Living in a condo in North Myrtle Beach myself, and having a friend on the HOA Board makes me aware of problems they have that most people don't think about. The arguments and backstabbing that goes on constantly, and occasional anarchy when one board is completely voted off and another voted on is enough to keep me far away from them. I don't even like to attend the meetings because of all the bickering.
The foreclosure problems have really affected many of the HOA boards as well. When an owner stops paying his mortgage, chances are he stopped paying his HOA dues before that...which leaves the Board in a quandary to either foreclose before the bank does and purchase the condo from the mortgage company, or just lose the dues for months as it goes through the legal channels for the bank to gain possession. Sometimes the bank will pay the past due fees, and more often it's lost income that the other homeowners end up paying for. Just given the huge number of Myrtle Beach condos that exist, coupled with the huge number of Myrtle Beach foreclosures that have occurred or are imminent, the lost money involved is probably astronomical.
I happened across an association attorney blogger that sends out newsletters citing new laws and rulings affecting HOA's in South Carolina, and have used it several times to make a point to our HOA board. A recent article in it caught my eye and I thought to share it.
Florida has recently passed a ruling that HOA boards can now attach the full rental income on a vacation or investment condo and intercept the funds. The SC court system uses cases in Florida often to ennact our own laws. So they say that our state will probably follow suit and pass the same ruling. This may be good news for the beleagured HOA boards, although I would wonder how they would go about grabbing the funds. Can they go to the renters and serve notice that the rent checks have to be sent to them instead of the owner? I can foresee some bookkeeping nightmares and even more work for real estate and mortgage attorneys in Myrtle Beach. It's interesting to consider the situation though.
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