Here’s a gift, SC dirt lawyers: Your official recording fee list!

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This blog reported on May 29 that South Carolina Governor McMaster signed House Bill 3243 into law on May 16. This legislation, called the Predictable Recording Fee Act (S.C. Code §8-21-310), will streamline document filing in ROD offices by creating predictable fees for many commonly recorded documents such as deeds and mortgages. The new law will take effect on August 1, 2019. You and your staff will no longer have to count pages for documents to be recorded!

You can read the short but effective statute here.

My friend and colleague, Jennifer Rubin, was instrumental in the creation and passage of this legislation. Jennifer drafted the legislation and spearheaded Palmetto Land Title Association’s efforts to get the bill passed. Since the legislation was enacted, Jennifer has worked with members of South Carolina Court Administration, as well as leaders in ROD offices throughout the state, to draft a uniform recording fee schedule.  Attached is the newly created official recording fee list.

This law should simplify and streamline your practice and result in significant time and money savings for you and your clients.

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Flat recording legislation passes!

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August 1, 2019 is the effective date for this time-saving law

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On May 16, 2019, Governor Henry McMaster signed House Bill 3243 into law. You can read the short but effective statute here. House Bill 3243, better known as the Predictable Recording Fee Act (S.C. Code §8-21-310), will streamline the filing of documents in the register of deeds offices across the state by creating predictable fees for many commonly recorded documents such as deeds and mortgages. The new law will take effect on August 1, 2019. You and your staff will no longer have to count pages for documents to be recorded!

My friend and colleague, Jennifer Rubin, began work on this predictable recording Bill in the fall of 2016 when she was the President of the Palmetto Land Title Association. Our Agent and friend, Cynthia Blair, who is currently the American Land Title Association President, asked for Jennifer’s help in crafting, drafting and helping to turn the idea of predictable filing fees into law. Accepting that challenge and with the help and support of Chicago Title and PLTA, Jennifer began work on the Bill and began coordinating with the various stakeholders who were: The American Land Title Association, The South Carolina Association of Clerks of Court and Register of Deeds, The Association of Counties, The South Carolina Association of Realtors, The South Carolina Bankers Association, The Mortgage Bankers of the Carolinas, The South Carolina Bar Association, and the American Resort Developers Association on various versions of the Bill.

Jennifer said she was particularly thankful for the efforts of PLTA’s Legislative Committee led by attorney John Langford and the major contributions of her friend Julie Stutts, the deputy RMC for Aiken County.  She also appreciated the advocacy, guidance and support of lobbyists James Knox, Sharon Wilkerson, Neil Rashley, and Kali Turner and their respective groups.  Without everyone pushing this bill forward along and along, the creation of this law would not have been possible.

This new law will finally allow South Carolina real estate attorneys to fully comply with TRID regulations, provide clients and other parties with accurate final closing costs, and keep our bank accounts orderly. Please note that while the new law does not go into effect until August 1st, there is no grace period. So if you have closings on or near the first of August, please be sure to review the new statute to ensure that you’ve collected the correct amount for recording fees.

Dirt Lawyers: beware of these assessor antics

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and be aware of a tool for fighting back!

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The South Carolina Bar maintains a great listserv for members of the Real Estate Practices Section through which lawyers can ask questions and share information via email. I recommend that South Carolina real estate practitioners join the section and the list. Both provide opportunities for staying in touch with fellow practitioners and keeping up with news and trends.

Recently, the list contained this entry from a wonderful practitioner in Myrtle Beach whose name I’m withholding from this blog:

“Good morning Listmates,

Is every County going through the same audit of principal residence discounts for their taxpayers? Or is it just in Horry County? I have run into multiple back-charged properties and even ran into one where it was back-charged between when we did the title search and when we recorded the Deed. (And, yes, the Assessor refused to abate the new bills for the new owner.)

So what we have now is that on any given day the assessor can back charge multiple years’ worth of taxes (and you know how big the discount is, so these bills aren’t tiny!) regardless of whether or not we have searched the title, whether the property is in foreclosure, or even whether or not the property owner is dead. (Yes – my situation involved a deceased person in foreclosure – who do I go after for that tax bill payment??)

Add to this that our title abstractors who update the title work prior to recording are looking for judgments, liens, Deeds, Mortgages….but they are not looking for new tax bills, because tax bills come out in the Fall, right? Not anymore.

I imagine the buyers who get stuck with these bills could make a title insurance claim, but ultimately that will come back to the attorney because we “missed it” and then the E&O premiums go up and the client is lost to us because we look incompetent.

I guess the moral of this story is to instruct your abstractors to check for taxes before recording any Deeds. If you have a seller on the hook at least you can get the taxes paid at the closing. (Or if you have a deceased foreclosed party, at least you’ll know before the next tax year…)”

Horry County is, of course, a vacation haven. Many, many homeowners use Horry County properties as second homes and investment properties. Primary resident discounts amount to the difference in a 6% and a 4% mileage rate, so, as the astute lawyer suggested in her e-mail to fellow real estate practitioners, the differences are “not tiny”. Thus, all the coastal counties are vigilant about policing the discounts for primary residents.

(I know a guy who lives in an interior county in North Carolina and owns a second home in the Outer Banks. He votes where his beach house is located and has his mail delivered there, resulting in multiple trips to retrieve the mail. I don’t know exactly how the North Carolina statute on the primary residence discount reads, but I don’t recommend this tactic without the advice of a tax expert.)

Luckily for us in South Carolina, the Palmetto Land Title Association worked on this problem several years ago. Teri Callen of our office was Legislative Chair of PLTA at a time when the Association lobbied to “fix” the situation outlined above.

The Association, through intense lobbying efforts, was able to obtain a statutory amendment to the effect that a tax bill is final and that a “surprise” change in the 4% eligibility would only result in a personal liability so as not to affect title to the real property.

Most buyers are protected because they are bona fide purchasers for value without notice. (The lawyer’s problem, above, with the deceased property owner in foreclosure might not see the benefit of the statute.) The amendment went into effect in 2016, and counties will typically withdraw their surprise tax bills when they are provided with the statutory language.

Section 12-43-220(c)(2)(vii) of the South Carolina code now reads:

“(A) if a person signs the certification, obtains the four percent assessment ratio, and is thereafter found not eligible, or thereafter loses eligibility and fails to notify the assessor within six months, a penalty is imposed equal to one hundred percent of the tax paid, plus interest on that amount at the rate of one-half of one percent a month, but in no case less than thirty dollars nor more than the current year’s taxes. This penalty and any interest are considered ad valorem taxes due of the property for the purposes of collection and enforcement.

(B) If property had undergone an assessable transfer of interest as provided pursuant to Section 12-37-3150 and the transferee is a bona fide purchaser for value without notice, penalties assessed pursuant to subsection (vii)(A) and the additional property taxes and late payment penalties are solely the personal liability of the transferor and do not constitute a lien on and are not enforceable against the property in the hands of the transferee…”

Thanks to Teri Callen and Palmetto Land Title Association for this statutory “fix”! If you are faced with the problem outlined in the email above, provide your assessor’s office with the statute and remind them that the Code does not allow a “re-do” of tax bills that affect third party purchasers.

Also, consider joining Palmetto Land Title Association. It fights for us!