Question:
What is the penalty, that can be assessed, to an HOA for failure to allow a member access to financials?
– David
Answer:
Hi David,
If the HOA is incorporated as a non-profit, it is subject to the South Carolina Nonprofit Corporation Act of 1994 Section 33-31-1604(b), which states that the member compliant with Section 33-31-1602(b) and (c) may apply to the circuit court for an order to permit the member to inspect and copy records, including accounting records. The circuit court can be the one located in the county where the HOA’s principal office is in the state. If there’s none in the state, it can be the circuit court where the HOA’s registered office is located.
Subsection c also states that the court shall order the HOA to pay the member’s costs incurred to obtain the order unless the HOA proves they refused because they have a basis to reasonably doubt the member’s inspection rights.
If the HOA is not a non-profit, it may only be subject to the South Carolina Homeowners Association Act Section 27-30-150. This section provides that the South Carolina Nonprofit Corporation Act of 1994 Sections 33-31-1602, 33-31-1603, 33-31-1604, and 33-31-1605 still apply. However, they only apply for the purposes of inspecting and copying the HOA’s annual budget and membership lists.
For further guidance, kindly consult a lawyer.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
