This blog has previously discussed (here and here) the excellent lawsuit brought by The Finkel Law Firm against the Charleston County Register of Deeds seeking a writ of mandamus requiring the ROD (1) to immediately file all documents delivered to the ROD within one month of delivery; (2) to mark the documents as having been recorded on the date of delivery; and (3) to record all future documents in the order of the time delivery regardless of whether they were delivered in person or by the U.S. mail or parcel post.
The Court appointed Howard Yates, one of the most experienced real estate lawyers of the Charleston Bar, as Court Monitor. Mr. Yates issued a report dated January 31, 2022, the parties signed a Consent Order on February 10, and the Court issued a separate Order, also dated February 10. Please read all three documents here.
Mr. Yates has made numerous recommendations involving, among other matters, increasing office hours, increasing work hours for staff, and hiring employees from other ROD offices to reduce the backlog by working weekends.
The Court will maintain jurisdiction and will require frequent reports on progress. We can all applaud the efforts of The Finkel Law Firm and Howard Yates in bringing this matter to satisfactory conclusion, at least temporarily.
Advice for lawyers: paper your file when clients refuse!
On this cold, wet Monday morning, I was wondering what I could write to help my real estate lawyer friends through a February week in South Carolina. Then I remembered this news article from the U.S. Sun an excellent dirt lawyer friend from the coast sent to me. His quote was: “I wish I could get all buyers to read it when they turn down a survey.” Perhaps you can use this article to convince a client or two.
Any of us who are old enough to have practiced in the 1990s will remember a time when lenders and title insurance companies required current surveys for every closing. A current survey is a great tool for a real estate lawyer to review along with the title work. Comparing the boundary lines with the title work and checking for easements, encroachments and such horrible mishaps as sewer lines running under improvements gave the lawyer and client a great deal of comfort.
Our backdoor neighbors were once Steve and Wendy Spitz. Many real estate lawyers in South Carolina attribute our knowledge and enthusiasm for the practice to Steve’s property classes in law school. We both built in a new subdivision, and a corner of the Spitz home, as revealed by a survey, sat squarely on a City of Columbia water easement. That builder’s mistake was corrected prior to closing by negotiating with the City to move the easement. Thankfully, the water line itself was not a problem.
To hold down closing costs, at some point in the 1990s lenders began to eliminate the requirement for a survey in most residential closings if the lender could obtain title insurance survey coverage. One of the title insurance companies agreed to provide survey coverage to lenders without a new survey. There were some requirements back then, like having a survey of record showing the improvements or having an affidavit from the owner that nothing had changed since the prior survey.
Then, for competitive reasons, all the title insurance companies caved. Current surveys were no longer required. Over the years, the requirements were even softened.
My thought was that the title companies had unceremoniously hung the lawyers out to dry. Previously, the closing attorney simply told the client that a survey was required to close. With the change, the closing attorney had to convince the client of the need for a survey despite the added cost. I believe one of the biggest traps for the unwary closing attorney is failing to advise purchaser clients to obtain surveys and failing to paper files when surveys are rejected.
And don’t even mention the surveyors! They were collectively and understandably furious that they had lost a large portion of their business. I remember being the sacrificial lamb who was sent to speak to a statewide group of surveyors on behalf of the title insurance industry. It wasn’t pretty.
Here’s another story from my neighborhood. A kindly preacher friend bought a house several doors down from us. The free-standing garage had been added prior to my friend’s purchase and well after the original construction. My friend did not obtain a current survey. When he sold the house, a new survey revealed that the garage violated the side setback line by more than ten feet, and the purchaser refused to close. Keep in mind that contracts typically require sellers to give marketable title. A setback violation of this magnitude may be insured over by a title insurance company, but the title may not be marketable. This purchaser was within his rights to reject this title.
By that time, the developer, a Greenville based insurance company, had sold all the lots, and took the position that it could no longer waive violations of the restrictions even though the restrictions clearly allowed for developer waivers. The solution was that my friend went door to door to obtain the signatures of the required majority of the owners. Thankfully, my friend was a very nice guy, and the neighbors were willing to accommodate his request by signing the waiver.
Today, title insurance policies have evolved to the point that survey coverage is often given to owners without current surveys. But the example above demonstrates that title insurance coverage may not cure the underlying problem. Title insurance can never create marketable title. And title insurance claims may take time and cause aggravation that clients will not appreciate.
So let your clients read the linked article and advise them to obtain surveys. And, if they refuse, obtain informed consent confirmed in writing for your file!
The official who records our deeds should not be selected via popularity contest!
I’m all about the democratic process. But when it comes to the Register of Deeds, I believe that person should be appointed locally based on a very specific skill set. Popularity and politics should have nothing to do with choosing the appropriate person to handle the very meticulous administrative process that deals with recording public documents.
Apparently, the Executive Committee of the Charleston County Bar Association wants to take action to make sure the ROD for Charleston County is qualified. Take a look at this letter that body wrote to County Council on January 19.
If you follow this blog, you know that the Finkel Firm has brought suit against the Charleston County ROD asking for a writ of mandamus based on the horrific lag involved with recording documents in that county. This letter provides additional evidence that something is terribly wrong in the Charleston County ROD office, and action needs to be taken sooner rather than later.
As this letter points out, South Carolina is a race notice state. If our deeds, mortgages and other documents are not recorded in a timely manner and in the proper order, then the proper priorities among parties is thrown to the wind. The rights of parties relating to real property are based on when the documents establishing those rights are properly recorded.
The letter lists eighteen counties where the RODs are currently appointed. The letter also states that no constitutional provision or statutory edict requires an election in this case.
What do you think? Should the Register of Deeds be appointed by County Council?
In the first Advance Sheet of 2022, our Court of Appeals answered a novel question concerning the severance of a joint tenancy with right of survivorship. The case* involved the estate of a father who owned property in Garden City with his son, one of his five children. Father and son had purchased the property together, each owning a fifty percent interest.
The facts are simple. The property owners entered into a contract to sell the property in November of 2013, prior to the father’s death on December 20, 2013. The transaction closed on December 27, just seven days after the father’s death. The son, who was also the personal representative, treated the sale as if he was the sole owner and claimed the proceeds of the sale individually. His siblings argued that the contract severed the joint tenancy, entitling the estate to half of the proceeds.
The Probate Court and Circuit Court agreed with the siblings, relying on South Carolina Federal Savings Bank v. San-A-Bel Corporation**, which held that a purchaser under a contract has an equitable lien on the property. The Probate Court reasoned that the sales contract entered into prior to the Decedent’s death encumbered the property, entitling the purchaser possession of the property upon payment of the purchase price and entitling the estate to one-half of the proceeds. The Circuit Court found that the Probate Court had correctly interpreted the law.
Dirt lawyers understand the San-A-Bel case sets up a trap for the unwary lawyer who fails to deal with the equitable lien that case established, but we have never understood that case to affect JTROS severance. The Court of Appeals agrees with us. Since neither San-A-Bel nor the JTROS statutes address the question at hand, the Court decided to look at rulings from other states to address the novel issue of whether a contract of sale severs a joint tenancy.
The Court cited cases from the states of Washington and Florida (citations omitted) and decided to follow the Florida court which held that severance does not automatically occur upon the execution of a contract executed by all joint tenants unless there is an indication in the contract or from the circumstances that the parties intended to sever and terminate the joint tenancy.
The Court found that the contract at issue was silent on the severance issue and no extraneous circumstances indicated severance was intended by the parties, so the joint tenancy was not severed by the contract, and the son was entitled to the sales proceeds.
Dirt lawyers tend to hold our collective breath when our Courts address a novel real estate issue. But I believe that, this time, we can agree that they got it right. Let me know if you disagree with me!
*In the Matter of the Estate of Moore, South Carolina Court of Appeals Opinion 5887, January 5, 2022.
I was impressed once again during the holidays with the fact that some people, and especially some lawyers, don’t enjoy “the most wonderful time of the year”, and I wanted to encourage everyone especially every lawyer who needs help to get help now.
You may have heard about a fellow lawyer in Lexington who committed suicide a few weeks ago, leaving three daughters to grieve his loss. We have all heard news stories of a low country lawyer who has fallen from grace in spectacular fashion with mental health playing a major part in his saga.
My church held a “Blue Christmas” service in early December. This service brought home to me the sorrowful point that many people are unusually sad during the holidays.
Many among us are suffering from the uncertainty and isolation caused by the COVID pandemic. Just when we were beginning to think things were getting much better on that front, we are now being warned about the dangers of the Omicron variant that has created a new surge.
I don’t often recommend books in this blog and especially not works of fiction, but I recently read a novel that handled the impact of COVID so well that I highly recommend it to you. Wish You Were Here, a 2021 novel by Jodi Picoult, gives voice to medical professionals through a New York doctor who works in an emergency department. As the author said in her afterword, we will never be able to thank these professionals for what they have done for us, for what they have seen and for what they have been through.
The book also gives voice to a COVID survivor who spent time on a ventilator. Through this character, we see the importance of some lessons COVID has taught us.
These lessons are particularly important to lawyers. Specifically, the things that are significant in life are not monetary, they are not about the next case or closing. They are not about work at all. COVID has taught us to appreciate the present moment, to appreciate the beauty of nature, and to hold our loved ones close. We must understand that at the end of our lives, our work will not be important at all, but our loved ones will.
We, as lawyers, are supposed to be problem solvers. We are supposed to be strong. We are not supposed to have problems. But lawyers do have mental health problems. I read one statistic that indicated lawyers are 3.6 times more likely to suffer from depression than non-lawyers.
In order to pass our “character and fitness” check to become lawyers and in order to keep our licenses for the long haul, we tend to hide our mental health problems. Having problems and hiding the problems can create perfect storms in our lives.
I encourage any lawyer who is particularly unhappy as the year begins to get help! Therapy is a good thing! You might begin by calling South Carolina Bar’s Lawyers Helping Lawyers toll free helpline at (866) 545-9590 or contact any Lawyers Helping Lawyers member directly. But begin somewhere! The resources are available, and they are helpful. Please, please seek help if you need it.
And, in the meantime, I wish for all of you a wonderful 2022!
As the last blog of the year, I thought I’d tell you the story of one of my recurring dreams, or more accurately, one of my recurring nightmares, for your entertainment.
Do you have recurring dreams? I grew up in Georgetown where everyone makes routine pilgrimages to Charleston for shopping, dining, and medical appointments. My first recurring nightmare as a child involved the fright of crossing that rickety, two-lane bridge between Mt. Pleasant and Charleston. Thank goodness that monstrosity was replaced by the beautiful suspension bridge we cross today!
Later came the dreams involving college at Carolina. I dreamed I couldn’t get into the mailbox in my dorm. I have no idea why I had that dream because nothing very important was ever there. I dreamed my meal card wouldn’t work but that was also a useless dream because missing those dorm meals would have been no great loss.
Then came law school. In those dreams, it was always time for the exam for a class I had forgotten I signed up for. A more accurate dream would have involved a class I knew I signed up for but failed to attend class because I didn’t understand a word the professor said (think international law). Thank goodness my boyfriend had a great “skinny” on that topic and I somehow made it through that class. And I later married that boy.
But my most vivid recurring dreams involve my professional life, and the stories are always based in fact. I’ll tell you the factual, not the fantasy version of this dream. And I’ll avoid the names for attorney-client and other confidentiality reasons. This is the biggest professional mistake I made or, more accurately, the biggest professional mistake I made that I know about. As dirt lawyers, we plant time bombs every day, right?
I represented real estate developers. They developed malls, shopping centers, residential subdivisions, residential condominiums, outlots for McDonalds and other fast-food restaurants and other properties. The story involves a very large tract that was developed into an upscale residential subdivision, a Walmart, a movie theater, a church, and a shopping center.
The development was complicated. It involved environmental issues that could have derailed the entire project. Multiple individuals formed various entities for buying, holding and selling the real estate. The underlying property was purchased from the Federal government, which created its own set of complications. The acquisition, for example, involved a bid process that was foreign to me at the time.
It all finally fell into place, and the residences and businesses are still in place in 2021.
The problem that I thought might derail my career came to light when one of the individual developers declared bankruptcy. When that happened, every legal step I had taken for that person in the prior three years was scrutinized. The main lawyer scrutinizing my work, along with a team of associates, was a law school classmate, and, thankfully, a very kind and smart lawyer. But I spent lots of time worrying that I had missed something important.
I can remember the phone call from my friend all these years later down to the clothes I was wearing and the coffee cup in my hand.
The commercial properties required easements because of the private roads the properties shared. They also had easements for maintenance, pedestrian access, shared utilities, etc. Here’s the pitfall. When properties with these legal connections are owned and mortgaged separately, the lenders almost always must subordinate their mortgages to the easements to ensure the easements remain in place in the event of foreclosure, or in this case, bankruptcy.
I knew that!
I routinely obtained mortgage subordinations at every step of the development, except for one commercial tract. To this day, I have no idea how I missed one set of subordinations. And I think I lost several years off my life between the phone call from my kind classmate until I was able to obtain the subordinations very much after the fact. I was very lucky because the lender I had to approach (hat in hand) was a local lender. I even knew the person I had to persuade to cure my problem. And the good Lord must have smiled on me that day because it all worked out. I kept my license and my clients.
So, as I wish you a very happy, healthy, and prosperous 2022, I remind you to avoid the mistake I made. Always obtain the necessary mortgage subordinations!
This blog has previously informed South Carolina real estate practitioners about the Petition for Writ of Mandamus filed by the Finkel Law Firm against the Charleston County Register of Deeds because of the significant backlog in recording.
Attached here is a copy of the memorandum from the firm requesting affidavits from law firms, title abstractors, realtors, title companies and agencies, and other organizations associated with the real estate industry setting forth how they have impacted with these delays.
Please read this memorandum and help this law firm if you, your office, and your clients have been impacted.
Should limitations be imposed on the use of mascots?
One South Carolina law firm claims to have been unfairly targeted
Left Shark Law?
Several news sources (The Post and Courier, The State, AP News) have recently published stories involving a South Carolina law firm with a mascot problem.
According to the news reports, South Carolina attorney John Hawkins said he has been unfairly targeted by the Office of Disciplinary Counsel because of his law firm’s mascot, a hawk. You have probably seen the television ads showing the hawk and actors flapping their arms like hawks to promote the firm’s personal injury practice.
Hawkins has purportedly sued the ODC in Federal Court complaining that the ODC has reached a settlement with another legal entity that uses a tiger as a mascot for a national network of motorcycle accident attorneys styled “Law Tigers.”
Mr. Hawkins has complained in court filings that his mascot is a three-pound bird that eats mice, squirrels, and other small animals, while Law Tiger’s mascot is a 400-plus pound animal that mauls, attacks and eats people. Which mascot, he questions, unfairly represents the ability to “obtain results” in the personal injury arena?
The news reports indicate that two rival law firms and a former employee all filed complaints with the ODC about the hawk mascot in 2017. This year, the ODC filed formal disciplinary charges.
Hawkins’ lawsuit purportedly makes constitutional arguments against the ODC’s enforcement action. I’m not a litigator, but it seems to me that the place to make this argument is in the disciplinary action itself. It never occurred to me that the ODC could be sued in Federal Court.
What do you think, dirt lawyers? Will that suit be dismissed? Can advertising using mascots unfairly tout a law firm’s strength and ability? Are potential clients confused or unduly influenced by the use of mascots? It will be interesting to see how this story plays out.
Real estate practitioners don’t often get excited about litigation, but this lawsuit should bring cheers from dirt lawyers in every part of the Palmetto State! The Finkel Law Firm, LLC, as plaintiff, filed suit on November 24 against Michael Miller, individually and in his official capacity as the Charleston County Register of Deeds. You can read the complaint in its entirety here.
The complaint points to Miller’s chronic and willful failure to timely record real estate documents within one month of delivery. The allegations state that Miller has allowed substantial delays since late 2019, and that these delays have increased significantly in 2021, sometimes amounting to as long as four months.
Further, the complaint states the Charleston ROD routinely files documents that are hand delivered immediately while allowing hundreds or even thousands of documents delivered to his office by mail or parcel delivery to be stored for later filing.
We all know that South Carolina is a race notice state. Delay in filing real estate documents will, of course, create liability for parties and their lawyers. The complaint makes this point clearly.
The law firm alleges that these failures have substantially interfered with its ability to meet its professional obligations to protect the interests of its clients and has exposed the firm to potential liability for correcting title problems resulting from the ROD’s dereliction of duty.
The complaint seeks a writ of mandamus ordering the ROD:
To immediately file all real estate documents that have been delivered and have not been filed within one month of delivery;
To mark the recorded real estate documents as being recorded on the same date that they were delivered; and
To record all real estate documents in the order of the times at which they were brought to the ROD, regardless of whether they are personally delivered or are delivered by U.S. mail or parcel post.
The complaint asks the court to maintain jurisdiction for a reasonable time to monitor the continued operations of the ROD.
Every real estate practitioner in South Carolina should thank their friends at the Finkel Firm for taking this action. And every ROD in the State should take notice!
Court of Appeals holds the City is not responsible
On November 10, the South Carolina Court of Appeals affirmed a summary judgment order in favor of the City of Columbia concerning the alleged destruction of an archeological and historical bridge abutment during a sewer rehabilitation project*.
The Brinkmans, Colemans, Fosters and Collins (property owners) own real estate on Castle Road on the banks of the Broad River in Richland County. The City of Columbia owns and operates sewer lines that run beneath portions of the property and has a permanent, 15-foot easement across the property for the purpose of maintaining the sewer lines. In 2014, the City began a sewer rehabilitation project which required access to the sewer lines.
According to the property owners, two bridge abutments stood on their property located outside the easement. The owners claim these abutments, which were made of carved rock, were built in the 1700s and were the “oldest existing structures in the Midlands.”
One of the owners testified that he shouted to the City’s contractors and said there was a valued monument on the property. Unfortunately, while the City and the contractors were clearing the land, they destroyed the stones that allegedly comprised the bridge abutments. The City acquiesced to the owner’s request that all work cease, and the property owners brought the subject lawsuit alleging various causes of action, including the destruction of archaeological resources in violation of §16-11-780 of the South Carolina Code.
This statute states that it is unlawful for a person to willfully, knowingly, or maliciously enter upon the lands of another and disturb or excavate a prehistoric or historic site for the purpose of discovering, uncovering, moving, removing or attempting to remove an archaeological resource.
The property owner’s expert testified that he believed the structures were historic abutments from the 1700s or early 1800s and likely to be the “Compty bridge abutment.” He explained that additional excavation and review of other properties across the river would have been the appropriate “next step”.
The property owners submitted an application in 2008 to the National Register of Historic Places, but the Department responded that a great deal more research and archeological investigation was needed before a determination of eligibility could be made.
The record contains a screenshot from the website “ArchSite. The property owner’s expert testified that ArchSite is a multi-agency website that allows access to the archaeological resources database. He explained that when ArchSite receives information about historic sites, it verifies the information and posts it to the website. The image in the record shows a rendering of part of the Broad River and Castle Road, and it includes the notation “Historic Areas: Broad River Ferry and Bridge Site.”
The trial court found no governing preservation or conservation authority had recognized the structures as either archaeological resources or historical structures. In granting the City’s motion for summary judgment, the court found that the City was not liable under the statute.
The Court of Appeals agreed, holding that no evidence exists that the City cleared the land “for the purpose of” discovering, uncovering, moving, removing or attempting to remove an archaeological resource. Clearly, the City was attempting to clear the easement area to access the sewer lines. In addition, the owners provided no evidence that the City had any knowledge of the historic nature of the site.
The owner who shouted at the contractors could not testify that the contractors heard him and did not know whether this incident took place before or after the destruction of the stones. In addition, the Court held that the owners failed to show the City was obligated to consult ArchSite. The Court also questioned whether the entry on ArchSite contained sufficient information to conclude the property is historic because the entry indicates the site is “not eligible or requires evaluation.”
Finally, the Court held that regardless of whether any preservation or conservation authorities designed the structures as archaeological resources, the property owners failed to demonstrate the City had either actual or constructive knowledge of the existence of such resources.
*Brinkman v. Weston & Sampson Engineers, Inc., South Carolina Court of Appeals Opinion No. 5870, November 10, 2021
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