Month: February 2020

“Carolina Crossroads” may sound like a vacation spot

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But it’s “Malfunction Junction”, which is about to get a much-needed rebuild

malfunction junction

Image courtesy of The State

I’ve lived in Columbia since college with the exception of four years in Winnsboro, where my husband and I landed to split the distance between our jobs. The people in Winnsboro were delightful, but we were chastised routinely because our travel and work routines kept us away from home. The town and church ladies were especially bothered that they couldn’t drop in during the week.

A tornado that temporarily separated our growing family caused us to reevaluate our choices and to move jobs and home to one location. After much debate, Columbia won because it wasn’t easy for a female lawyer to find a small-town job in the 1980s. Let me rephrase that. A female lawyer could find a job in a small town if she didn’t need much pay or respect. But that’s a whole “nother” story, as we say in the South. Suffice it to say the city won.

Although schools and housing prices were much more promising in the Irmo area north of Columbia, we decided we didn’t have the patience to handle the commute that ran through the intersection of I-20 and I-26, commonly called “Malfunction Junction”. So I have never battled that disaster area routinely. But any Friday afternoon escape from “Famously Hot” Columbia to the cool of the North Carolina mountains required bravely timing the travel and negotiating the traffic.

I’ve seen friends and co-workers schedule their travel times to downtown Columbia to avoid hitting that area during rush hour. And I’ve seen them justify the commute because of beautiful lakefront homes and great schools. I get it! I just never had the patience for it! I’ve heard tales of the 12-mile commute taking an hour or more. That would require a big investment in audio books for me!

The Department of Transportation plans to alleviate my friends’ pain, but it’s going to take awhile. If you Google “Carolina Crossroads”, the name the DOT has given the project, you will be able to read about the ten-year plan to fix the problem. Yes, I said ten years. Here is a time-line projection.

Why will it take so long?  First, the properties must be acquired. The DOT says it plans to spend $240 million to acquire real estate including gas stations, homes, apartment buildings and a Motel 6. Dirt lawyers, if you handle condemnations as a part of your practice, this may be a time for you to shine!

The new interchange will add lanes to ease merging issues and will connect I-20, I-26 and I-126. The goal is to reduce the number of accidents and the amount of time commuters spend negotiating the area. Apparently 134,000 cars travel through the interchange every day. The $1.5 billion project is being split into five phases.

The first phase includes Colonial Life Boulevard. The second includes Broad River Road. The third will involve the main interchange of the interstate highways and will include St. Andrews Road and Bush River Road.  The fourth phase will include Harbison Boulevard, and the fifth and final phase will involve widening I-26 west of St. Andrews Road.

The DOT says one of the problems with the long-range project is that contractors are reluctant to bid on the massive project. That’s one reason the project was divided into phases. We began to hear rumblings that the project was coming as early as 2015, but the federal government didn’t sign off until spring of 2019.

I can’t wait to hear the stories about how construction will affect the commute. And our vacations may have to avoid the mountains for the next ten years!  But we’re all looking forward to the project’s completion!

“Curbed” article outlines the experience of iSellers

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computer house digital sales smaller

iSeller may not be a “thing”, but iBuyer definitely is. I invite you to read the February 7 article by Jeff Andrews on curbed.com. This article outlines the experience of sellers who deal with Zillow, Opendoor and similar iBuyers. By extension, this article provides insight to real estate lawyers who want to remain in the real estate closing game after iBuyers make their way to South Carolina.

“iBuyer” is short for “instant buyer.” iBuyers buy houses for prices determined by their respective algorithms in the markets where they operate. The article contains a map showing those locations. South Carolina is not among those locations, but Atlanta, Charlotte, Raleigh-Durham, Jacksonville, Birmingham and Nashville are. How far behind can we be?

Selling a home through an iBuyer can be much simpler than the market we currently occupy. The homeowner opens the iBuyer’s website, enters their address and some basic information about the house. Within a few days, the iBuyer will make an offer.

The seller doesn’t have to clean the house, stage the house, store excess furniture, board pets, leave home for open houses, or any of the other indignities suffered under our current system. It’s a much easier process.

What’s the catch? The seller may be leaving money on the table. The offer will be less than the amount the homeowner could receive if all the games are properly played on the open market.

According to this article, if the offer is acceptable to the seller, he or she will schedule a time for a representative from the iBuyer to visit and asses the home. If maintenance issues are spotted, the seller may choose to complete the repairs or to allow the iBuyer to complete them at the seller’s expense.  At that point, a final offer will be made.

The seller is allowed to select a closing date, typically within 60-90 days. The closing date is typically flexible and within the seller’s control. There is no worrying about the contingency of the buyer to sell their house or obtain financing.

While the real estate agents in normal closings might charge a total of 6 or 7 percent for commission, the iBuyer might charge a transaction fee of 7.5 percent. According to this article, the iBuyer makes most of its money in these transaction fees. The houses are subsequently sold on the open market, so there will be a profit, but the iBuyer is not a home flipper. Substantial repairs are not made, and substantial profits are not made.

So the dichotomy for the seller seems to be convenience vs. price. If the amount the seller loses in price is worth it because of the convenience, then the seller is a prime candidate to do business with an iBuyer.

We’ll pay attention as this phenomenon grows, and we’ll definitely report when it hits South Carolina!

State challenges Hobcaw Barony’s claim to North Inlet

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Hobcaw Barony

Photo courtesy of The Post and Courier

This blog recently discussed an interesting lawsuit brewing in Georgetown County involving the property of Hobcaw Barony and adjacent North Inlet. The owner of Hobcaw, the Belle W. Baruch Foundation, is claiming title to 8,000 acres of marsh at North Inlet, a vast marshland that has always been used by the public for recreational purposes. The lawsuit claims title to the property by virtue of a Kings Grant.

Local gossip indicates the Foundation simply intends to clean up title issues and does not intend to preclude the public from enjoying the property. But the complaint reads like a normal quiet title action of marshland property and the locals are nervous. An easement has been suggested to resolve the conflict, but this suggestion has been rebuffed by the Foundation.

The State of South Carolina has now filed responsive pleadings asking for an order declaring that the property is dedicated to public use. The State’s response to the Foundation’s complaint alleges that the Foundation lacks the power to exclude the general public from the property because the public has a right to the use of navigable waters.

The State claims the public is entitled to the marshland through continued use of the property for fishing, shrimping, crabbing and similar activities for generations.

I’ll keep you posted as this issue is litigated.

Padding legal bills leads to suspension of South Carolina lawyer

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red card - suit

The South Carolina Supreme Court meted out discipline to a lawyer in terms of a definite three-year suspension on January 22.* Three straightforward reasons for the suspension are highlighted by the very short opinion:

  1. The lawyer fell behind on his billable hours and falsified his time;
  2. The lawyer was not always truthful with clients regarding their cases in an attempt to cover for his uncompleted work; and
  3. The lawyer falsified expense reports. Specifically, he altered hotel and airline bills to receive reimbursement for trips that were not made and client dinners that did not occur.

The opinion details that the lawyer padded his time by more than 35 hours and his expense reports by more than $5,000.

I don’t know about you, but I find these sums shockingly small. I don’t mean the lawyer should not have been disciplined. The punishment clearly fits the crime in my mind. Rather, it seems to me that putting a license to practice at law at risk for such minor sums is a colossal act of inanity.

The time and effort each of us puts into obtaining the privilege to practice law should encourage all of us to follow the rules. Some of the rules are not intuitive. Some of them are indisputably difficult to understand and remember. But the rules this lawyer broke are the simplest of all and breaking them can be described by one word: dishonesty.

I remember the first time I handled a closing for more than $20 million way back in the 1980s. I joked that I knew then that I would never dip into my trust account. In retrospect, that was a terrible joke. None of us should ever think for a moment that we can “borrow” from our trust accounts, no matter how small or how large the number.

But facing a three-year suspension for $5,000 and 35 billable hours is inconceivable.

Be smart and safe out there, lawyer friends!

 

*In the Matter of Sloan, South Carolina Supreme Court Opinion 27936 (January 22, 2020)