H. 5204 would have registered every South Carolina HOA and let the state fine board members. It never got a hearing
H. 5204 would have registered every South Carolina HOA and let the state fine board members. It never got a hearing
2026-09-19 · South Carolina · Legislation · Did not pass
H. 5204 proposed the most far-reaching change to South Carolina association law ever filed, and it died where it was referred. Introduced by Rep. Kilmartin on February 18, 2026 and sent to House Labor, Commerce and Industry the same day, it recorded no further action before the 126th General Assembly expired.1
The architecture of the bill
H. 5204 would have amended the definitions in Section 27-30-120 and added an entire new Article 5 to Chapter 30 of Title 27, titled to provide "additional regulations and oversight of homeowners associations to protect and benefit homeowners."
Four structural obligations sat at its centre:
- Mandatory incorporation and registration of every association in South Carolina.
- Mandatory directors-and-officers insurance.
- An annual fee of three dollars per unit, collected at renewal, to fund enforcement and compliance.
- Enforcement authority for the Department of Consumer Affairs, including the power to fine individual board members and property managers who knowingly violated the law or the governing documents, and a cease-and-desist process giving a board five days to respond, with removal and future disqualification available on failure.
That last item is the one that would have changed the character of the system. South Carolina currently has no agency with power to compel an association to do anything.
The operational provisions
Elections. Voting would have been run by an independent election company, rotated every three years and barred from reuse for six. One vote per member. Mail-in and electronic voting required. Candidate information mailed at association expense. Board service capped at three consecutive years, followed by six years of ineligibility.
Records. Permanent electronic records posted to a website at no charge to members: financial statements kept seven years, minutes, contracts, member lists with contact information, and violation records. Paper copies chargeable at actual cost only; downloads free.
Reserves. A reserve study at least every three years. New associations fully funded from formation. Associations existing on January 1, 2027 given until January 1, 2037 to reach full funding.
Foreclosure. Restricted to debts of at least $10,000, or $1,000 per unit, whichever is less, with 90 days' notice and mediation first. Sale through a realtor at market value rather than a foreclosure sale, with surplus equity returned to the owner.
Fines. Thirty days' notice and a dispute window, a cap at 10% of the original amount owed, and referral to small claims court or the Department before lawyers become involved.
Why the filing date matters more than the content
February 18, 2026 left under three months of a two-year term. A bill of this scope arriving that late has to clear a committee, a floor, a second committee and a second floor in the time remaining, and Labor, Commerce and Industry never scheduled it. The Community Associations Institute's South Carolina chapter, which opposed the bill, described it as sweeping and introduced without stakeholder engagement.2
It is worth separating that from the merits. Nothing in the record shows the committee weighed the bill and rejected it; the record shows a referral and silence.
The misinformation problem this bill created
Because H. 5204's text is public and detailed, parts of it now circulate as though they described South Carolina law. They do not. There is no association registration requirement in South Carolina, no $3-per-unit fee, no mandatory D&O insurance, no Department of Consumer Affairs power to fine a board member, no statutory reserve-funding deadline of 2037, and no $10,000 floor on association foreclosure.
The Department's own position is the opposite of the one the bill would have created. It collects complaints and offers voluntary mediation; it states in its annual report that it cannot compel participation, require an outcome or arbitrate a dispute.
What the complaint data said the same month
H. 5204 was filed two weeks after the Department published its 2026 HOA complaint report, covering calendar 2025: 586 complaints received, 452 included in the report, filed against 339 associations and management companies, raising 1,104 separate concerns — a 30% increase in concerns over 2024. Failure to adhere to or enforce covenants and bylaws was the largest single category at 16.8%.3
The Department's own four recommendations to the General Assembly were considerably narrower than H. 5204: an internal dispute-resolution requirement, extension of the Nonprofit Corporation Act's voting provisions to associations whose bylaws are silent, expanded magistrate's court authority, and a requirement that an association answering a complaint attach the governing-document provision it relies on.
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