Did South Carolina’s local-government transfer-fee ban prohibit Harbor Island’s homeowners association fee in 2005?

Plain-English summary

In 2005, the Attorney General said South Carolina’s statute limiting transfer fees imposed by counties, municipalities, school districts, and special purpose districts did not apply to the Harbor Island Owners Association. Despite a requester’s “quasi-governmental” description, the AG treated the association as a private body and found no state statute directly prohibiting its proposed real estate transfer fee.

That did not settle whether the association could collect the fee from a particular member or transaction. The AG said the answer was a private contractual matter, dependent on any applicable agreement or bylaws. He did not interpret those documents or declare the fee valid for all transfers.

Currency note

This opinion was issued in 2005. 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

Did the statutory ban on local-government transfer fees cover this HOA?
No. The AG said the association was not one of the governmental bodies listed in the statute.

Did the AG approve the association’s proposed fee for every sale?
No. He said its propriety depended on the contracts or bylaws binding the association and affected members.

Why did the requester call the association quasi-governmental?
The request described its control of common areas, but the AG found no statute giving it governmental authority for the transfer-fee rule.

Background and statutory framework

The opinion compared the statutory restriction on governmental transfer fees with the private association’s proposed fee. It referred to an earlier AG opinion that treated association charges as depending on the agreement between the association and its members.

Citations and references

• § 6-1-70: transfer-fee restriction for listed local government bodies.

Official title

Questioning the legality of a real estate transfer fee imposed by the Harbor Island Owners Association (HIOA) of Beaufort County.

Requester

The Honorable Catherine Ceips, Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/january-5-2005/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/05jan5-ceips.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
HENRY MCMASTER
ATTORNEY GENERAL

I

January 5, 2005

The Honorable Catherine Ceips
Member, House of Representatives
326-A Blatt Building
Columbia, South Carolina 29211
l

Dear Representative Ceips:

In a letter to this office on behalf of a constituent, the question was raised as to the legality of a real estate transfer fee imposed by the Harbor Island Owners Association (HIOA) of Beaufort County. It was indicated that HIOA "is a quasi-governmental body which is responsible for the ' exclusive management, operation and control of the common areas of Harbor Island and all improvements thereon."' According to the request letter, on February 21, 2003, the Board of Directors of the HIOA voted to impose a one hundred dollar real estate transfer fee in order to generate income for HIOA.

L..

While HIOA was referred to as a "quasi-governmental body", I am unaware of any State statute granting the HJOA any particular authority. Reference was made in the request letter to the provisions of S. C. Code Ann. § 6-1-70 (2004) which provides in part that (A) Except as provided in subsection (B), the governing body of each county, municipality, school district, or special purpose district may not impose any fee or tax of any nature or description on the transfer of real property unless the General Assembly has expressly authorized by general law the imposition of the fee or tax. (B) A municipality that originally enacted a real estate transfer fee prior to January 1, 1991 may impose and collect a real estate transfer fee, by ordinance, regardless of whether imposition of the fee was discontinued for a period after January 1, 1991. I am unaware of any basis to apply such provisions to the HIOA as that organization is clearly not a county, municipality, school district or special purpose district. Moreover, I am unaware of any other State statutory provision that would be applicable so as to prohibit the charging of a real estate transfer fee by the HIOA. A prior opinion of this office dated August 30, 2001 commented that
...the ability of a property or homeowners ' association to assess and collect fines and penalties for violations occurring on private property would probably depend on the

c.

/
I ~Ellr,
D ENNIS BUIID!NG • POST OFFlCE Box 11 549 • COLl.JMalA,
\ £h •. .o~ '1 l A"/ ,,. -

s.c. 292 11 · I 549 • TELEl'HONE: 803·73 4.3970 • FACSIMD..E: 803-253-6283

(

I
I
I

The Honorable Catherine Ceips
Page2
January 5, 2005

nature of the homeowners' association's agreement and whether the violator was a member of the association or in a position contractually which would bind the violator to the terms of the agreement. Courts in other jurisdictions have addressed similar questions. In Florida, the State District Court of Appeal held that a homeowners' association had the authority to assess fines against a homeowner based on violations of covenants restricting parking... Similarly, the Court of Appeals of Wisconsin noted ... that the property owners' "association's power to fine its members depends on the contract between the association and the members embodied in the bylaws and articles. The opinion further stated that a property owners' association ability to collect penalties would be strictly a private matter between the association and the member. Consistent with the above, in my opinion, the matter of the propriety of a real estate transfer fee imposed by the Harbor Island Owners Association (HIOA) ofBeaufort County is a private matter dependent upon the applicability of any agreement or contract between the Association and a member of the Association. Reference may be made to the bylaws of the Association as one possible means of determining such question. With kind regards, I am, Very truly yours,

L

&JeJ/T!UcJlr_
Charles H. Richardson
Senior Assistant Attorney General

I
REVIEWED AND APPROVED BY:

~Vti{!+· &4-1

Robert D. Cook
Assistant Deputy Attorney General