South Carolina

Data Centers Raise Legal Questions for Rural South Carolina

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Across rural South Carolina, data center proposals are generating increasing controversy as residents challenge whether counties are complying with zoning statutes, comprehensive plans, and public‑notice requirements.

In Colleton County, Council amended its zoning ordinance to add data centers as a permitted use and to create a special exception within residential districts – changes that paved the way for a proposed $6 billion facility near the environmentally protected ACE Basin. In January, neighboring landowners, represented by the Southern Environmental Law Center, filed suit alleging that the county enacted these amendments without adequate notice or transparency, that the changes conflict with the county’s comprehensive plan, and that allowing an industrial special exception within a rural district is inconsistent with existing zoning classifications.

Similar disputes continue to surface statewide. In Marion County, Council recently approved a $2.4 billion data center project and a fee‑in‑lieu‑of‑tax agreement. The project appeared on the agenda only under the code name “Project Liberty” and was covered by a nondisclosure agreement, leaving the public without meaningful information until the final reading. Aiken and Berkeley Counties have faced comparable challenges.

Opponents of data centers emphasize their extraordinary electrical demand, which has already strained power grids across the country. Some estimates now place data‑center consumption at roughly seven percent of U.S. electricity use, with projections continuing to rise. In the Colleton debate, residents expressed concern that utilities lack sufficient capacity to serve the proposed facility and that ratepayers – particularly Santee Cooper customers – may ultimately bear the cost of necessary upgrades.

Water usage presents a parallel problem. Data centers generate substantial heat and rely heavily on water‑based cooling. The volume required can impose real stress on local water systems, particularly in rural areas. While newer closed‑loop cooling technologies reduce consumption, they require additional energy and higher capital investment.

Other community impacts have also drawn scrutiny. Backup diesel generators – which data centers depend on for uninterrupted service – emit gases and particulates that may pose health risks. Residents in rural counties also cite noise, light pollution, and the visual intrusion of large industrial campuses as threats to the historic and environmental character of their communities.

Yet despite these concerns, the economic incentives remain significant. Proponents of the Marion County project note that the facility could generate nearly $28 million annually for a county operating on a $25 million budget. Construction phases typically span several years, providing a substantial economic boost. And although data centers require relatively few employees once operational, they nevertheless contribute positively to local employment and tax revenue. Moreover, the facilities are essential to the growth of artificial intelligence and advanced computing – technologies many policymakers liken to a modern “space race.”

The General Assembly has taken notice. Several bills addressing data‑center siting, utility impacts, and environmental standards have been introduced this session. Developments in the Colleton County litigation, along with potential legislative action, will likely shape future permitting and zoning practices statewide.

For South Carolina lawyers, these projects are becoming increasingly complicated to navigate to completion. Title insurers are increasingly view data centers as high‑risk properties due to their scale, public visibility, and susceptibility to challenge. Attorneys may be asked to perform extended title examinations, provide more detailed zoning analyses, and secure specialized endorsements requiring careful underwriting. As counties pursue these high‑value developments and as communities continue to push back, lawyers will as always be on the front lines.

Appeals Court Upholds Ruling Nullifying Transfer of Common Elements

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The SC Court of Appeals released a new decision this week confirming that a Developer of a Horizontal Property Regime (HPR) may not remove common elements from the regime once the right to the common elements has vested in the individual unit owner. 

The facts are somewhat complicated, but I will try and simplify it as best as I can. The Developer of the fully constructed Mariner’s Cay Marina in Charleston committed the property to a HPR in 2006.  

The Marina consisted of individual boat slips, a fuel dock with a wastewater pumping station, and a two-story Ship Store. The 88 individual boat slips were converted to separate units or apartments with a designated ownership percentage of the common elements. The first and second floors of the Ship Store were designated Commercial Units 1-A and 1-B respectively. The fuel pump and the attendant wastewater pumping station were designated as Commercial Unit 2. The Master Deed stated that the Commercial Units were “common elements or limited common elements [of the Regime].”    

However, the Master Deed also provided that the Developer retained a right to “unilaterally amend the declaration for any purpose” for the earlier of 18 months or the point where it sold 90% of the unit, but not in such a way as to “adversely affect the title to any Unit unless the Owner shall consent in writing.”

In 2007, during its “unilateral” rights period, Developer amended the Master Deed by removing the language that designated the the Commercial Units as common elements or limited common elements.  At the time of the Amendment, at least 39 individual units (slips) had been sold. 

Shortly after recording the amendment to the Master Deed, Developer sold the Commercial Units to a third party, who in turn sold the property to another entity. This down the line entity borrowed money for construction at the Store, which it secured by a mortgage on the Commercial Units.  

It would not make for a good story unless the mortgage went into default. Lender filed a foreclosure action naming the HPR as a defendant by virtue of its liens for assessments. The Court indicates that the HPR participated in the proceedings without contesting the foreclosure or the right of the Developer to have transferred these units in the first place. In February 2015 the property was sold at public auction. It eventually was sold again to the two LLCs that are the defendants in the ensuing litigation.

It appears that between 2006 and 2015, the slip owners had enjoyed free use of the waste-water pumping station on the fuel docks and of the restrooms in the Ship Store. However, the new Commercial Unit owners changed quite a few things after taking possession of the units. The Commercial Unit owners took action to bar the slip owners from the use of the pumping stations, forced the dock master to vacate the Ship Store where his office had been located, and denied access to the restrooms.  

In response, several individual unit owners filed suit alleging that the Commercial Units were common elements of the HPR and that Developer did not have authority to change that status when it recorded the amendment to the Master Deed. In defense, the Commercial Unit owners argued that the Master Deed gave the Developer unilateral authority to amend the Master Deed and that the HPR waived the right (of all unit owners) to contest the Developer’s action when it acquiesced to the foreclosure proceedings. 

The Court of Appeal focused its holding on its prior ruling in  Vista Del Mar Condo. Ass’n v. Vista Del Mar Condos., LLC, 441 S.C. 223 (Ct App. 2023). In Vista Del Mar, a Developer originally committed a tract of land to a HPR pursuant to a multi-phase development plan. After construction of the initial phase, the Vista Developer changed its plan of development and determined that a portion of the undeveloped property committed to the HPR was no longer necessary to its intentions. The Master Deed had language giving the Vista Developer a unilateral authority to add or remove property from the regime on behalf of itself and as the agent for the individual unit owners.

Unit owners sued the Vista Developer arguing that common elements could not be conveyed. In issuing its opinion, the Court concluded that the Vista Developer had authority to convey the property because the unit owner’s rights in the particular property as common elements had not yet vested in the unimproved portion of the property, because the property was not scheduled to be a common element for recreation and the contemplated construction on the unimproved portion had not been commenced or completed. 

In the current opinion, the Court found that the rights of the slip owners in the common elements at Mariner’s Cay had fully vested. Once the vesting occurred, Developer’s authority to remove common elements ended regardless of the provisions of the Master Deed. The Court ruled that the Master was correct in finding the Commercial Unit owners “wrongfully held title.”

The Court was not impressed with the argument that the HPR’s participation had waived the rights of individual unit owners to contest the transfer of the common elements. The Court ruled that the individual units were not parties to the foreclosure action. Not being parties, they could not be estopped by any failure of the HPR to assert defenses in the foreclosure hearing.  Attorneys that litigate all kinds of cases against HPRs should take heed that the HPR Association does not necessarily have authority to bind individual unit owners.

While this new ruling is confirmation of prior standard concerning the vested rights of unit owners in common elements, practitioners may find that the devil is in the details concerning the point at which such rights vest. The Court was not exceptionally clear in laying out specific for determining whether a right to a common element vests, but it seems that it was important to the Court that the common elements were fully constructed, in active use by the slip owners. Perhaps too that fuel docks and pumping stations and restrooms have more obvious correlation to the expectation of slip owners in a Marina than unimproved property slated for future development might have had to unit owners in Vista Del Mar. Yet another distinction between the two case may have been what seems like much more explicit language in the Vista Del Mar Master Deed concerning the authority of the Developer in adding and subtracting property for use in future phases.

SC Supreme Court Decides Gulfstream Case

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Commercial real estate lawyers know that disputes over parking lot use are common. The long-running legal battle between the owners of Gulfstream Café and Marlin Quay Marina, recently addressed by the Supreme Court, nearly escalated into a literal parking lot showdown given its contentious history.

In 2022, this blog discussed the continuing legal saga in two installments that some of you may wish to check out. A fight over attorney’s fees! Criminal contempt for the malicious parking of a golf cart! The drama!        

To catch readers up to speed: In 1982, Georgetown County approved the Marlin Quay Planned Development, which contained two distinct businesses: the Gulfstream Café and its 17 parking spots; and the Marlin Quay Marina, which consisted of 60 boat slips, a marina store, a restaurant, and 62 parking spaces. 

The businesses operated in seeming harmony for many years. In 1986, the Marina owner even granted Gulfstream a right of ingress/egress over and the non-exclusive use of Marina’s parking lot and parking spaces, which seemed very neighborly indeed.  This easement implied in part: “[i]t is anticipated by the parties that while they will each have joint and non-exclusive use of the area covered by this easement that the Grantor will primarily utilize the premises during the daytime and [Gulfstream] will primarily use these premises in the evening.”

Things went downhill in 2016 when the Marina was sold to a new owner with a different vision for its property. The new owner wished to demolish the existing buildings at the Marina and build a new restaurant and store in its place. Making matters worse for Gulfstream, the new owner also intended on operating the new restaurant in the evenings, created direct competition for customers and for parking spaces at night.

The County Council approved Marina’s request to modify the Planned Development according to this initial set of plans over the objection of Gulfstream. However, the Marina withdrew its petition after it became known that the Marina’s architect, a Georgetown County Council member, failed to recuse himself from the deliberations and vote[1]. 

After the County approved the re-submitted plans, Gulfstream filed suit against the Marina alleging that the proposed expansion of the restaurant violated the terms of its existing easement.  After a full trial, the Circuit Court ruled that the Marina must revise its plan so that it did not exceed the footprint of the existing building with respect to the parking lot if it chose to move forward.

The Marina revised its plans to comply with the Court’s order. It chose to build a bigger vertical space with a larger outside seating area waterside. Gulfstream again objected and maintained that the increased square footage would make the difficult parking situation worse. The County eventually approved the revised plans over Gulfstream’s objection finding that the new construction would be in better condition, bring the Marina into compliance with current building codes, and be a net benefit to tourism and the community over the existing structure. 

Not backing down, Gulfstream then filed suit against the County alleging that it had violated its own parking requirements under the zoning ordinance by approving the new plans. Gulfstream asserted that the County’s approval violated its right to substantive and procedural due process and amounted to a taking of its rights under the easement, all of which substantially diminished the value of its property.   

The case ultimately reached the South Carolina Supreme Court, which found in favor of the County.  The Court agreed that Gulfstream’s easement created a property right, but found that Gulfstream did not have an exclusive right to the use of the Marina’s parking spaces in the evening.  Further, Gulfstream had exactly as many parking spaces available to its customers after the approval of the new plans as it did before. The Court was unconvinced by Gulfstream’s arguments that the approval of the additional square footage of seating had overburdened its easement rights and determined that the County had not deprived Gulfstream of any property interest.

The Court found that the General Assembly had given Counties the option to approve “planned developments” so that they could be flexible in adopting innovative planning solutions for benefit of their local communities.[2] The County complied with all hearing requirements for approving the amendment to the planned development and Gulfstream had a full opportunity to present its opposition to the plan.   Therefore, the County had not violated any substantive or procedural due process right. 

The Court also ruled against Gulfstream on its claim that the County had engaged in a “taking”.  The County had not engaged in a “per se” taking because Gulfstream had not been deprived of all economically or productive use of its easement. Gulfstream still retained the same non-exclusive right it had always enjoyed concerning the  parking spaces in the Court’s view.

Further, the County had not engaged in a regulatory taking under the Penn Central test.[3] The County approved the plans in its estimate of the best interest of the community. The County had not appropriated the parking to its own use. County approval of the plans did not prevent Gulfstream from continuing to do business as before. The Court further rejected Gulfstream’s offered expert testimony that valued the property based on the assumption that Gulfstream did not have any use of the easement parking[4]. Finally, the Court reasoned that because Gulfstream did not have an exclusive right in the use of the parking spaces that the County’s ruling could not have upset any investment backed expectation in the use of the parking spots at night.   

Finally, the Court majority declined to hold that the councilman’s participation in the initial approval of the plans invalidated the subsequent approvals that took place after he recused himself. The majority found the subsequent approvals of the completely revised project by the Council, acting this time with the councilman’s recusal, were sufficient to overcome any impropriety in the first vote. 

The two dissenting Justices, though concurring in ultimate result, were much more skeptical of the councilman’s conduct and made it plain that the Justices believed County made unique concessions in its review of the Marina project.[5] The Court questioned whether the Council had properly re-examined the basis for approving the concessions after the recusal.   

In any event, the legal duel between the restaurants seems to be over for now. The next time you are in Garden City, you may just want to take a fact-finding mission to sample the cuisine. Just be sure to arrive early as you know that the parking may be an issue.

[1] The Court’s opinion tells us that Gulfstream separately filed an ethics complaint that resulted in an official sanction and fine being levied against the council member.

[2] See S.C. Code 6-29-740. 

[3] Penn Central Transport Corp. v City of New York, 438 U.S. 104 (1974).  Some attorneys may vaguely recall from the boring semester of Constitutional Law that under the Penn Central test, a court, in considering whether a state action amounts to a regulatory taking,  must consider 1) the character of the state’s action; 2) the economic impact of the regulation on the claimant; and 3) the extent the regulation interferes with an investment backed expectation. Partial credit to you though if the name seemed familiar! 

[4] The entire Court seemed to find the expert’s testimony as lacking in credibility. The Court characterizes his testimony as indicating that the new Marina restaurant had rendered the Gulfstream property as almost entirely without value.  The expert seems to have bitten off more than he could chew there. 

[5] The dissent seemed especially concerned that the councilman had asked for $72,000 from the Marina as additional compensation for his role in shepherding the matter through County Council.

PASSING IT DOWN:  RECIPES, TRADITIONS AND REAL ESTATE

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Like many of you, Fall is my favorite season of the year. The oppressive heat and humidity is finally starting to temper itself, the kids are back in school, football is being played once again, leaves are changing, and the holiday season is fast approaching. This week, we celebrate Thanksgiving, which just so happens to be my favorite holiday of the year. The Thanksgiving holiday naturally lends itself to so many time-honored traditions. It is a time family and friends gather to reflect on the important things in their lives and to overindulge in so many wonderful dishes.

The passing down of recipes through generations drew my mind to how real property is also passed from one generation to another. Ideally, property owners would properly plan for an orderly transfer of property through sound estate planning. Most wills express the testator’s intentions as to real property and grant the personal representative the power to effectuate the transfer. Other times, the will grants the personal representative the power to sell the property, creating a fiduciary duty to properly disburse the proceeds from that sale.

Under South Carolina Probate Code §62-3-711(c) a personal representative who has the power to sell pursuant to the decedent’s will may execute a deed in favor of a purchaser for value. This power is subject to §62-3-713, which prohibits transfers to the personal representative or certain related individuals or entities unless the will or a contract or court order authorizes the transaction. Pursuant to §62-3-910(B), a purchaser for value from a personal representative takes title free of heirs or other interested parties.

In the context of title insurance and in circumstances where either a will does not specifically grant a personal representative the power to sell real property or when a probate estate is opened in the absence of a will of a property owner, an Order from the Probate Court authorizing the personal representative to sell the subject property would be required to insure without taking exception to the possible interest of heirs or other interested parties.

Often times though, a property owner dies without leaving a will. Absent a proper directive from the decedent, one would turn to the laws of intestate succession, which can be found in the S.C. Probate Code at §62-1-101, et seq.  The law of intestate succession dictates how a person’s property is distributed by making the assumption that the decedent would want the property to go to the decedent’s closest relatives. 

Testate and intestate succession laws can sometimes get confusing.  However, whenever there is a doubt about the proper way to insure a transaction there is always a common correct answer: contact your title insurance underwriter.

This blog post began by reflecting on the changing of the seasons and the approach of the Thanksgiving Holiday. Appropriately, this is the perfect time to remember the many blessings in our lives. Perhaps more than any other time in the calendar year, Thanksgiving provides the opportunity to honor old traditions, create new ones and remember those that have passed on before us. May each of you enjoy time with family and friends and have an opportunity to reflect on those blessings and why they are so meaningful.

In the spirit of succession, having been born and raised in coastal South Carolina, I would like to share one of my favorite Thanksgiving recipes that has been passed down through my mother’s side of the family.  Happy Thanksgiving, everyone!

Oyster Cornbread Dressing

INGREDIENTS

  • 2 lb. unsweetened cornbread, cut into 1/2-inch cubes (about 12 cups)
  • 3/4 cup melted unsalted butter (1 1/2 sticks)
  • 5 tbsp. unsalted butter
  • 2 cups chopped onions (about 2 medium onions)
  • 1 1/2 cups chopped celery (about 3 ribs)
  • 2 cloves garlic, finely minced
  • 6 oz. country ham (the saltier the better), finely diced
  • 2 tbsp. chopped fresh sage leaves
  • 2 tsp. fresh thyme
  • 1 1/2 tsp. sea salt
  • 1 tsp. ground black pepper
  • 1/2 tsp. ground nutmeg
  • About 18 to 20 freshly shucked oysters, roughly chopped with liquor reserved
  • 1 cup chicken broth
  • 3/4 cup milk
  • 3 large eggs, lightly beaten
  • A few more tsp. unsalted butter

PREPARATION

  1. Heat oven to 400°F.
  2. Toss cornbread cubes with melted butter and lay out flat on a baking sheet, crumbs and all. Bake in the oven, stirring occasionally, for 30 minutes or until a nice toasty color forms on the cornbread.
  3. Meanwhile, melt the 5 tablespoons of butter in a large skillet over low to moderate heat. Stirring occasionally, sauté the onions, celery, and garlic until the onions are translucent, about 6 minutes.
  4. Transfer the cooked vegetables to a large bowl and add the toasted cornbread, tossing gently to mix. Add the ham, herbs and spices, and oysters with reserved oyster liquor, and mix with a rubber spatula.
  5. Warm the chicken broth and the milk together in a small pot just until simmering. Drizzle over dressing mixture and fold in. Fold in eggs.
  6. Lightly butter a 9-by-13-inch baking dish. Transfer the dressing into the baking dish and dot with a few teaspoons of butter. (The bread crumbs should be loosely stacked, not packed down tight.)
  7. Turn the oven down to 350ºF. Bake in the oven until the edges and the top are browned, about 30 to 40 minutes, keeping the pan covered with foil for the first half of the baking time. Serve hot out of the oven.

    Haunted Houses and Legal Horrors: The Ghostbusters Case That Shook Real Estate Law

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    As Halloween creeps in with its ghoulish charm, it’s the perfect time to revisit one of the eeriest and most entertaining legal decisions (and my personal favorite) in real estate history: Stambovsky v. Ackley, better known as the “Ghostbusters” case. This 1991 New York appellate decision, with it’s dad-humor level puns and references, didn’t just acknowledge the supernatural: it made it legally binding! And for those in real estate law and title insurance, it’s a chilling reminder that what lurks in the shadows might just haunt your contracts.

    The story begins in Nyack, New York, where Helen Ackley owned a charming Victorian home with a not-so-charming reputation. Over the years, Ackley had publicly described the house as haunted, recounting ghostly encounters in Reader’s Digest, local newspapers, and the house was even included in walking haunted house tours. Ackley claimed the spirits were friendly—playful poltergeists who left gifts and woke her grandchildren with ghostly shakes.

    Enter Jeffrey Stambovsky, a New York City resident who agreed to buy the home, but was unaware of its spectral fame. Upon hearing about its haunted reputation, he sought to rescind the contract, arguing that Ackley’s failure to disclose the home’s paranormal notoriety materially impacted its value.

    The New York Supreme Court, Appellate Division, sided with Stambovsky in a decision that has since become legendary. With perhaps one of the greatest single lines in an opinion, the court held that:  “As a matter of law, the house is haunted.”  Ackley was estopped from denying the haunting because she had repeatedly and publicly affirmed it. The court emphasized that while New York generally follows caveat emptor (“let the buyer beware”), this case warranted an exception. The haunting was not something a buyer could “reasonably discover” through standard due diligence or inspection.

    While this case is from New York and is a pretty extreme example, it does raise some important questions for transactions in other states as well, even if the facts may not be exactly on point:

    1. Disclosure Duties Can Be Contextual

    While most jurisdictions don’t require sellers to disclose ghostly activity, material facts that affect a property’s value or desirability, especially if they’re publicly known, may need to be disclosed. In this case, the haunting wasn’t just folklore; it was part of the home’s local identity.  For example, in SC, a seller does not have to disclose if someone has died in the property up front, but they do have to answer honestly if specifically asked the question.

    2. Equitable Estoppel Has Teeth

    Ackley’s own statements came back to haunt her. Because she had repeatedly affirmed the haunting, she couldn’t later deny it to avoid legal consequences. This principle can apply to other types of representations whether about property condition, zoning, or history. 

    3. Buyer Beware Isn’t Absolute

    Even in caveat emptor states, courts may intervene when fairness demands it. If a seller knows something that a buyer couldn’t reasonably discover, and that information materially affects the transaction, silence may not be golden, but grounds for rescission.

    From a title insurance perspective, the Ghostbusters case raises intriguing questions. Can we remove the “parties in possession” exception if the property is also occupied by ghosts?  While I’m fairly certain ghosts wouldn’t have legal rights of possession, how would one go about evicting them in the first place?  Title insurance typically covers defects in title, not defects in reputation. Paranormal activity doesn’t cloud title, but it can cloud marketability.

    Most policies include coverage for marketability of title in regards to title defects, which courts have interpreted to mean that a property must be free from legal or practical issues that would prevent a reasonable buyer from purchasing it. While ghosts don’t affect legal ownership, a well-publicized haunting might affect marketability, especially if it leads to litigation or public stigma. 

    For a more realistic example, think Breaking Bad instead of Ghostbusters.  Some county sheriff departments will record a notice of clandestine laboratory when a meth lab is discovered on the property.  While a history of use for cooking meth doesn’t affect title, it can definitely affect someone’s willingness to buy the property.  This particular issue arose in a potential claim at a previous employment stop.  The company wasn’t sure it was a covered claim because notice of a prior criminal activity didn’t affect the title to the property.  The insured’s argument was that it was recorded in the records and, even though the properly had been fully remediated, the notice had already caused one contract to fall through and was affecting the insured’s ability to market and sell it.  Unfortunately, I moved to my current position and don’t know how that claim turned out.

    While title insurance is mainly concerned with matters in the public records that affect title, sometimes the risk assessment does factor in other information.  Title agents/insurers should be aware of Public representations made by sellers; Local folklore or media coverage that could affect a property’s reputation; or Claims or disputes that might arise from non-physical defects.  Whether you’re a broker, attorney, or title insurer, the Ghostbusters case offers some hauntingly good advice:

    • Ask about unusual property history—especially if the home has been in the news for any reason, but especially if it has been included on recent ghost tours.
    • Advise sellers to disclose reputational issues that could affect buyer perception.
    • Review local laws on disclosure obligations, especially regarding stigmatized properties (e.g., those associated with death, crime, or paranormal activity).
    • Consider adding disclaimers in contracts for properties with unusual histories.

    Finally, this case reminds us that real estate law isn’t just about bricks and deeds; it’s also about stories, reputations, and sometimes, ghosts. As Halloween approaches, let this case be a playful but powerful reminder: in real estate, what you don’t disclose might come back to haunt you.

    Whether you’re selling a haunted mansion or a humble bungalow, remember: the law sees more than meets the eye, and sometimes, it sees ghosts.

    SC Supreme Court clarifies realtor liability under Disclosure Act

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    Call me a little strange, but I am always interested to read about real estate contract disputes. An odd fact of my career is that my trial history is bookended by Magistrate Court-level trials involving real estate contract disputes. The first was a seriously thrilling fight (to a baby lawyer) over $1500 in earnest money on a flat fee that certainly did not reflect the legal hours expended. My final was in defense of a client’s failure to disclose “mold” around a leaky water heater. For the record, I am undefeated in Magistrate’s Court, despite it being the only Court a judge has ever demanded I produce my bar card. I was wearing a suit and had a briefcase and everything!   

    The Supreme Court recently issued an opinion that may be interesting to real estate attorneys and litigators concerning the liability of real estate agents. The Court’s opinion in Isaacs v Onions held that there is no right of private action against a seller’s real estate agent under the South Carolina Residential Property Condition Disclosure Act for the seller’s failure to disclose a property defect. The Court also made a finding that the buyer could not have reasonably relied upon general statements made by the seller’s agent concerning the findings of a prior CL-100. 

    The facts of the case were as follows: The Onionses (“Sellers”) listed their home in Litchfield Plantation with the Selling Agent (“Agent”), and filled out a Residential Property Condition Disclosure denying any “present wood problems caused by termites, insects, wood destroying organisms, dry rot[,] or fungus.” The property was listed and promptly came under contract. During the course of the due diligence, the first contract buyers obtained an inspection report revealing the absence of a vapor barrier in the crawl space in some areas and noted damp soil conditions. That report recommended further inspection.

    In response to the buyers’ inspection, the Oniones retained a pest control company to inspect the crawlspace.  The company issued a report finding elevated moisture readings, wood destroying fungi, and some moisture damage. They recommended installation of vapor barrier, a dehumidifier, and coverage of the outside vents, and treatment for mold, for an estimate of $4,595.00. Instead, the Sellers retained a handyman to address the vapor barrier, replace insulation, remove debris, and install a crawl space fan for $706.00. The first buyers had separately commissioned a CL-100 which showed lesser moisture readings, no active wood destroying fungi, but recommended a fan.

    The first contract ultimately fell through, the property was re-listed, and the Isaacs became interest in the property ultimately entering into a contract to purchase it. Early in the transaction, Agent provided copies of the Property Condition Disclosure Form, the prior inspection reports, disclosed the scope of repairs.  Agent sent an email to the Isaacs sharing that the first buyers “CL-100 was done yesterday and from what I understood it was good, but I can obtain the report if/when necessary as the sellers paid for it.”  

    The Isaacs declined to request a copy of the prior CL-100 as they intended to commission their own CL-100. The Isaac’s CL-100 revealed significantly diminished moisture levels and no evidence of any issues.  The Isaacs proceeded to closing.

    Two days after closing, the crawl space flooded after heavy rains.  A week later inspection reports revealed standing water, very high moisture readings, and active fungi. The Isaacs filed suit against the Sellers, Agent, and their CL-100 inspector. They specifically alleged fraud and misrepresentation against Agent, as well as violations with regard to misinformation on the Property Condition Disclosure Form.

    The Court found that while the South Carolina Residential Property Condition Disclosure Act creates a private right of action against the sellers for violations, it does not create a private right of action against real estate agents. The Court pointed out that there would be other causes of action available to the buyer in that situation.

    The Court also noted that the Isaacs had been provided reports that provided ample evidence of a possible issue in the crawl space and that the real estate agent’s statement that she had heard that the CL-100 was “good” could not have been something that the Isaacs reasonably relied upon in their decision to purchase the home. In fact, the Isaacs testified that they did not request the prior CL-100 because they intended to obtain their own. 

    The Court’s ruling seems to resolve (for now) that real estate agents are not subject to suit under the Act and that vaguely encouraging comments from selling agents are not to be relied upon by buyers, particularly when there is evidence of potential issues with the property. Perhaps the Isaacs faired better against the Sellers in this action on better facts.

    It’s the little things

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    Most real estate practitioners can relate to the experience of getting that call or email from a real estate agent, saying that a nice little deal is coming our way. The buyer and seller have already signed a contract and set a closing date. There may be some “little issues” that will need to be worked out before closing, but that should not be a problem. Right?

    Often, a lawyer has been involved in preparing the contract or advising the parties before that call comes in. As often as not, those “little issues” turn out to be significant, and some can even derail a closing and pit the seller and purchaser against each other. The South Carolina Court of Appeals recently issued its opinion in the case of Anderson v. Pearson, Appellate Case 2023-001897 (Ct. App., 2025) discussing a case where there were, in fact, some big issues. We are left to wonder how different the outcome might have been if an attorney had been consulted in drafting the contract and advising the parties as to its terms.

    The basic facts of the case are that Pearson (together with some family members) owned acreage in Spartanburg County, on Lake Cooley. This consisted of one parcel which Anderson agreed to buy (and which the parties chose to refer to as the “twenty-acre parcel”), as well as another nine-acre parcel next to it. Anderson (who owned property adjacent to Pearson’s) and Pearson, communicating through a broker, negotiated and agreed to some basic contract terms including a purchase price and closing date. Other details, such as whether the property was to be defined in a new survey, and whose responsibility it would be to get a survey, were not included in the contract. The contract was, however, clear on the inclusion of a “time is of the essence”, merger, and non-reliance clauses. The contract included the (not very helpful) comment that “[b]rokers recommend Buyer have Property surveyed . .  .”

    After depositing her earnest money, the record indicates that Anderson continued to communicate with Pearson via the broker, and that Pearson indicated multiple times that he was obtaining a survey of the 20 acres in order to address the placement of an access route that would be needed to get to and from the nine-acre parcel which he was not selling. Communications went back and forth for some time, with Pearson never providing a copy of the survey, and Anderson continuing to ask for updates. Pearson applied for mortgage financing through AgSouth, but the record indicates that she had not provided all the items (such as a title commitment or a survey) that AgSouth would require to make the loan.  Eventually, the contract closing date came and went. The broker told Anderson that Pearson was not returning her calls or texts. Eventually, several weeks later, Pearson told the broker “We are building on the property ourself. We no longer want to sell.”  Turns out the Pearsons had actually gotten a survey but chose not to share it with Anderson. And the Pearsons had determined that they could sell the property to a developer for more than twice what Anderson had agreed to pay.

    Some months later, Anderson filed suit for specific performance. At summary judgment, the Master in Equity conducted a trial and entered a judgment granting Anderson’s request for specific performance. Anderson offered evidence at trial concerning communications about the survey, which were not reflected in the written contract. A significant ruling by the Master in reaching her decision was that Pearson should be equitably estopped from asserting the Statute of Frauds to exclude Anderson’s evidence of those communications. Pearson appealed, raising several issues on appeal.

    The Court of Appeals reversed the Master’s order, focusing on the Master’s application of the Statute of Frauds and equitable estoppel. Ultimately, the Court of Appeals found that Anderson’s reliance on Pearson’s communications was not reasonable. The Court of Appeals believed that Anderson should have realized that Pearson was delaying, and gotten her own survey. Additionally, the Court of Appeals expressed its view that Anderson did not change her position in reliance on Pearson’s communications about the survey, and since detrimental reliance is an element of equitable estoppel, the Court of Appeals held the Master erred in finding that equitable estoppel should apply to Pearson in his assertion of the Statute of Frauds.

    As additional grounds, the Court of Appeals opined that since the contract did not require Pearson to provide a survey, the merger and non-reliance clauses weighed in Pearson’s favor on that point. The Court of Appeals proposed that the Master should have applied the parol evidence rule to Anderson’s offer of communications outside the contract itself. Further, the “time of the essence” clause, in the Court of Appeals’ view, meant that since the contract had expired by its own terms, and Anderson had not demonstrated that she had been able to timely perform her obligations under the contract (i.e. she did not show that she had the cash ready to pay the purchase price) specific performance was not available as a remedy. 

    This case may be a good example to mention to real estate agents and brokers (as well as clients) to demonstrate the value of a clearly drafted contract and of legal advice from a seasoned real estate attorney as to contract terms.

    Dockside Condominium Evacuation in Charleston

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    Photo courtesy of Homes.com

    You will likely recall the tragic collapse of Champlain Towers South, a beachfront condominium near Miami, which resulted in the deaths of 98 people in June 2021. It now appears we may have had a near miss close to home.

    Residents of The Dockside Condominiums, a 19-story tower on the Cooper River in downtown Charleston, faced unexpected upheaval when Charleston building officials ordered the evacuation of the building.  The officials deemed the structure, Charleston’s tallest building other than a church steeple, unsafe for occupation following the alarming findings of an engineering firm.

    It began in 2022 with the renovation of a single unit in the building. During the course of that renovation, the unit owner’s engineers identified problems with the connection between the concrete columns and the floor slab of the unit. The problems seemed to be defects in the original construction of the building during the 1970s rather than the type of gradual deterioration that caused the Miami building’s collapse.  

    The unit owner reported the findings to the Dockside Association, which in turn engaged an engineering firm to conduct a comprehensive assessment of the building. On February 25, the engineering firm reported to the Association that the building is “overstressed” and unsafe for continued occupancy. The report summary indicates that there is the potential for the concrete columns supporting the building to punch through floor slabs—a critical structural flaw. 

    Charleston’s Chief Building Official, after reviewing the report, issued an mandatory evacuation order on February 27, requiring that all residents vacate the premises by 5 p.m. the next day. Residents were initially advised to take perishable items but leave all furniture behind. The sudden displacement left many residents of the 112 units scrambling for temporary housing without any certainty about the length of the displacement. 

    As of now, it is unclear what is the next for the Dockside owners. Additional investigation has suggested that the possible collapse of the building will not bring down neighboring structures, but it is not clear whether Dockside can be repaired or what the potential timeline for necessary repairs might be. Building officials have set forth a framework authorizing Dockside residents to remove their remaining personal possession from their units, but only four units at a time may be entered and the units have to be located on opposite sides of the structure to minimize risk of collapse.

    This situation underscores the critical importance of regular structural assessments for aging buildings, especially in coastal areas where environmental factors can accelerate structural deterioration. 

    I am interested to see whether this evacuation raises the awareness of Associations as to the general issue and prompts immediate structural and safety reviews for similar structures. It will be interesting too to see what legal recourse the displaced residents may have — especially in the event that experts determine the building is unsalvageable. The issue raises concerns about the disclosure responsibilities of sellers, and how buyers’ counsel should inform their clients of risks while insulating themselves from professional liability. 

    For your holiday reading pleasure … here’s another drafting nightmare case, dirt lawyers

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    South Carolina’s Supreme Court has invalidated an arbitration agreement in a residential home purchase contract because of a sentence found to run afoul of public policy*. The homebuyers are free to pursue their lawsuit against the home builder.

    Amanda and Jay Huskins bought a house from Mungo Homes. The arbitration section in the purchase contract included this sentence:

    “Each and every demand for arbitration shall be made within ninety (90) days after the claim, dispute or other matter in question has arisen, except that any claim, dispute or matter in question not asserted within said time periods shall be deem waived and forever barred.”

    The Court held that it is undisputed that this clause shortened the statute of limitations for any claim to the ninety-day period. Mungo conceded that this provision ran afoul of South Carolina Code §15-3-140 (2005), which forbids and renders void contract clauses attempting to shorten the legal statute of limitations.

    The Huskins brought this lawsuit against Mungo, raising various claims related to the sale. Mungo asked the Circuit Court to dismiss the complaint and compel arbitration. The Huskins countered that the arbitration clause was unconscionable and unenforceable and the lower court granted the motion to compel arbitration. The Court of Appeals held the clause was unconscionable and unenforceable but ruled the clause could be severed from the rest of the arbitration agreement and affirmed the order compelling arbitration.

    The Supreme Court stated that the better view is that the clause is unenforceable because it is void and illegal as a matter of public policy. The Court further noted that the contract contained no severability provision and that Mungo’s “manipulative skirting of South Carolina public policy goes to the core of the arbitration agreement and weighs heavily against severance.”

    The Court mused that it has been steadfast in protecting home buyers from unscrupulous and overreaching terms, and stated that applying severance here would erode laudable public policy. The Court, therefore, declined to sever the unconscionable provision for public policy reasons. The entire arbitration provision was held to be unenforceable. The case was remanded to the Circuit Court for further action.

    Drafting contracts for corporate clients can be tricky, dirt lawyers. Read this case and similar cases carefully!

    *Huskins v. Mungo Homes, LLC, South Carolina Supreme Court Opinion 28245 (December 11, 2024).

    Charleston County finally agrees to implement an e-filing system

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    For many years, Charleston County’s Register of Deeds Office has refused to join the growing list of South Carolina counties that offer electronic filing for land records. Dirt lawyers have scratched their heads wondering when this large county will implement a system that has proved in other counties to be efficient and economically advantageous.

    Finally, Charleston ROD has announced that it has entered into a contract with a vendor to implement an electronic filing system. Initial projections are that the new system will be in place in late 2025.

    Charleston has also announced that it will provide property owners the opportunity to sign up for fraud prevention services that will notify owner of any filings that may affect their properties. Similar services have been offered by national companies at a price. Other counties in South Carolina have offered similar services free of charge.

    Register of Deeds Karen Hollings said in a press release that the electronic filing system will make the Register of Deeds office better organized and more efficient for the people of Charleston County.

    Merry Christmas to all!