South Carolina HOAs can charge substantial fee to leave neighborhood

FORT MILL, S.C. — Many homeowners are familiar with homeowners association (HOA) fees, but in South Carolina you could have to pay to leave your neighborhood group.

Isabel Ward was surprised to find a more than $1,700 bill from her HOA when she sold her home in Baxter Village in Fort Mill.

Ward said she loved her home in the neighborhood west of Highway 49. She lived there for eight years, but decided to build a home on Lake Wylie.

Her home in Baxter Village sold in just a day, but at closing she was shocked to see a substantial line-item fee.

“HOA Service Fee to Baxter, $1,712.50,” the statement read.

The cost is almost double her annual dues of $950, Ward said.

“Oh I told him right then, ‘this is highway robbery,’” she said. “Why are they charging me to leave Baxter? This is not right. I got mad and my Latin temper showed up.”

Channel 9′s Scott Wickersham got a copy of the Baxter Village HOA agreement. It does say that when you sell a home, you must pay a fee which “shall not exceed the greater of $500 or .25% of the Gross Selling Price.”

In this hot housing market, Ward sold her home for upward of $685,000. Baxter then took its fee, $1,712, or .25% of the sales price, which was the greater amount.

“South Carolina is wide open,” said attorney Zac Moretz, who specializes in HOAs and says the fee is legal in South Carolina.

In 2010, North Carolina lawmakers wrote the Planned Community Act, which banned such exit fees except in a few specific cases.

In South Carolina, you won’t have the same luck.

“Whatever your document says in your neighborhood, that’s what you’re going to have to do,” Moretz said. “You have to follow the covenants and there is actually an attorney general opinion in SC that says there is no law on this. Its a private matter between the HOA and the members.”

If you’re planning to buy a house in South Carolina and will be joining an HOA, find out what rules there are ahead of time to avoid any expensive surprises.

“Go through it, read them and ask questions,” Ward warned.

A spokesperson from the Baxter management company told Channel 9 the fee has been in place since 1998. The spokesperson added that the fee is public record, discussed regularly at HOA and new owner meetings, and routinely provided to purchasers as part of the title work for their closing.

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