Chicago Title

No horsing around with HOA disputes

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Real estate practitioners will not be surprised to hear that neighbors in a well-to-do development with a significant set of covenants and shared easements will sometimes disagree (and even litigate) about how those easements ought to apply to their properties. Our Court of Appeals recently had occasion to hear an appeal related to covenants and easements in an equestrian subdivision in Aiken County, in the case of Richard Viviano v. Fulton Jeffers and Braeloch I Association, Inc., Appellate Case No. 2024-000147, Ct. App., Opinion No. 6120, Filed August 20, 2025.

The underlying dispute in the case concerned an established equestrian community near Aiken named Braeloch. Braeloch has extensive pedestrian and riding trails, and when the subdivision was originally planned, one trail extended all the way around the outer boundaries of the subdivision. The recorded covenants included easements encumbering all the lots around the subdivision’s exterior boundary to account for this trail. The trail easement was also shown on the recorded subdivision plat. Later (in 2002) an additional lot was added (Lot 51) and eventually became the center of a dispute involving Lot 51’s owner, the homeowners association, and the owners of two adjacent existing lots. The neighboring lot owners and Lot 51’s owner disagreed about how the riding trail should be adjusted or relocated in light of Lot 51’s addition. Mr. Viviano was one of those neighboring lot owners. The Court of Appeals opinion implies that personalities clashed, and that the neighboring lot owners questioned the motivation and personal friendships of the HOA officers in making decisions about Lot 51 and the trail. Unfortunately, the parties could not agree at this point, and litigation was filed.      

The main issue presented to the Court of Appeals here, which may be less interesting to real estate practitioners, concerned whether a settlement agreement that the parties signed at the conclusion of mediation would be enforceable. (Spoiler alert: The Court of Appeals said, Yes, it is enforceable.) At the trial court level, the parties had mediated the case and reached a written agreement. The agreement was broad and addressed all the issues in dispute between the parties: relocation of the riding path easement, who would pay to make improvements to the path, compensation to the impacted lot owners, that the parties would sign a mutual non-disparagement agreement, etc. It required formal approval by the full HOA of a few items that the HOA representatives agreed to in mediation; the HOA formally voted and approved those after the fact.

As a worthwhile aside, the mediator (retired Judge Thomas Cooper, Jr.) made a lovely allusion to Aristotle (or the movie “Legally Blonde,” depending on your point of view) when he noted in his mediation report that the attorneys and parties had wisely “recogni[zed] . . . that emotion has to give way to reason to resolve difficult disputes.” We can all benefit from remembering that “law is reason, free from passion.”  

Later, several months after mediation, Mr. Viviano seemed to have regretted the agreement and changed his mind. A couple of the details that he asked the court to consider in support of his motion might be of more interest to dirt lawyers.

Viviano’s argument was basically that the 2002 petition to amend the covenants and easements to add Lot 51 was not valid because it did not have the support of the required number of lot owners. Viviano also argued that there was a “smoking gun” email from the owners’ association acknowledging that they did not have enough signatures on the petition to add Lot 51, and he claimed that this email had been deliberately concealed from him. (He argued that he would not have signed the settlement if he had known about it.) The Court of Appeals found this argument meritless. Without getting into the details of whether or not the Lot 51 admission had been completed correctly, the court pointed out that the Lot 51 admission documents were filed in the Aiken County public records, and therefore available to anyone to review. Viviano’s own complaint in the underlying suit had made an allegation of fact that Lot 51 had been admitted with two thirds vote of the HOA members. The court also noted that Viviano had access to the HOA email acknowledging insufficient signatures on the petition, as it had been produced in discovery more than 2 years prior to mediation, so it was not “concealed” from him. The Court of Appeals also cited established caselaw reinforcing the principle that, once the parties have reached a written settlement agreement, the courts are not inclined to entertain arguments by one party who regrets having agreed to the settlement.   

For those real estate practitioners who represent HOAs, this case might be a good opportunity to remind your association clients about the importance of having counsel assist in the process of amending CCRs. Having an attorney guide an association through the complicated formalities of submitting petitions, calling meetings, sending notices, and being sure to obtain the required number of signatures/votes to amend could avoid costly litigation in the long run! For practitioners who review title and handle real estate closings (and prepare title commitments and policies!), this is also a good reminder to be on the lookout for recorded amendments to covenants, and to carefully review those to determine how they affect the title.          

FNF challenges FinCEN Rule and ALTA concurs

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In our previous blog entry, Jennifer Stone did a great job of summarizing FinCEN’s new Anti-Money Laundering Rule that is scheduled to go into effect as of December 1, 2025. In short, the Rule will generally require South Carolina real estate attorneys to make reports to FinCEN concerning every residential (1-4 Family property) transaction where 1) the grantee is an entity or trust and 2) there is no financing provided by a lender that is subject to federal anti-money laundering reporting obligations. 

The closing attorney will be on the hook (under threat of civil and criminal liability) to collect extensive information from the parties to the transaction, including the names and addresses of every person or entity who has a beneficial interest in or control over the grantee entity. Generally speaking, the collection of information is well outside the scope of the usual real estate closing and places the burden on attorneys and title companies to collect information from third parties who may not be willing to share that information.

However, there is still the possibility that the Rule will not go into effect as scheduled in December. This past May, Fidelity National Financial, Inc. (“FNF”), the parent corporation of Chicago Title, filed suit in federal court challenging the Rule and thereby taking the lead role in speaking up on behalf of attorneys and title agents in advocating for more measured, less burdensome requirements and reporting.

In the lawsuit, FNF has requested an injunction suspending FinCEN’s enforcement of the Rule. A hearing is currently scheduled to be heard on September 30, 2025.

FNF also filed a Motion for Summary Judgment to which the American Land Title Association (ALTA) recently expressed its support by filing an amicus brief. ALTA, of course, is the most prominent trade association of title insurance companies and title agents in the United States.

While FinCEN asserts that the cost to the title industry (including closing attorneys) of meeting the reporting requirements could reach as high as $600 million annually, ALTA’s brief argues that FinCEN has significantly underestimated the training and collection time necessary to comply and that the true cost to the industry will be significantly higher. ALTA argues that the this significant burden cannot possibly be outweighed by the corresponding benefit to law enforcement. ALTA points out that FinCEN drastically reduced the scope of the reporting of Beneficial Ownership Information (BOI) under the Corporate Transparency Act (which we wrote about here) in part because the new administration believed that reporting on American formed entities was of limited value to law enforcement.

ALTA further argues that the reporting burden under the Rule will disproportionately fall on small businesses that are “ill equipped” to absorb the additional costs and regulatory burden of reporting in an industry with already thin margins. I think many South Carolina residential real attorneys with already thinly stretched teams would agree wholeheartedly with ALTA in that statement. 

Certainly, there are quite a few miles to go with this lawsuit before a final verdict is rendered concerning the new Rule. We will continue to keep an eye on the progress of this case, but for now South Carolina attorneys must continue to develop procedures for complying with this Rule when it goes lives on December 1. 

FinCEN’s Anti-Money Laundering Regulations for Residential Real Estate Transfers: Who, What, How & When?

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At this point we should have all heard about FinCEN’s Anti-Money Laundering rule, but details may still be fuzzy. Let’s break down the information available to prepare for what appears to be a new reporting requirement intended to go into effect December 1st, 2025! That’s right! As of this article, reporting obligations begin THIS YEAR!

FinCEN’s Anti-Money Laundering Rule applies to any non-financed transfer of any residential real estate to a legal entity or trust. This includes transfers that occur anywhere in the U.S., including Puerto Rico and overseas territories. Keep in mind that this rule covers “transfers” – not just sales. There is no minimum purchase price to trigger this reporting requirement.

There are several key words in this first sentence. 

“Non-Financed” – Specifically, FinCEN is targeting transactions where there is no loan secured by transferred real estate, AND the loan is not made by a financial institution with an anti-money laundering program and an obligation to report suspicious transactions.  

So, in the inverse, if you have a transfer that is a cash purchase or involves private equity lending or even hard money lenders, this will trigger the reporting obligation.

“Residential Real Estate” – What is residential real estate? This seems like it should be a pretty straightforward question with an expected response.  Here are certain types of residential real estate that FinCEN includes within these regulations:

  • A residential property with a 1-4 family structure 
  • Vacant land on which buyer intends to build 1-4 family structure
  • Condo or co-op
  • Apartment buildings or mixed use with a 1-4 family structure (existing or to be built)

However, how do you determine buyer’s intended use of the property? Will the inclusion of commercial aspects of use affect reporting requirements? We may not see many properties that combine residential and commercial use, but, especially in more rural areas, there are sites on which a business owner both lives and maintains a commercial structure such as a workshop or garage.

“Legal Entity or Trust” – This is pretty broad language. We can probably all agree on the most common types of entities that hold property, including corporations, limited liability companies, general partnerships and limited partnerships. These are easy to recognize in connection with a non-financed transfer or residential real property. The second part, or the “Trust” component of this term, is generally understood, as well, and is intended to include the basic understanding in South Carolina that, although a trust is a legal fiction, a trustee of a trust can hold title to real property in South Carolina apart from the individual rights of that trustee, the grantor/settlor or the beneficiary(ies) of the trust. For purposes of FinCEN’s rule, a transferee trustee does not include (i) a statutory trust); (ii) a trust that is a securities reporting issuer; or (iii) a trust in which the trustee is a securities reporting issuer. Other exclusions from FinCEN’s definition of trust transferee include a governmental authority, a bank or credit union and a public utility.

Exemptions!!!

There are certain exemptions to FinCEN’s reporting requirements under these regulations, including the grant, transfer or revocation of an easement or property subject to a reverse 1031 exchange1. Other exemptions may include:

  • A transfer pursuant to the terms of Last Will, testamentary trust, by operation of law or contractual obligation following the death of an individual;
  • A transfer incident to divorce order;
  • A transfer to a bankruptcy estate; and
  • A transfer supervised by a court in the United States (possible a forfeiture).

Who is the Reporting Person?

There is a list of priorities for who is to be the reporting person for purposes of these regulations. First is the settlement agent named on the settlement statement. FinCEN does not note a difference between an attorney settlement agent and a non-attorney settlement agent. The second choice for a reporting person is the person that prepares the settlement statement. The third choice is the person that records the deed in the public records. The fourth option is the person that issues the owner’s title insurance policy. Fifth is the person that dispenses the greatest amount of funds. Sixth choice is the person who examined title and the final and seventh option is the person that prepared the deed.

I can imagine so many unforeseen and unexpected problems arising from placing reporting obligations upon the individuals that might find themselves on the foregoing list. Other than a settlement agent, or perhaps the person preparing the settlement statement if that person has been specifically allocated the duty to report under these regulations, these individuals could be people that have never heard of these regulations or the type of reporting requirements that have now been legally assigned to them. A prime example could be a deed from a parent as grantor to a family estate planning entity or other estate planning transfer where a real estate attorney might not be involved. If there is no settlement agent and no settlement statement prepared, as between the parties (grantor/grantee/trustee?), whoever records the deed now has the obligation to report this transfer to FinCEN.  

What must be reported?

There has been a lot of discussion of what type of beneficial ownership information must be reported and disclosed, so I won’t go into that in this article, but what other information must be reported? Certain payment information must be reported to FinCEN under these regulations including (i) the amount of any payment made, (ii) the form of payment, (iii) the name of the payor if the payor is not the transferee entity or trust and, (iv) if the payment comes from a financial institution, the name of that institution and the account number.

When must the report be submitted? The report is due to FinCEN by the last day of the month after the date of closing. For example, if the transfer occurs on February 28th, reporting is due by the last day of March that same year. However, it is particularly important to gather all information needed for a full and complete report prior to closing. We know once the transfer is complete, it is difficult to get additional items from the parties to the transaction. However, when pressed by ALTA for a “good faith” basis of approval for a partial or incomplete report, FinCEN did not bite.  FinCEN maintains that their “Reasonable Reliance Rule” addresses concerns over difficulty to obtain all information necessary to fully report the transfer.

What is the Reasonable Reliance Standard/Rule? FinCEN says that absent knowledge of facts that reasonably call into question the reliability of the information provided, a reporting person may rely on information provided, including buyer’s intended use of the property (for residential purposes?) and for lenders’ qualifications (do they hold themselves out to have an AML program and be subject to obligatory reporting?). However, BOI must be certified to the reporting person!

What if you do not report under these regulations? Violations of these regulations include both civil and criminal liabilities and penalties. These are the normal violations and penalties under general FinCEN regulations and not special to the AML Regulations but can be severe. Criminal penalties can result in financial obligations and prison time and civil penalties, which accrue for each separate willful violation range from $25k to$100K and violations for negligence are not to exceed $500 or $50k if a pattern of negligence is found. This is not all-inclusive of the repercussions for violations of these reporting regulations, but definitely something to get your attention!

How can we prepare? 

Although we do not have FinCEN’s final real estate report that real estate professionals can use to report information for each covered transfer, as I stated at the beginning of this article, the reporting period begins December1, 2025. This means that people involved in residential real estate transfers to legal entities or trusts that may not involve financial institutions subject to federal anti-money laundering programs and reporting duties need to begin studying these regulations and to afford time and resources for training to know what information to collect, how and from whom to collect it, and how and when to report it.

  1. While there may be an exemption in a standard 1031 exchange depending on the deal specific facts, this potential exemption is intended for reverse 1031 transactions where the replacement property is transferred to an entity accommodation titleholder during the course of the overall 1031 exchange transaction. ↩︎

Privacy Protection Acts set to take effect January 2026

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Our story began when Governor McMaster signed Act 56 of 2023, commonly known as the Law Enforcement Personal Privacy Protection Act and the Judicial Personal Privacy Protection Act. This Act represented a significant legislative development at the intersection of personal privacy and public access to real property records. While the goal of this legislation was to protect the privacy of law enforcement officers and judges, it carried important implications for the practice of real estate law, particularly in how attorneys conduct title examinations, advise clients, and navigate public records. Many other states had enacted similar legislation with mixed results. “The Redaction Bill,” as passed, also imposed significant burdens on county offices. Registrars needed a system of redacting information upon request, yet it was unclear how someone who needed access to the information could obtain it. 

The Redaction Bill grants active and former law enforcement officers and judicial employees to right to request redaction of personal information from publicly accessible state and local government websites. It was designed to protect these public servants from targeted harassment or threats. The redacted information includes names and home addresses, which are vital to maintaining the integrity of real property records. 

For those in the title industry, the Redaction Bill posed an immediate concern: how would the redaction of identifying information affect title searches, chain of title evaluations, or the ability to confirm ownership and encumbrances? County recorders and advocacy groups such as the Palmetto Land Title Association urged the general assembly to slow down and consider changing the bill to accomplish its main objective while minimizing its impact on real estate transactions. Despite these warnings, the legislature pushed the Redaction Bill through to the Governor’s desk with an effective date of July 1, 2024. 

For attorneys handling real estate transactions, the redaction of names and property identifiers raises a number of legal and practical issues. First and foremost is the risk to title integrity. If an individual’s name or parcel ID is redacted from the public record, attorneys may face increased difficulty in confirming ownership, assessing liens, or determining if any litigation is pending involving the property. This difficulty may increase the time and cost of due diligence and could expose clients to hidden encumbrances or title defects.

Moreover, attorneys acting as title agents or representing lenders could be placed in a precarious position when disbursing closing proceeds based on incomplete or obscured information. The redaction of key ownership data may also affect notice requirements under state law. For example, if the name on a deed is completely redacted, then how is a title examiner supposed to verify the ownership of the property they are searching? 

Finally, county officials—such as registrars of deeds and clerks of court—may each adopt different redaction protocols in the absence of a unified state-level system. This lack of consistency could result in a patchwork of record keeping practices, with varying impacts depending on jurisdiction. 

Despite pushing through the Redaction Bill, legislators were amenable to working with concerned groups to address the concerns raised by this bill. Recognizing that a fix was needed, the SC State Senate added a provision to the budget bill delaying the effective date to July 1, 2025, allowing extra time to make the needed changes.  Initially introduced as Senate Bill 126, Act 4 of 2025 (“Fix Bill”) was signed into law just last month.  Most critically, the Fix Bill changed “redaction” to “restriction”. The Fix Bill also limits the definition of “Disclosed Records” to those that are placed on a publicly available internet website. This clarification means that names and tax map numbers must still appear where they are embedded in formal documents—such as deeds, mortgages, easements, and affidavits—even if that information is restricted from online directory search results. This crucial carve-out preserves the reliability of title records and ensures that attorneys can still conduct necessary due diligence using official sources.  The final key change of the Bill is that it named certain people who may still access the restricted information, specifically including title insurers, their affiliates, or title insurance agents and agencies.

The Fix Bill delays the effective date to January 1, 2026, giving government agencies extra time to establish procedures, and ensuring that the real estate legal community has an opportunity to adjust workflows, educate staff, and advise clients on potential implications. It will be interesting to see how each of the counties handles the restriction of information within their own systems.

What Should Attorneys Do Now ?

Realtors and real estate attorneys will likely be the first to be asked about this bill and how one may avail themselves of this privacy protection. In addition to knowing about this Bill in general, South Carolina closing attorneys should begin reviewing internal procedures and client advisories to prepare for the January 2026 implementation. While we don’t yet know the mechanics each county will be using to restrict information, some key considerations include:

  • Title Search Protocols: Update search procedures to account for redacted records. Train staff to request and cross-reference official document images, not just searchable indexes.
  • Client Education: Inform institutional clients, especially lenders and developers, about the potential for privacy-related gaps in online records and the need for more thorough due diligence.
  • Engagement with Recorders: Develop working relationships with local registers of deeds to understand how each county plans to implement redaction requests and what access will be retained through in-office systems.
  • Legislative Monitoring: Stay informed about any additional regulations or guidance issued by the state to refine implementation, as further clarification may come through administrative rulemaking. 

For real estate attorneys, the Fix Bill introduces both challenges and obligations. While it mitigates the most serious risks to property records, attorneys must remain vigilant in adapting their practices to protect clients and ensure the continued reliability of title. A proactive approach built on awareness, communication, and procedural readiness will be essential as these laws take full effect. This journey also highlights the importance of advocacy groups such as the Palmetto Land Title Association and their work to protect the title industry in South Carolina.

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.

Next steps …

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It is difficult to follow Claire Manning in any aspect of her distinguished career, but it is a truly daunting task to step in for the author of the blog of record for the South Carolina real estate community. Every week, Claire wrote about a diverse range of topics with her unique brand of clarity, style and wit and that is quite a lot for anyone to live up to.

Filling this void with just one person seemed impossible, so Chicago Title has dedicated a entire legion of our best men and women to this task. The Chicago Title underwriting team will now collectively try to add up to one Claire. A daunting task, but this is the business we’ve chosen and these are the subjects that are most dear to our professional hearts.  

We hope that our team’s eclectic set of work experiences and interest, will come together to keep you informed, entertained and engaged in the current happenings impacting dirt law in South Carolina and beyond. 

Thank you, Claire

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For more than three decades, Claire Manning has been a trusted voice in South Carolina’s real estate law community. Ten years ago, Claire decided to start writing a real estate law blog she titled “Let’s Talk Dirt” to educate and engage lawyers, paralegals, and title agents on the ever-evolving landscape of real estate law and title insurance. With an impressive 518 posts and 284,000 views, her dedication to keeping the industry informed is nothing short of remarkable. In fact, Claire has continued to blog regularly even after she retired in 2021!

Now, as she steps away from her role as blog editor and hands the reins over to the Chicago Title South Carolina underwriters, we want to take a moment to say: Thank you, Claire.

A Legacy of Knowledge and Service

Claire’s ability to break down complex legal topics into clear, digestible insights has been invaluable. Whether it was legislative updates, case law interpretations, or practical guidance on day-to-day title issues, her posts provided a reliable resource for professionals across the state.

Her writing was more than just informative—it was engaging and relatable. She had a way of making even the driest legal topics feel approachable, sprinkling in humor and real-world applications that made learning enjoyable. It’s no surprise that Let’s Talk Dirt became a go-to source for so many in the industry.

More Than a Blog—A Community

One of Claire’s greatest accomplishments was fostering a sense of community. Through her blog, she created a space where real estate professionals could stay connected, share insights, and navigate challenges together. She never shied away from tackling tough topics, and she always welcomed discussion and questions.

Her impact goes beyond the blog itself. Claire has been a mentor, a leader, and a resource to so many in the industry. She has always been generous with her knowledge and time, ensuring that South Carolina’s real estate professionals had the tools and information they needed to serve their clients with confidence.

The Future of Let’s Talk Dirt

Though Claire is stepping away as editor, her legacy continues. Chicago Title’s South Carolina underwriters and attorneys will carry on the blog’s mission, ensuring that the industry remains informed and engaged. And while Claire may no longer be writing the posts, her influence will still be felt in every update and insight shared.

To Claire—thank you for your years of dedication, your expertise, and your passion for educating the real estate law community. Your contributions have made a lasting impact, and your work will continue to benefit professionals across the state for years to come.

We wish you all the best in your next chapter and hope you take great pride in the incredible resource you’ve built. Let’s Talk Dirt wouldn’t be what it is today without you!

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!

Following injunction, FinCEN announces compliance with CTA is voluntary

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On December 3, the United District Court for the Eastern Division of Texas granted a nationwide preliminary injunction that prohibits the federal government from enforcing The Corporate Transparency Act.

In response, the United States Treasury Financial Crimes Enforcement Network (FinCEN) announced on December 9 that while the injunction is in place, compliance with the CTA is only voluntary.

The Corporate Transparency Act, which went into effect January 1, 2024, requires many companies to report beneficial ownership information to FinCEN. Beneficial ownership information is defined as identifying information about the individuals who directly or indirectly own or control a company. The deadline for entities created before January 1, 2024 was January 1, 2025

Lawyers have been scrambling to grasp the intricacies of the new law and to assist their corporate clients, including homeowners’ associations, in compliance.

Six plaintiffs filed the lawsuit in May challenging the constitutionality of the law. The decision is based on the Commerce Clause, and the statute is based on national security and aimed at enforcing laws against money laundering.

This case will surely go to the Supreme Court, and we will have to wait to see how that Court reacts. It is possible that the rationale for the legislation holds for some but not all entities. Homeowners’ associations seem to be likely candidates to dodge this particular bullet.

In the meantime, your clients are not required to comply with the new law.