South Carolina Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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).