South Carolina

General Procedures and Information

South Carolina is a traditional "Attorney State"

South Carolina is a traditional "Attorney State", which means that real estate closings are considered the practice of law.  There are two preeminent decisions of the South Carolina Supreme Court which set forth with particularity the attorney's role in real estate transactions.  In State v. Buyers Services Company, Inc., 292 S.C. 426, 357 S.E.2d 15 (1987), and Doe v. McMaster, 355 S.C. 306, 585 S.E.2d 773 (2003), oour Supreme Court enumerated the pertinent parts of a real estate transaction, whether refinance or purchase, that are defined as the practice of law in South Carolina.  Although stated in slightly different language in the two cases, both hold that attorneys must perform the following functions relating to closings:  (1) supervise the title search, title examination, and preparation of abstracts; (2) prepare or review loan documents; (3) supervise the closing and provide advice to the buyer; (4) record legal documents.  To this list must be added a fifth function, the disbursement of funds, which was included as an action which must be supervised by a lawyer in a subsequent attorney disciplinary opinion.  See In re Fortson, 361 S.C. 561, 606 S.E.2d 461 (2004).

This case law mandates that all aspects of any closings involving South Carolina property must be controlled by an attorney licensed to practice law in the state.  The attorney must certify title after examining the title work.  The attorney must be listed as the "Settlement Agent" on the HUD-1 or HUD-1A, and must personally perform the actual closing.  The attorney must record all documents required to be filed with the county and the proceeds of the transaction must be disbursed by the attorney.  Mail-away closings are permissible, but even in these instances the attorney must exercise the same control over the transaction.

 

 

Method of Issuing Title Insurance

Title agents and attorney agents issue title insurance policies and related forms.

Foreclosures

Foreclosures are judicial in South Carolina.

For specific questions, contact South Carolina underwriting personnel.

References:

Related Bulletins: None.


Corporate Directory: South Carolina Contacts.

Redemption Rights

After a foreclosure sale, the owner has no right of redemption.  However, if there is a federal tax lien, then the IRS has 120 day right of redemption (See Section 6.08.9.6 of the Underwriting Manual).

References
Related Underwriting Manuals:

6.08   Federal Tax Liens

Survey Standards

Stewart Title Guaranty Company does not require a survey for deletion of the survey exception in loan policies on 1-4 residential properties and commercial properties with liabilities of $10 million or less. Residential properties are defined as subdivision lots and acreage tracts of twenty-five acres or less.

References
Related Bulletins:

MU000028   Survey Requirements - Loan Policies

MU000038   This Bulletin has been replaced by MU2007002.

Document and Form Information

Acknowledgments

These are the standard forms of acknowledgment:

  • SC Acknowledgment-Individual 1
  • SC Acknowledgment-Individual 2
  • SC Acknowledgment-Witness for Individual Grantor 1
  • SC Acknowledgment-Witness for Corporation Grantor 1

Conveyances

The customary form of conveyance is the SC Deed-Warranty 1. Other common forms of conveyance include the following:

  • SC Deed-Warranty (Joint Tenancy with Right of Survivorship) 1
  • SC Deed-Quitclaim 1

Two witnesses must sign deeds executed within or outside South Carolina.

Releases/Satisfactions

These are the standard release forms:

  • SC Satisfaction of Mortgage 1
  • SC Release of Mortgage 1

Security Instruments

The customary security instrument is the Mortgage. Two witnesses are required for mortgages executed within the state. Mortgages executed and acknowledged in accordance with the laws of another state will be accepted for recordation without two witnesses.

Title Insurance Form Regulations

All title insurance policy forms and endorsements must be filed with the Insurance Commissioner. Stewart Title Guaranty Company has filed standard ALTA policy forms and endorsements for use in South Carolina.

References:

Forms List: South Carolina Forms .

Fees, Rates and Taxes

Deed Transfer Taxes and Documentary Stamps

The current rate for the deed transfer tax is $1.85 per every five hundred dollars of consideration or fraction thereof.

The seller customarily pays the deed transfer tax.

References:

Related Bulletins: None.

Mortgage Transfer Taxes

South Carolina does not have a mortgage tax.

Real Estate Taxes

Real estate/ad valorem tax due dates vary throughout South Carolina.

Recording Fees

Recording fees for a document are $10.00 for the first four pages and $1.00 for each additional page. The first page of an assignment or partial release is $6.00. A flat $5.00 recording fee is assessed for all satisfactions of mortgages.

Search and Examination Fees

The purchaser customarily pays the search and examination fees.

Title Insurance Rates

Title insurance rates must be filed with the Insurance Commissioner.

The purchaser customarily pays for both the owner and loan title policies.

For specific questions, contact South Carolina underwriting personnel.

References:

Corporate Directory: South Carolina Contacts.

Spousal Rights

Spousal Rights

Dower and curtesy have been abolished in South Carolina.

South Carolina is not a community property state.

South Carolina has a homestead exemption from execution by judgment creditors. Spouses need not join in the conveyance or the mortgaging of property.

Statute Of Limitations

Statute Of Limitations

Judgment liens have a limitation period of 10 years. S.C. Code Ann. Sec. 15-35-810

State tax liens have a limitation period of 10 years. S.C. Code Ann. Sec. 12-7-2450

Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

South Carolina is a traditional attorney-state which defines the closing of real estate transactions as the practice of law. Specifically, the SC Supreme Court has identified five functions which constitute the practice of law:

(1) Supervision of the title search and title examination;
(2) Review of closing documents;
(3) Supervision of the closing (Note: paralegals may not conduct closings);
(4) Supervision of the recording of documents;
(5) Supervision of the disbursement of funds.

It should be noted that in the case of Matrix Financial Services Corp. v. Frazer, 394 S.C. 134; 714 S.E.2d 532 (2011) the Supreme Court indicated that if a mortgage loan closing was done without a South Carolina licensed attorney being involved as stated above, the lender may be denied equitable relief in a foreclosure action.

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

Cancellation and commitment fees are neither required nor prohibited.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

The attorney who paid off a mortgage loan may satisfy the mortgage by affidavit if he or she has a written payoff statement from the lender and the cancelled check or proof of wire transfer for the proceeds paid to the lender. 

Deeds

Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.

Residential property is customarily conveyed by general warranty deed while commercial property is customarily conveyed by limited warranty deed. General warranty, limited warranty, and quit claim deeds are insurable. Tax deeds or Sheriff’s deeds may only be insured in limited circumstances, and will require local underwriter approval.

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed. 

There is no necessity for spouses not in title to join in the execution of deeds or mortgages.
South Carolina does not recognized civil unions.

Mortgage Tax

Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe. 

None.

Payment Customs

Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

(a) Owner’s Policy: Buyer

(b) Transfer Tax & Recording Fee: Transfer Taxes (Deed Stamps) are customarily paid by the seller; seller customarily pays for recording of satisfactions for any outstanding mortgages on the property; the other recording fees are customarily paid by the buyer.

(c) Survey Charges: Buyer

(d) Closing/Settlement Fees: The attorney does charge a closing or settlement fee. This typically is a buyer’s charge.

All of the above are merely customary and any or all may be negotiated.

Policy Countersignatures

What kinds of countersignatures, if any, are required to issue the policy? 

The issuing agent will sign the policy jacket. The signing agent must be licensed in South Carolina even for direct issue by Stewart Title. 

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

Ad valorem taxes on real property are paid annually in arrears; with taxes for the preceding year being due on January 15th of the following year. Tax bills are issued by each county in October. 

Please consult with a local underwriter for information relating to real estate taxes on the subject property.

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.

Title search and title examination fees are customarily stated separately from the title insurance premium. 

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.

(A) No
(B) No 
(C) No

There are no statutory or regulatory requirements which specify a minimum period for title searches.

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Mortgage. Deeds of Trust are not permitted.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state.

The standard exceptions are:

Rights or claims of parties in possession not recorded in the Public Records.

Easements or claims of easements not recorded in the Public Records.

Any discrepancies, conflicts or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of the improvements.

Any lien, or right to a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.

Taxes or assessments which are not recorded as existing liens in the Public Records.

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

None.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau. 

All title insurance forms and rates must be submitted to and approved by the SC Department of Insurance. www.doi.sc.gov

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.

Transfer taxes are paid in the form of deed stamps. Deed stamps cost $3.70 per thousand dollars of consideration. Odd consideration amounts are rounded up to the next $500. These rates are uniform state-wide. 

Usury

Is usury coverage available?

Usury coverage is available.

There is no general usury limits on non-consumer transactions. Interest on consumer credit transactions are limited by S.C. Code Ann. Section 37-2-201.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?

Closing attorneys are required to withhold a percentage of the gain recognized by non-resident sellers. The amount of gain is specified by the seller in an affidavit, which the attorney and buyer may rely upon. The withholding rate is 7% of gain for individuals and 5% of gain for corporations and other entities. 

Witness Requirements

Are witnesses required on a deed or security instrument? If so, please describe.

Deeds, mortgages, and powers of attorney require two witnesses and must be notarized. The notary may use either an acknowledgment or probate (the probate being a South Carolina method of authenticating a document whereby the witnesses attest to the validity).

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