2.01 Introduction

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

2.01 Introduction

Creation of a horizontal property regime is accomplished through compliance with the South Carolina Horizontal Property Act (SCHPA).¹ The master deed or master lease is the seminal document of a condominium.² It has been described as

More than a mere contract spelling out mutual rights and obligations of the parties thereto - it assumes some of the attributes of a covenant running with the land, circumscribing the extent and limits of the enjoyment and use of real property. Stated otherwise, it spells out the true extent of the purchased, and thus granted use therein.³

It has even been said that the declaration assumes the attributes of a constitution⁴for what has been called a little democratic sub society.⁵ The master deed or lease, according to the SCHPA, is the document that establishes the property as a condominium or horizontal property regime.⁶ It is more commonly known as the declaration, a term that is preferable if only because it more accurately describes the creation process. The SCHPA states that:

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 [the SCHPA] there shall be established a horizontal property regime.⁷

This language would imply that a horizontal property regime subject to the SCHPA cannot be created unless a master deed or lease is recorded. In order for the master deed or lease to meet the requirements of the SCHPA and be recorded, it must contain certain information discussed later. What if it fails to meet those requirements? The South Carolina Supreme Court found in Battery Homeowners Ass'n v. Lincoln Financial Resources,⁸ that where a master deed did not state that the project was a horizontal property regime — one of the statutory requirements — it was not governed by the Act. In Dickey v. Barnes,⁹ the developer attempted to nullify the condominium regime in a declaratory judgment action. The project had encountered difficulties including the refusal of title insurance companies to insure the property because they concluded that even though the developer had filed a declaration with the intent of creating a condominium, the declaration had failed to comply with the state condominium act. The court decided that "...assuming the declaration did not conform to the statutory requirements in some respects, these deficiencies, if any, would constitute a mistake in the transaction between the parties, thus making the contract eligible for reformation in equity."¹⁰ It has also been suggested that where there is some deficiency in the documents, that a court might analogize to the "defacto corporation'' concept and find that there is a "defacto condominium."¹¹

Where the master deed or lease fails to list all of the common elements, the language of Cambridge-on-the-Lake Homeowners Ass'n v. Hynes,¹² might be relied on. The court in Hyne...