Background
Five homeowners in a Richland County subdivision (collectively, Appellants) filed a declaratory judgment action against their homeowners association, WildeWood Sections I-IV HOA, challenging the validity of (1) the assignment of deed restrictions to the HOA, (2) an amendment to those deed restrictions, and (3) the HOA’s authority to impose a fee assessment and to place a lien on Appellants’ properties for unpaid assessments. The master-in-equity granted summary judgment for the HOA, finding all of Appellants’ claims barred by the applicable three-year statute of limitations. On appeal, Appellants argued: (1) no statute of limitations applies to an action in equity; (2) even if a limitations period applies, a twenty-year, not three-year, period should apply because the underlying documents were sealed instruments; and (3) the question of the HOA’s lien authority was moot.
The Court’s Holding
The Court of Appeals affirmed under Rule 220(b), SCACR, on all three issues.
On the first argument (no statute of limitations in equity): the court held the issue was not preserved for appellate review. Appellants had not argued to the master that their action was categorically exempt from any statute of limitations; below, they had argued only about which limitations period applied and when it began to run. Raising a new legal theory for the first time on appeal is not permitted under Wilder Corp. v. Wilke, 330 S.C. 71 (1998); the argument had to be raised and ruled upon in the trial court to be preserved.
On the second argument (twenty-year period for sealed instruments): the court also found this unpreserved. Appellants had never argued to the master that the underlying deed restriction and amendment documents were “sealed instruments” bearing the twenty-year period. The argument that the parties “intended” to create sealed documents, even though no seal was visible on the face of the instruments, was raised for the first time on appeal.
On the merits of the three-year period: the master had properly applied the three-year statute of limitations to Appellants’ claims that the assignment of deed restrictions and the amendment were invalid and that the HOA lacked authority to impose assessments or liens. See Fleming v. Rose, 350 S.C. 488 (2002) (summary judgment standard). The relevant acts—the assignment and the amendment—occurred years before the complaint was filed, and Appellants had knowledge or reasonable inquiry notice of the facts giving rise to their claims well before the three-year period began to run. Summary judgment was appropriate.
On the lien-authority mootness argument: the court did not separately address this issue at length, finding it was encompassed within the limitations ruling, and the limitations bar applied to the lien-authority challenge as well as to the validity challenges.
Key Takeaways
- A homeowner’s challenge to the validity of deed restriction assignments, deed restriction amendments, and HOA lien authority must be brought within the applicable statute of limitations; in South Carolina these challenges are subject to the three-year general limitations period when the underlying documents are not sealed instruments, and claims accruing outside that period are time-barred.
- The argument that an action in equity is categorically exempt from any statute of limitations must be raised in the trial court to be preserved for appeal; it cannot be injected for the first time in an appellate brief, even as a legal theory that would alter the outcome.
- Similarly, the argument that documents constitute sealed instruments eligible for a twenty-year limitations period must be presented to the trial court with specific facts and legal argument; a general argument about the parties’ “intent” to create sealed documents is unpreserved if never offered to the master.
- HOA practitioners and subdivision residents facing assessment or lien disputes should act promptly: a challenge to the foundational authority of the HOA to impose assessments or place liens—based on alleged invalidity of the underlying deed restriction documents—must be filed within three years of accrual or it will be dismissed on limitations grounds regardless of the merits.
Why It Matters
South Carolina’s residential communities increasingly rely on HOA-enforced deed restrictions and assessment-and-lien authority to fund common area maintenance and community services. When homeowners challenge the foundational documents underlying that authority—the original deed restrictions, their assignment to the HOA, or amendments to them—they must act quickly. Leonard v. WildeWood is a reminder that the three-year statute of limitations applies to these challenges and runs from the time the homeowner knew or should have known of the facts giving rise to the claim. Waiting to challenge the HOA’s authority until the HOA has actually filed a lien and taken collection action will frequently be too late.