New law on homeowners associations is in effect

New law on homeowners associations is in effect

A new law regulating homeowners associations became effective last May when Governor Henry McMaster signed it.

A key provision of that law takes effect January 10.  It requires HOA’s to record with the county Register of Deeds office all bylaws, declarations, or master deeds, or any amendments to them.

Here is a quick run down of what else the law does:

  • Rules and regulations are enforceable as soon as they are passed but must be available to the association members through dissemination or posting in a manner defined in the bill (conspicuous place or online). In order to keep enforcing any new rules, they must be recorded with the county Register of Deeds on or before January 10 of the following year.
  • If the HOA is not incorporated under S.C. Nonprofit Corporation Act, the HOA must provide 2-days notice of a proposed action to increase the budget.
  • The Magistrates Court now has jurisdiction over HOA monetary disputes.
  • Requires the Department of Consumer Affairs to collect certain information from citizens who call about HOAs and to furnish the General Assembly a report of that information annually. Consumer Affairs has no other authority over HOAs.
  • Requires the owner who is selling property to disclose if it is a part of an HOA.

If members have any questions about this legislation and how it might affect an HOA that you manage, your question can be submitted to the Gallivan White & Boyd Legal Hotline.

Have a legal question? The Legal Hotline Has Your Answer

Have a legal question? The Legal Hotline Has Your Answer

With educational and networking opportunities, several savings programs, and targeted marketing possibilities, it seems that being a member of the Home Builders Association of Greenville has endless benefits. But have you heard about our Legal Hotline? Submit a question to the legal hotline and receive a quick, confidential answer from a qualified attorney at Gallivan, White & Boyd, P.A..

You can access the legal hotline here, or contact your Home Builders Association of Greenville if you have any questions regarding the process at (864) 254-0133.

HBA Legal Counsel Ron Tate addresses the membership regarding the Legal Hotline at a recent general membership meeting.

Legal Alert: Patent Enforcement UPDATE

Legal Alert:

A group in has received a patent from the U.S. Patent and Trademark Office covering a commonly-used process for removing moisture from lumber in unfinished construction.  A copy of a patent assertion from this company is linked below.

If you receive a patent assertion from this company, please contact your HBA Office at 865-254-0133 or email  We are working with the HBA of Oregon and NAHB to facilitate a challenge to this patent.

Click here to view a copy of the patent assertion received by an HBA member in Oregon.


Did you know that NAHB monitors patent applications for residential building designs and subdivision layouts that are pending with the U.S. Patent and Trademark Office to reduce the likelihood that members will have to pay costly patent infringement fines.

Since 1998, the NAHB Design Committee and NAHB staff have monitored the US Patent and Trademark Office’s issue of the granting of patents to residential building designs and subdivision layouts to better ensure that such patents are properly issued.

Anyone can apply for a patent with an idea, concept or invention that is unique, novel and non-obvious. In addition, anyone can be affected by a patent that was granted for an idea, concept or invention that is not. A patent holder can enforce receipt of royalties and/or can sue for patent infringement if a patented design or plan is already built; therefore, improperly issued patents can involve substantial costs for building industry professionals.

Click here to read the summary reports of patent applications.

You are an “Additional Insured” – What Coverage Are You Getting?

By: Stephen Mysliwiec, Esq., National Association of Home Builders

Builders routinely require their subcontractors to name the builder as an additional insured on the subcontractor’s comprehensive general liability (“CGL”) insurance policy. Prudent builders go further. They specify the scope of coverage the builder must receive as an additional insured, and they check the certificate of insurance supplied by the subcontractor to make sure that they get the required coverage. The builder who does not do so may be surprised by what little coverage the builder has actually gotten as an additional insured. This is because the forms of coverage for additional insureds vary widely, and some of the forms in fact provide very little coverage to the additional insured.

To receive the broadest coverage, builders should specify in the subcontract that the builder must be named as an additional insured on the subcontractor’s CGL policy “for liability arising out of the subcontractor’s work.” Such coverage is provided by Insurance Services Office form CG 20 10 11 85, among others. The key words are “arising out of.” The courts have construed this phrase very broadly. For example, in a recent case two employees of an excavation subcontractor were injured by a cave-in at a construction site. The employees sued not their employer (the subcontractor) but rather the contractor, alleging that the contractor failed to provide a safe workplace. The court held that the contractor was covered for the suit as an additional insured on the subcontractor’s CGL policy, even though the subcontractor itself was not sued. The court held that the contractor’s alleged liability “arose out of” the subcontractor’s work.

But a builder might be an additional insured on a subcontractor’s CGL policy and not get the coverage the builder expects. For example, some insurance policies cover additional insureds “with respect to liability arising out of [the subcontractor’s] ongoing operations performed for the [the additional insured]” (emphasis added). A builder who expects to be covered as an additional insured for a construction defect suit alleging property damage occurring after construction was substantially completed could be disappointed by such coverage. Some courts have held that such a suit does not arise out of the subcontractor’s “ongoing operations.”

Another very common additional insured endorsement covers the builder only for liability “caused, in whole or in part,” by the subcontractor’s acts or omissions. Many courts have construed the phrase “caused, in whole or in part” much more narrowly than the phrase “arising out of.” In the view of such courts, the builder as an additional insured would not be covered if the lawsuit against the builder alleged that the injury or damage were caused only by the builder. For example, such courts would likely rule that the builder in the excavation cave-in example discussed above was not covered as an additional insured on the subcontractor’s policy because the suit did not allege that the builder’s liability was caused, even in part, by the subcontractor.

In addition to specifying in the subcontract the mandatory scope of coverage for the builder as an additional insured, the builder should confirm that it has actually received the required coverage. The subcontract should provide that the subcontractor must furnish a certificate of insurance and that the certificate must be sufficiently detailed to show that all the insurance requirements of the subcontract have been met. The certificate should show that the builder has been added as an additional insured on the subcontractor’s CGL policy and should describe the terms of coverage provided to the additional insured and/or attach the actual additional insured endorsement.

In addition, the builder needs to take the time to read the certificate and to follow up with the subcontractor if the additional insured coverage does not meet the requirements in the contract, or if the certificate is not sufficiently detailed to make that determination. A builder who does not assure that its subcontractors have provided the required scope of additional insured coverage could be in for a rude awakening after a suit is filed and the builder seeks coverage as an additional insured on its subcontractor’s insurance policy.

This article summarizes a presentation made by Stephen Mysliwiec, Esq., to NAHB’s Building Product Issues Committee at the 2013 NAHB Spring Board of Directors Meeting held in Washington, D.C.

Have a legal question?  Contact your Home Builders Association’s Gallivan, White & Boyd Legal Hotline.

NAHB Takes Fight for Property Owners to U.S. Supreme Court

Home builders are in the crosshairs as cash-strapped local governments that have seen their budgets decimated during the economic downturn look for ways to shift infrastructure costs to the private sector.

For years, local governments have pursued arrangements with developers to extract certain concessions in exchange for the opportunity to develop. For example, a locality may ask a developer to improve the street in anticipation of the increased traffic that a development may bring.

In many cases, it’s a fair request. However, some local governments seem all too willing to stretch the boundaries to the limit – and now the courts are backing them.

A recent ruling by the Florida Supreme Court would effectively allow local governments to force builders to provide community services or pay for improvements on public lands miles away from their property before they can receive a permit to develop their own private property. Following an appeal, the case now moves to the highest court in the land.

Taking the Lead

Leading the fight on behalf of property owners and acting to ensure that the interests of NAHB members are appropriately represented, NAHB on Nov. 28 filed an amicus (friend of the court) brief with the U.S. Supreme Court in Koontz v. St. Johns River Water Management District, a landmark case with major implications for land developers nationwide.

NAHB has been joined by more than a dozen other prominent real estate and business organizations, including the U.S. Chamber of Commerce, the National Mining Association, the American Farm Bureau Federation and the Real Estate Roundtable.

The filing in support of Koontz and the rights of all property owners details how the defendant has overstepped its bounds.

“No matter how well intentioned the government may be, the Constitution was not designed to make government’s life easier at the expense of private citizens,” the brief said. “Plainly, there must be some limit on the ability of government agencies to impose conditions on the issuance of permits. Otherwise, no citizen’s rights as to anything would be secure.”


Coy A. Koontz owned 14.2 acres of vacant land in Central Florida and wanted to improve 3.7 acres of the property. In exchange for the opportunity to develop, Koontz offered to dedicate the remainder of his property – more than 75% of his land – to the state for conservation.

The government rejected the proposal and pressed Koontz for more, demanding that Koontz also enhance 50 acres of government-owned wetlands – more than four miles away from Koontz’s property – by replacing culverts and filling in some ditches. The government never demonstrated how the off-site improvements to government-owned land relate to the alleged impact of Koontz’s dredge-and-fill activities on his own property.

But when Koontz refused the district’s demand, his permit applications were denied outright. The district told Koontz it would not issue permits for his property until he agreed to the district’s off-site work conditions.

Koontz sued on the ground that the government was taking his land without just compensation.

Unfortunately, the Florida Supreme Court ruled that the district’s demand was not a “taking” in this case. The court also ruled that it was legal for the government to refuse to issue the permit until Koontz agreed to make the improvements.

What’s at Stake

If the U.S. Supreme Court allows the Florida Supreme Court’s decision to stand, it could be opening the door to allow any municipality in America to force any home owner who requests a permit to remodel their home to perform expensive, unnecessary and unrelated improvements before receiving permission to upgrade their own house.

In today’s tough economy, localities struggling to make ends meet and balance their budgets can be expected to continue to try to shift infrastructure and service costs to the private sector. If the Florida Supreme Court’s decision is upheld, that shift will be expedited by putting the burden back on developers (both legally and financially) and by forcing developers to accept invalid exactions before having their day in court.

NAHB will keep its members apprised as this case proceeds. The Supreme Court is expected to deliver its decision by June 30.

NAHB Legal Resources

NAHB’s proactive litigation efforts have forced governmental bodies and agencies at the state and federal levels to scale back or entirely eliminate efforts to limit or stop development on countless parcels nationwide.

NAHB provides a myriad of legal resources for both members and state and local association staff. While the NAHB staff counsel cannot replace your local attorney, NAHB can offer legal research, litigation funding, and/or litigation strategy, depending on the situation and the issues involved. See the Legal Services for details.

The NAHB Legal Research Program also provides free legal research assistance and information on building industry-related issues to all members. More information can be found here.