South Carolina Real Estate Law: what to handle first around disclosure file, county records, and timing

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), is one of the most important property rights decisions in American constitutional law, and it arose from a real estate transaction on Isle of Palms, a barrier island outside Charleston. David Lucas purchased two oceanfront lots in 1986 for $975,000 with the intention of building single-family residences. Two years after his purchase, the South Carolina General Assembly enacted the Beachfront Management Act (now codified at S.C. Code Ann. § 48-39-250 et seq.), which established setback lines prohibiting construction seaward of the baseline. Lucas's lots fell entirely seaward of the setback line, rendering them unbuildable under the Act. Lucas filed suit against the South Carolina Coastal Council arguing that the setback requirement constituted a taking of his property requiring just compensation under the Fifth Amendment. The United States Supreme Court held that when a regulation deprives a property owner of all economically beneficial use of their land, the regulation constitutes a per se taking — unless the prohibited use would have been barred by background principles of nuisance or property law that already inhered in the title. Lucas received compensation for his lots, the setback line was eventually adjusted, and the South Carolina Coastal Council's successor agency (the South Carolina Department of Health and Environmental Control / Coastal Division) continues to administer the Beachfront Management Act, which governs construction near the Atlantic coast across South Carolina's barrier islands, including Hilton Head, Pawleys Island, Kiawah Island, and the Myrtle Beach oceanfront.

South Carolina is one of approximately a dozen states that require a licensed attorney to supervise the closing of a residential real estate transaction. Under S.C. Code Ann. § 40-5-400, the closing of a South Carolina real estate transaction — the preparation of the deed, the execution of loan documents, and the disbursement of closing funds — must be conducted under the supervision of a licensed South Carolina attorney. Title companies and real estate agents cannot close South Carolina transactions without an attorney's involvement. This attorney-closing requirement affects every residential real estate purchase and refinance in the state, from a Columbia starter home to a Hilton Head oceanfront villa. The requirement benefits buyers and sellers by ensuring independent legal oversight of the transaction documents, but it also adds closing cost (attorney's fee, ranging from approximately $400-$800 for standard residential closings, in addition to other closing costs). South Carolina is a mortgage state (not a deed of trust state) — the security instrument used to collateralize a home loan is a mortgage, and foreclosure on a defaulted mortgage requires a judicial proceeding through the Circuit Court or the master in equity (a specialized judicial officer who handles equity cases in South Carolina's Circuit Courts).