South Carolina Condo Due Diligence Checklist

Where South Carolina due diligence deserves the most attention

Legal Framework

Condominiums: Governed by the *South Carolina Horizontal Property Act* (SC Code Title 27 Ch. 31). First enacted in the 1960s (codified as §27-31-10 et seq.) and substantially revised in 2006 and thereafter. It covers “horizontal property regimes” (condos) and applies to any condo governed by a recorded declaration (there is no “grandfather cutoff” – all condo declarations are subject to this Act).; HOAs/Planned Communities: Governed by the *South Carolina Homeowners Association Act* (Title 27, Ch. 30). Enacted by 2018 Act No.

Reserve Studies and Reserve Funding

Reserve Study Requirement: None by statute. South Carolina law does *not* require any condo or HOA to conduct a reserve study or maintain any particular reserve balance. The Horizontal Property Act provides the framework for associations but *“does not mandate ongoing reserve studies or specific funding levels”*. This means associations decide on reserves via their own budgets and bylaws, subject only to general fiduciary duties.; Reserve Funding Requirement: Not mandatory. No law forces an association to fully fund recommended reserves.

Structural Inspections and Building Safety

South Carolina has no statewide mandatory structural inspection regime for condominiums. Key points:

Insurance Requirements and Insurance-Market Risk

Insurance Requirements: By law, the condo association must obtain a master insurance policy. The Horizontal Property Act (§27-31-240) states: *“The council of co-owners shall insure the property against risks”*, without preventing owners from insuring their own units. In practice this means the HOA carries hazard insurance (building/fire/etc.) on common property and often a master fire/building policy covering all units.

Resale Disclosures and Buyer Cancellation Rights

South Carolina law has no broad mandatory condo/HOA resale disclosure packet (unlike Florida, etc.). Key points:

Assessment Authority, Special Assessments, and Borrowing

Regular Assessments: The association’s board typically sets an annual budget and corresponding regular assessments (dues). The SC HOA Act requires at least 48 hours’ notice before any meeting where the budget increase is decided, but does *not* require a vote or cap the increase (unless governed by the Nonprofit Corp Act). In a condo (HPA), the declaration/bylaws set voting rules; state law simply allows collection of common-expense assessments (with unpaid sums becoming a lien).; Special Assessments: No state-imposed limits or special procedures.