South Carolina

Sullivan’s Island, Fractional Ownership, and the Limits of Zoning Law

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We all know that South Carolina has some of the most beautiful natural scenery in the nation.  As the weather gradually improves, and with Spring Break underway for many and the summer rental season right around the corner, tourists begin flocking to our beautiful beaches.

In February 2026, a legal dispute[1] on Sullivan’s Island quietly reshaped the conversation around property rights, zoning enforcement, and the future of residential ownership models in South Carolina’s coastal communities. At the center of the case was 2 SC Lighthouse, LLC, a property owner, and Pacaso, Inc., a company that facilitates fractional homeownership. On the other side stood the Town of Sullivan’s Island, determined to enforce its long‑standing restrictions on short‑term rentals.  While the case involved a single property, its implications reach far beyond one address.

Sullivan’s Island has long maintained strict zoning rules designed to preserve its residential character. Among those rules are limits on short‑term vacation rentals, which town officials argue can disrupt neighborhoods and strain local infrastructure. As new real estate models have emerged, the town has taken a close look at how these arrangements fit within existing ordinances.

That scrutiny intensified when a home owned by 2 SC Lighthouse, LLC was used in partnership with Pacaso. Pacaso’s model allows multiple buyers to purchase fractional ownership interests (in this instance, one‑eighth shares) in a single property. Each owner receives scheduled access throughout the year, and Pacaso manages maintenance and logistics. However, unlike a true rental property, occupants do not pay nightly or weekly fees to stay in the home; they are staying in a property they legally own.

Town officials concluded that the arrangement functioned like a vacation rental in practice, even if it was structured differently on paper. The Town’s Zoning Administrator issued a violation, asserting that the property was being used as a prohibited short‑term rental under Sullivan’s Island zoning laws. That decision was upheld by the Town’s Board of Zoning Appeals (BZA).

2 SC Lighthouse and Pacaso appealed to the Charleston County Circuit Court. The court sided with the Town, effectively agreeing that the zoning authorities’ interpretation of the ordinance should stand.

The property owner and Pacaso appealed, arguing that a fractional ownership is not a rental, and that the Town was stretching the definition of “short‑term rental” beyond what its ordinance actually said.

On February 18, 2026, the South Carolina Court of Appeals reversed the circuit court’s decision, siding with 2 SC Lighthouse and Pacaso. The ruling turned on the critical distinction between ownership and renting. The court emphasized that the individuals staying in the home were owners, not tenants. Without a rental transaction (no landlord‑tenant relationship and no payment for temporary lodging), the court found that the town’s definition of a short‑term rental did not apply.

In making its ruling, the court clarified that interpreting a zoning ordinance is a question of law rather than a factual determination entitled to broad deference. While zoning boards are given leeway in applying ordinances, they cannot rewrite or expand those ordinances. If a municipality wants to regulate fractional ownership, it must do so explicitly.

Although the ruling is an unpublished opinion and is not binding precedent, its practical impact is significant. For Sullivan’s Island, the decision places limits on enforcement under current zoning language. The town may still regulate short‑term rentals aggressively, but it cannot treat fractional ownership arrangements as rentals unless its ordinances are amended to say so.

For other South Carolina coastal communities, the case serves as a warning and a roadmap. Many towns face similar tensions between preserving neighborhood character and responding to evolving real estate practices. The decision signals that courts will closely scrutinize attempts to regulate new ownership models using old definitions.

For property owners, the ruling reinforces a core principle of land‑use law: property rights cannot be curtailed by implication. Restrictions must be clearly stated, not inferred based on policy concerns alone.

The decision does not end the debate over fractional ownership on Sullivan’s Island or elsewhere. Municipalities may respond by revising zoning ordinances to directly address co‑ownership models. Developers and property owners, meanwhile, will likely continue testing the boundaries of traditional zoning frameworks.

This case highlights the broader reality that zoning laws written decades ago are being asked to govern a rapidly changing housing market. As ownership models evolve, so too must the rules that regulate them—through legislation, not interpretation.

For now, 2 SC Lighthouse, LLC’s victory stands as a reminder that in land‑use law, words matter, and towns must play by the rules they have written.

[1] Pacaso, Inc. & 2 SC Lighthouse, LLC v. Town of Sullivan’s Island, South Carolina, Appellate Case No. 2024‑000134, 2026‑UP‑078 (S.C. Ct. App. Feb. 18, 2026) (unpublished).

At long last, a resolution for Captain Sam’s Spit?

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Another long‑running legal battle in South Carolina – this time over the future of Captain Sam’s Spit – may finally be drawing to a close. Developer Kiawah Partners, the Town of Kiawah Island, and several other interested parties entered into a $37 million settlement at the beginning of March that would transfer the entirety of the 170 acres of pristine coastline to the State of South Carolina and other local entities subject to a permanent conservation easement.

This blog has covered the unfolding controversy involving the Spit several times in the past. The Spit, which lay seaward of the DHEC critical line when originally conveyed in the 1980s, became the subject of numerous lawsuits after an adjustment of the critical line in the 1990s made the property developable. Following that adjustment, Kiawah Partners and the Town of Kiawah entered into a Development Agreement under which the developer planned to build more than 50 homes on certain highland areas of the Spit, while conveying and committing the remaining portions to be preserved in their natural state. However, in a series of lawsuits, appellate courts ultimately denied all the various applications to construct erosion‑control devices deemed necessary to support the proposed development plan.

Kiawah Partners has since pursued a pending lawsuit seeking compensation for what it views as a regulatory taking of its property rights, while the Town and local conservation groups have filed a separate action seeking to enforce the Development Agreement’s provisions concerning the preservation of the remainder of the land. The current settlement resolves both lawsuits.

Under the terms of the settlement, the State of South Carolina and the other participating groups agree to purchase the developer’s entire interest in the Spit for $37 million. The Spit would then be jointly managed by the State and local entities. Beachwalker Park, a popular destination for local beachgoers, is to be transferred to the Town of Kiawah Island and will remain open to the public under the management of Charleston County.

The settlement is contingent upon the General Assembly approving the State’s $32 million contribution, which may occur before the end of the current legislative session. If lawmakers do not balk, Captain Sam’s Spit will be permanently conserved for the enjoyment of the public—and for the 18 endangered species that call the area home.

To reside or not to reside, that is the question

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I struggle to think of any aspect of real estate ownership that stirs up stronger feelings than the Homeowner’s Associations (“HOAs”) and Covenants, Conditions, and Restrictions (“CCRs”). For many buyers, HOA governance signals stability. Communities governed by restrictive covenants often promise consistent architectural standards, minimum maintenance standards, access to common areas, and protection of long-term property values. From a real estate professional’s perspective, that predictability can be a strong selling point. Buyers frequently ask whether a neighborhood has an HOA, and in many markets, that answer affects both demand and price.

However, HOAs are not universally viewed as beneficial. Besides the financial impact of paying HOA dues, restrictions on property use can feel limiting, especially when buyers discover that “residential purposes” or architectural controls mean more than they expected. Disputes over enforcement can create tension within communities and occasionally result in litigation. For agents and brokers, misunderstandings about HOA authority can lead to unhappy clients long after closing.

When I was in private practice, I made sure to make my buyer clients aware of any restrictions that had been placed on the property they were buying. While most buyers understood the purpose of HOAs and that there would be general limitations on how they used their property, occasionally I would have a buyer reach out to make sure a particular use wasn’t prohibited before they went under contract. For example, one buyer was a dog breeder, so the client needed to make sure multiple dogs would be allowed. We reviewed several sets of restrictions for various properties before we finally found a neighborhood that would allow more than 2-3 dogs at one time. 

On the non-transactional side of my practice, I handled several cases representing homeowners in disputes with their HOAs.  In SC, the deck is usually stacked in favor of the HOA in disputes, so an overzealous HOA board member or homeowner can use the covenants to make life miserable for their neighbors. In each of the cases I handled, the main issue came down to personal disputes between various personalities spilling over into the “covenant enforcement” arena.  One of my HOA cases essentially came down to one neighbor having a problem with blue-collar workers being able to afford a home in his upscale neighborhood. He filed repeated complaints against my client that were highly embellished while ignoring similar code issues on other nearby properties.  Eventually, we were able to demonstrate to the HOA board that the complaints were more about harassing my client than enforcement of the covenants, and the board agreed to not pursue their enforcement action. 

A recent South Carolina Court of Appeals decision, Hoffman v. Saad Holdings, LLC1[1], provides another example of tension between neighbors spilling into a covenant enforcement action. The parties to the litigation are property owners within a residential subdivision on Lake Hartwell in upstate South Carolina. The CCRs for the subdivision contained a use restriction that “No lot shall be used for other than residential purposes.”  A subsequent amendment placed building setback lines for each lot as well. 

Saad Holdings, LLC (“Saad”) purchased lots in the subdivision, but the shape of these particular lots made building a residence in compliance nearly impossible.  However, Saad obtained permits to construct two docks on the lake and then ran electric and water lines across the lots to the docks. Saad also used the lots to access the docks by foot. 

A group of homeowners (“Homeowners”) alleged that Saad was putting its properties to “recreational” use, which violated the CCRs restriction to use of the property for “residential purposes.” The homeowners sought an injunction against Saad using these lots to access the docks. In response, Saad argued that the lots were used for access to the docks, not recreation.  Saad further argued that the Homeowners interpretation of the CCRs would harm Saad more than it would actually benefit the Homeowners. 

Homeowners argued that picnics, camping, or even birdwatching on Saad’s lots were all prohibited by the CCRs.  Homeowners further argued that Saad’s lots could not be put to any use at all except accessing the lots to maintain them.  While the court didn’t opine on this argument, it seems awfully convenient that Homeowners were in favor of Saad maintaining the lots at the neighborhood standard, for their own benefit, but opposed any use that would benefit Saad. 

The Court begins its analysis by noting that CCRs are contractual in nature, but that South Carolina law favors the unrestricted use of property. The Court states that when there are two equally capable interpretations for a restriction, the one that is least restrictive should be adopted. 

In discussing the distinction between “residential” and “recreational” use, the Court notes that previous South Carolina cases have centered on the distinction between residential and commercial or business uses. 

Expanding its search beyond South Carolina, the Court found a set of similar facts in the North Carolina case Villazon v. Osborne[2].  In Villazon, the property owner used her lake front lot to store kayaks and hold the occasional cook out.  The Villazon court found that nothing in the subject CCRs required habitation in order to qualify as “residential use.” Since the Villazon interpretation of residential use was equally applicable and less restrictive than the interpretation proposed by Homeowners, the Court affirmed the trial court’s decision denying the injunction sought by Homeowners.

In my personal life, I have only purchased houses in neighborhoods with CCRs and HOAs, so I do not intend to scare anyone away from buying property in an HOA neighborhood. However, the Hoffman case highlights the importance of knowing what activities may be allowed or prohibited before buying a piece of property.  Had the Court ruled in favor of Homeowners, Saad’s property values would have decreased significantly and perhaps become worthless.  After my experience dealing with HOAs as an attorney, I do appreciate a case where common sense prevails.     

[1]Hoffman v. Saad Holdings, LLC, Op. No. 2026-UP-___ (S.C. Ct. App. Feb. 18, 2026) (unpublished)

[2]Villazon v. Osborne, 922 S.E.2d 498 (N.C. Ct. App. 2025)

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.