â€‹The South Carolina Court of Appeals held that a county could not begin directly billing a corporate property owner for the aggregate sewer service of every tenant in its complex, where the county previously had billed the tenants individually and where the restrictive covenants under which the corporation took title did not include that obligation.
The court reversed the findings of the master-in-equity and concluded that the County presented no basis for concluding that the corporate owner, Tranquil Properties, was liable for the monthly sewer service charges of the tenants. Nothing in the restrictive covenants operated to redirect the obligation to provide sewer service to the tenants of the complex.
The County provided sewer service to the planned development Tranquil Acres, billing each tenant individually at a flat rate. In July 2007, after the property was transferred to Tranquil Properties, the County began billing Tranquil Properties directly for the sewer service delivered to the entire complex. The master-in-equity found that the County could directly bill Tranquil Properties because the covenants existing at the time of transfer to Tranquil Properties called for the creation of an association composed of unit owners that could assess fees for the health, safety and welfare of the residents. The master-in-equity found that Tranquil Properties took the units and the common area subject to this requirement, thereby placing ultimate responsibility upon it to provide sewer service to the complex. The master-in-equity concluded that TP was the successor to the association, which under the covenants would have been responsible for paying the sewer bill and recouping the money through assessments.
The court reversed, holding that the County could not bill the successor corporation directly for the sewer service charges incurred by individual tenants of the whole complex. The corporation took the property subject to restrictive covenants that provided the duties of the predecessor association, but the covenants did not include a duty of the association to pay for monthly sewer service to the tenants. The County could not directly bill the corporation for sewer service to the complex simply because the prior method of billing the tenants individually was ineffective or inefficient.
The original covenants did not mention responsibility of the association for sewer services. They were focused more on maintenance and access to recreational facilities in the common area. The covenants placed no duty on the association and TP as successor, to pay for monthly sewer service. The sewer service is utilized by the tenant, and the covenants contained no basis to redirect the obligation of payment to the association. Furthermore, the court held that simply because the direct billing method was ineffective, the County could not redirect billing to the association.â€‹