Different contributor here. Please permit me to assist.
The information from Nolo that you received is based upon California law, as interpreted by the attorney who wrote the article, and is founded (presumably) on the case of In re Foster, 435 B.R. 650 (9th Cir. 2010), decided by the U.S. 9th Circuit Court of Appeals, which governs bankruptcy case law throughout most of the Western USA
However, South Carolina (apparently where your property is located) is controlled by the U.S. 4th Circuit Court of Appeals. Consequently, while the Foster
case is persuasive authority, it is not binding law for South Carolina bankruptcy courts. In fact, no bankruptcy court controlling South Carolina jurisdiction has decided the issue of dischargeability under Bankr. Code 523(a)(16)
. However, the 4th Circuit has ruled similarly to Foster
, on the issue of covenants running with the land, vis-a-vis contractual obligations, in interpreting Section 523(a)(16) and Virginia law. See River Place E. Hous. Corp. v. Rosenfeld (In re Rosenfeld), 23 F.3d 833
(4th Cir. 1994).
So, the question for your purposes is: How would the court rule on the issue when interpreting South Carolina law?
There are two nonbankruptcy South Carolina cases which differ on this issue. The bankruptcy courts would use these cases to try to determine a debtor-association member's liability under Bankr. Code
In Harbison Community Ass'n, Inc. v. Mueller, 319 S.C. 99 (SC Ct. App. 5/30/1995), the SC Court of Appeals held that covenants requiring property owners to pay fees for improvements, maintenance or other services to a homeowners association run with the land. This decision would support the argument that the association fees, whether pre or post-petition
, are not dischargeable under Section. 523(a)(16).
However, in First Federal Sav. and Loan Ass'n of Charleston v. Bailey, 316 S.C. 350 (SC Ct. App. 9/19/1994), the SC Court of Appeals held that covenants requiring the payment of maintenance assessments are contractual in nature and bind the parties to the covenants in the same manner as other contracts.
In summary, at this instant in time, no one
can answer your question. It's still "up in the air," and it may depend somewhat on the exact text of the declaration of covenants, and how they discuss the obligation to pay homeowners assessments.
So, while I realize that everyone here (and presumably, your bankruptcy attorney, as well) wants to be correct in their respective analysis and conclusions concerning this issue -- the fact is that we are all just "pissing in the wind" at the moment, because the answer is subject to the interpretation of the bankruptcy courts sitting in South Carolina, and the 4th Circuit Court of Appeals if the matter is appealed by either party after the bankruptcy courts decide.
Please let me know if I can be of further assistance.