Could a South Carolina county or city collect overdue assessments for a private homeowners association?

Plain-English summary

In 2021, the South Carolina Attorney General expressed doubt that a county or city could collect overdue assessments on behalf of a private homeowners association when the money benefited only the association and its members. It recognized broad local power to impose fees for public health and welfare, but did not read that power as extending to collections for a private purpose.

The request mentioned landscaping and private road resurfacing. The office thought those uses would likely fail a public-purpose test, while stressing that it had not examined a specific ordinance and could not determine disputed facts. It said a court would decide whether a particular charge served a public or private purpose.

Currency note

This opinion was issued in 2021. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the AG approve local government collection of unpaid HOA dues?
A: No. It expressed concern that collecting private assessments would benefit only owners or the association rather than serve a public purpose.

Q: Did the opinion invalidate a particular fee ordinance?
A: No. The request did not supply a specific ordinance, and the office said deciding whether a charge served a public purpose required facts beyond an AG opinion.

Q: Why did landscaping and private roads matter?
A: Those were the uses in the request. The office viewed landscaping as primarily benefiting the private owners and cited earlier opinions against using public funds to maintain private roads.

Background and statutory framework

The opinion considered county and municipal home-rule powers together with state constitutional limits requiring taxes and public resources to serve a public purpose. It distinguished local charges for general welfare from collecting an association's own assessments for private landscaping or roads.

Citations and references

The cited legal authorities and the office's conclusions appear in the linked official opinion. Its analysis addressed the question presented in 2021.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/january-21-2021/
• Original PDF: https://www.scag.gov/wp-content/uploads/2021/01/02472996.pdf

Original opinion text

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Alan Wilson
Attorney General

January 21, 2021

The Honorable Stephen Goldfinch
Member

South Carolina Senate
P.O. Box 823

Murrells Inlet, South Carolina 29576

Dear Senator Goldfinch:

We received your letter requesting an opinion of this Office as to whether a local government can collect a fee on behalf of a private home owner's association. Specifically, you ask "if there are HOA assessments that are past due, such as water, landscaping, road re-topping, etc. . . . and the HOA is unable to collect the fee or assessment, can the local government collect that fee on behalf of the HOA?" Law/Analysis

In your letter, you did not specify whether the fees are being collected by a county or municipal government. Therefore, we look to the authority given to both to determine whether collecting such fees is authorized. After the Home Rule amendments to the South Carolina Constitution, the General Assembly gave broad authority to both counties and municipalities. Section 4-9-25 of the South Carolina Code (2021) states counties, in addition to the powers conferred to their specific form of government, have authority to enact regulations, resolutions, and ordinances, not inconsistent with the Constitution and general law of this State, including the exercise of these powers in relation to health and order in counties or respecting any subject as appears to them necessary and proper for the security, general welfare, and convenience of counties or for preserving health, peace, order, and good government in them. The powers of a county must be liberally construed in favor of the county and the specific mention of particular powers may not be

construed as limiting in any manner the general powers of counties. S.C. Code Ann. § 4-9-25. Furthermore, in section 4-9-30(5) of the South Carolina Code (2021), the General Assembly gave counties the specific authority to impose uniform services charges. Similarly, section 5-7-30 of the South Carolina Code (Supp. 2020) gives municipalities the authority to levy uniform services charges as is "necessary and proper for the security, general RembertC. Dennis Building

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Post Office Box 11549

Columbia, SC 292 11- J 549

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Facsimile S03-253-62S3

The Honorable Stephen Goldfinch
Page 2
January 21, 2021

welfare, and convenience of the municipality or for preserving health, peace, order, and good government in it . . .

S.C. Code Ann. § 5-7-30. In Hospitality Association of South Carolina. Inc. v. County of Charleston. 320 S.C. 219, 464 S.E.2d 1 13 (1995), the Supreme Court considered county and city ordinances imposing fees on gross proceeds from rental of short-term accommodations and city ordinance imposing fees on gross proceeds derived from sale of food

and beverages. The Court found the ordinances valid as they were within both the municipalities' and the county's authority given to them the General Assembly and did not run afoul of the South Carolina Constitution or the general law of the State. Id As such, we recognize the authority of local governments to impose fees. However, we do not believe local governments may impose fees on behalf of a private entity when such a fee is levied, not for a public purpose, but rather for the benefit of the private entity and its members. Initially, we note that both section 4-9-25 and section 5-7-30 contemplate the imposition of fees as are necessary for proper for the security, general welfare, and to preserve health, peace, order and good government. Moreover in section 4-9-30(5), the General Assembly lists items for which taxes or uniform service charges could be levied

including, but not limited to, appropriations for general public works, including roads, drainage, street lighting, and other public works; water treatment and distribution; sewage collection and treatment; courts and criminal justice administration; correctional institutions; public health; social services; transportation; planning; economic development; recreation; public safety, including police and fire protection, disaster preparedness, regulatory code enforcement; hospital and medical care; sanitation, including solid waste collection and disposal; elections; libraries; and to provide for the regulation and enforcement of the above.

While the authority of both counties and municipalities is interpreted broadly, and these lists indicate they are not all inclusive, we do not believe the General Assembly intended to expand the authority of counties and municipalities to include the authority to collect fees on behalf of private entities for private purposes. Article X, section 5 of the South Carolina Constitution (2009) provides in pertinent part that "[a]ny tax which shall be levied shall distinctly state the public purpose to which the proceeds of the tax shall be applied." This provision requires "all taxes levied must be used towards a public purpose."

S.C. Pub. Interest Found, v. S.C. Dep't of Transportation. 421 S.C. 1 10, 123, 804 S.E.2d 854, 861 (2017). Similarly, article X, section 1 1 of the South Carolina Constitution (2009) provides: "The credit of neither the State nor of any of its political subdivisions shall be pledged or loaned for the benefit of any individual, company, association, corporation, or any religious or other private education institution except as permitted by Section 3, Article XI of this Constitution." Our Supreme Court construed this provision to prohibit the expenditure of public funds for the primary benefit of private parties. State ex rel. McLeod v. Riley. 276 S.C. 323, 278 S.E.2d 612 (1981). "As a general rule a public purpose has for its objective the promotion of the public health, safety,

The Honorable Stephen Goldfinch
Page 3
January 21, 2021

morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents, or at least a substantial part thereof." Anderson v. Baehr. 265 S.C. 153, 162, 217 S.E.2d 43, 47 (1975).

The determination of whether a particular ordinance serves a private or a public purpose involves a determination of fact, which is beyond the scope of an opinion of this Office. See Op. Atf v Gen.. 2015 WL 4497734 (S.C.A.G. July 2, 2015) ("[A]s we have cautioned in numerous opinions,

this Office does not have the jurisdiction of a court to investigate and determine facts."). Nevertheless, you mentioned in your letter that the fees collected would be used for such things as landscaping and road resurfacing. Landscaping would presumably only benefit the homeowners association or the private property owners and would not be for the general welfare, security,

prosperity, and contentment of all the residents of the locality. Moreover, in numerous opinions, we concluded public funds cannot be used to maintain private roads. Ops. Atf v Gen.. 2016 WL 5820152 (S.C.A.G. Sept. 23, 2016); 1997 WL 569010 (S.C.A.G. July 16, 1997); 1971 WL 22281 (S.C.A.G. Oct. 20, 1971). Accordingly, we agree with your determination that a court would likely not find collecting a fee on behalf of a homeowners association serves a public purpose and would therefore, find an ordinance authorizing it constitutionally suspect. Conclusion

While we have not been asked to consider a specific ordinance, your opinion request asks generally if local governments can collect fees on behalf of private homeowners associations. As we explained, both counties and municipalities have broad authority to impose uniform services charges in order to further the general health, safety, and welfare of their residences. However, in this instance, we believe such fees would serve only private property owners or the homeowners association itself. Therefore, we are concerned that a court would determine that such fees are in

fact for a private purpose rather than a public purpose and as such, violate article X of the South Carolina Constitution.

Sincerely,

Cydney Milling

Assistant Attorney General

The Honorable Stephen Goldfinch
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January 21, 2021

REVIEWED AND APPROVED BY:

Robert D. Cook
Solicitor General