1.01 The Condominium Concept

• Library: South Carolina Community Association Law: Condominiums and Homeowners Associations (SCBar) (2019 Ed.)

1.01 The Condominium Concept

Condominiums in South Carolina are governed by the South Carolina Horizontal Property Act¹ (SCHPA). Unlike in some other states, the Act is not amplified or explicated by administrative regulations.²

The condominium form of ownership is a creature of statutory origin and subject to the control and regulation of the legislature.³ Land submitted to a horizontal property regime creates no new property; the South Carolina Horizontal Property Act merely creates a new way to own and regulate airspace.⁴

The enabling act, not common law, should be the guide for resolving condominium issues.⁵ For example the Uniform Condominium Act states that it "applies to all condominiums created within this state after the effective date of this Act."⁶ Implicit in the language of the act is that a condominium could be created absent enabling legislation. "Common law" condominiums, those created prior to enabling legislation, have been recognized,⁷ however, many acts prohibit the creation of condominiums without benefit of the state act once it has become effective. By comparison, the SCHPA provides:

Whenever a lessee, sole owner or the co-owners of property expressly declare, through the recordation of a master deed or lease, which shall set forth the particulars enumerated in § 27-31-100, their desire to submit their property to the regime established by this chapter, there shall thereby be established a horizontal property regime.⁸

The act does not apparently expressly proscribe creating a condominium form of ownership outside its framework.⁹ Practically speaking this is an issue of greater concern in states where the condominium act contains consumer protection and disclosure provisions that a developer, who perceives marketing benefits in the use of the term condominium, finds onerous.

The more significant conceptual problem is not whether a condominium may be created outside the enabling act but what is the nature of the beast? Condominium ownership is confused with both traditional fee ownership and with tenancy.¹⁰ The SCHPA does not dispel the latter misunderstanding when it uses the term apartment to define an individual unit in a condominium project.¹¹

To resolve the conceptual problem it must be asked: (1) what is the nature of the condominium form of ownership; and (2) what is the import of that form of property ownership to the owners individually and collectively?

A Maryland¹² court answered the first question by saying ".. .a condominium unit owner ...possesses a hybrid form of property interest: one in fee simple to the exclusion of everyone, and the other as a tenant in common with his fellow unit owners."¹³ A New York¹⁴ court offered a somewhat longer explanation.

It is a system of ownership of real property whereby a parcel of real estate and the building or buildings existing thereon are owned by more than one person, each of whom has two separate and distinct real property interests: (1) Fee simple ownership of a unit or apartment; and (2) an undivided interest together with all the other unit owners in the project, in the common elements.¹⁵

A South Carolina commentary¹⁶ described the common elements as having unique characteristics that distinguish them from tenancy in common or joint tenancy. The distinguishing points are: the common ownership in a condominium prohibits an owner from separating his or her interest in the common elements; the interest need not be created in a single instrument; and, there is no right of survivorship in co-owners. The commentary concludes these attributes are a form of concurrent ownership peculiar to the condominium, and a condominium is a creature of statute.

What then is the importance of this form of ownership for the owner? First, while the owner is not a tenant, concurrent ownership of the common elements means the unit owners have limitations and obligations that do not exist with...