.
- Unbudgeted spending — at least 48 hours' notice to homeowners and approval with a quorum of homeowners present, before spending funds not in the budget.
- A private right of action for homeowners, for actual damages plus attorney's fees.
- Associations incorporated under the South Carolina Nonprofit Corporation Act were excluded.
The exclusion that would have limited it
That last line matters more than its placement suggests. Most South Carolina associations of any size are incorporated nonprofits, and the bill's obligations would not have reached them. It followed the pattern already in Section 27-30-140, whose 48-hour budget-increase notice carries the same carve-out.2
The July 1, 2025 date now circulating as law
H. 3425's utilities provision carried an operative date of July 1, 2025. That date is now reproduced in secondary sources as though it described enacted South Carolina law — statements that "effective July 1, 2025, a homeowners association may not control the utilities of the homeowners."
No such rule exists. A date inside a bill operates only if the bill is ratified, and H. 3425 was never reported out of its first committee. Where an association currently holds or controls utility service for units — common in condominium regimes with master-metered water or in communities with private systems — that arrangement is governed by the declaration and the service agreement, not by a 2025 statute.
What South Carolina requires of association finances today
Considerably less than most people assume:
- No statutory budget format, deadline or distribution requirement. The obligation to produce a budget, and its timing, come from the governing documents.
- No filing with any state agency. There is no repository of association budgets, and no agency reviews one.
- No statutory audit or review threshold, at any level of revenue.
- No reserve study and no reserve-funding requirement. Bills proposing both, in this term, died.
- No cap on assessment increases and no statutory vote requirement for a special assessment — again, the declaration governs.
- Document access runs through Section 27-30-150, which imports the Nonprofit Corporation Act's access provisions, rather than through a bespoke financial-disclosure rule.
The one statutory financial protection is the 48-hour notice before a budget increase in Section 27-30-140 — which, again, does not apply to incorporated associations.
Why the reporting gap shows up in the complaint data
The Department of Consumer Affairs' 2026 report records 1,104 separate concerns raised in 452 included complaints, with "request to access information/view documents ignored" third at 9.5%. The Post and Courier's review of the underlying dataset found complaints clustering specifically on special assessment fees, allocation of association funds, and failure to produce financial statements.3
Those are the three things H. 3425 addressed, and they are the three things no South Carolina statute currently requires an association to disclose on a schedule.
The private right of action
The bill's enforcement mechanism deserves separate note, because it is the part hardest to replicate through governing documents. A homeowner suing over a financial-disclosure failure today is suing on the declaration, bearing costs, in the Court of Common Pleas. H. 3425 would have supplied actual damages plus attorney's fees by statute.
A companion proposal in H. 3350 would have routed association disputes to magistrates court instead. Neither passed, so the budget process remains a matter for the recorded documents, enforced at the member's own expense.
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