The SC Vacation Rental Act was passed in 2002 and is designed to protect SC’s tourism industry’s reputation after some incidents where vacationing families traveled great distances to visit SC only to find their rental had been sold and they had no vacation place to stay/sleep so their vacation was ruined.

Buyers who want to occupy the property after closing when there are timely/proper vacation rentals scheduled on the property need to be prepared for the property being rented to vacationers or lawsuits if the vacation rentals are not honored.

SCR311 due diligence addendum allows a time frame for the buyer to timely/properly terminate a deal during the contract, for example, the seller violates the vacation rental act by not providing the vacation rental information prior to ratification of the contract. The buyer could terminate during due diligence. Obviously, if the seller complies with the vacation rental act and notifies the buyers prior to contract ratification, then the parties could avoid creating a contract.

Vacation rental act lawsuits allow for suing for damages and attorney fees.

Mediation is a way to try and work out a settlement.

Seller disclosure asks about lease issues.

Listing brokers should alert their sellers of the SC vacation rental act.

Buyer brokers should alert their buyers of the SC vacation rental act.

SCR310 contract alerts the parties to leasing issues and the SC vacation rental act reservations.

SCR310 requires the seller to deliver fee simple marketable title, so leasing issues can put the seller into a breach of contract if not handled properly.

REALTORS® have an ethical duty to recommend that parties obtain legal counsel to modify the contract for leasing issues (e.g. lease periods, vacation rental lease periods, management agreements, leasing issues/problems, security deposits, leasing documents, rents in arrears, eviction issues, legality of leasing, check-in sheets, contact information, check in photos/videos) both in regular leasing and vacation rental leasing.

Because the methods of handling leasing issues can vary so much with the parties, there cannot be a standard form to handle all these issues. So the standard forms alert the parties to these issues prior to contract. Parties then hire lawyers to design their agreements that cover their desires. Buyers might want the rentals. Buyers might not want the rentals. Buyers might want some of the rentals but not all the rentals. Sellers might reimburse the buyer for some rental issues. Sellers or buyers might desire to "buy out" the rental or management. Sellers and or buyers might want to escrow money with a lawyer for future rental issues.

ARTICLE 2

The South Carolina Vacation Rental Act

SECTION 27-50-210. Short title.

This article may be cited as the "South Carolina Vacation Rental Act".

HISTORY: 2002 Act No. 336, Section 2.

SECTION 27-50-220. Scope of article.

(A) This article applies to any rental management company acting on behalf of an owner or to any other persons or entities otherwise engaged in the renting or managing of residential property for vacation rental as defined in this article.

(B) This article does not apply to:

(1) lodging provided by hotels, motels, tourist camps, or campgrounds subject to regulation under Title 45, including hotels, motels, or condominiums with multiple owners owning and managing individual units or groups of units that rent units on a daily basis or longer, and provide a front desk or office for customer service, or provide a centralized telephone system, or provide housekeeping services at no additional charge;

(2) any vacation timesharing accommodation as defined by Section 27-32-10(7) and (8); or

(3) rental of residential property on a weekly or monthly basis pursuant to Chapter 40 of this title, the South Carolina Residential Landlord and Tenant Act.

HISTORY: 2002 Act No. 336, Section 2.

SECTION 27-50-230. Definitions.

As used in this article:

(1) "Residential property" means an apartment, condominium, single family home, townhouse, cottage, or other property devoted to residential use or occupancy by one or more persons for a definite or indefinite period.

(2) "Rental management company" means a licensed property manager-in-charge or broker-in-charge and their associates and employees who manage vacation rentals.

(3) "Vacation rental" means the lease, sublease, or other rental of residential property for a period of fewer than ninety days, except that it does not include rental of residential property on a weekly or monthly basis pursuant to Chapter 40 of this title, the South Carolina Residential Landlord and Tenant Act.

(4) "Vacation rental agreement" means a written agreement between an owner or the owner’s rental management company and a tenant, in which the tenant rents residential property belonging to the owner for a vacation rental. This definition includes electronically transmitted agreements, including, but not limited to, agreements entered into over the Internet and electronic facsimiles.

(5) "Vacation rental management agreement" means a written agreement between an owner and the owner’s rental management company, in which the rental management company manages residential property belonging to the owner for a vacation rental. This definition includes electronically transmitted agreements, including, but not limited to, agreements entered into over the Internet and electronic facsimiles.

HISTORY: 2002 Act No. 336, Section 2.

SECTION 27-50-240. Vacation rental agreements; evidence of acceptance; trust accounts; advance payments; rental management company responsibilities.

(A) An owner or rental management company and tenant shall use a written vacation rental agreement for all vacation rentals subject to the provisions of this article. No vacation rental agreement is valid and enforceable unless the tenant has accepted the agreement as evidenced by at least one of the following:

(1) the tenant’s signature on the vacation rental agreement, including electronic signatures transmitted over the Internet or other similar medium;

(2) the tenant’s payment of any monies towards the vacation rental agreement; and

(3) the tenant’s taking possession of the property subject to the vacation rental agreement.

(B) A rental management company in a vacation rental agreement shall place in a trust account conforming with the requirements of Section 40-57-135(B) any monies received from the tenant. The rental management company may require the tenant to pay all or part of any required rent, security deposit, or other fees in advance of the tenancy. The terms of these advanced payments, which may be nonrefundable, must be stated in the vacation rental agreement.

(C) A rental management company that executes a vacation rental agreement that does not conform to the provisions of this article or fails to execute a vacation rental agreement is subject to disciplinary action by the South Carolina Real Estate Commission under Section 40-57-145.

(D) A rental management company has a duty to inform each owner under contract with the rental management company of the owner’s obligations under this section. If the rental management company has performed this duty, the rental management company is not liable for the owner’s refusal or failure to comply with the requirements of this article. Nothing in this section may be construed to conflict with, or alter, the rental management company’s duties under the rules and regulations of the South Carolina Real Estate Commission.

HISTORY: 2002 Act No. 336, Section 2.

Editor’s Note

2016 Act No. 170 rewrote Chapter 57, Title 40. Section 40-57-145, referenced in (C), was renumbered as 1976 Code Section 40-57-710.

SECTION 27-50-250. Transfer of title of residential property subject to vacation rental agreement.

(A) The grantee of residential property subject to a vacation rental shall take title subject to the vacation rental agreement and the vacation rental management agreement for all vacation rental periods that begin no later than ninety days after the date the grantee’s interest is recorded in the office of the register of deeds. If the vacation rental begins more than ninety days after the recording of the grantee’s interest, then no party has the right to enforce the terms of the vacation rental agreement or occupancy provided for in the agreement, but the tenant is due a refund of any payments towards the agreement within forty-five days of the recording of the transfer of interest.

(B) Before ratification of any contract of sale, the grantor shall disclose to the grantee in writing all future time periods that the property is subject to a vacation rental. Not later than fourteen consecutive days after entering into a contract of sale or transfer of interest, whichever is earlier, the grantor shall disclose in writing to the rental management company the grantee’s name and address. Not later than fourteen consecutive days after the date of the transfer of interest, the grantor shall disclose in writing to the rental management company the grantee’s name, address, and date the transfer of interest was recorded. A grantor or grantee who knowingly violates or fails to perform any duty prescribed by any provision of this article is liable for actual damages proximately caused to the tenant and court costs. The court may award reasonable attorney fees incurred by the prevailing party. No action may be brought against an owner or rental management company by a tenant for any damages or injuries that occur as a result of property defects of which an owner or rental management company had no actual knowledge.

HISTORY: 2002 Act No. 336, Section 2.

SECTION 27-50-260. Tenant compliance with evacuation orders.

If state or local authorities order a mandatory evacuation of an area that includes a residential property subject to a vacation rental, the tenant in possession of the property shall comply with the evacuation order.

HISTORY: 2002 Act No. 336, Section 2.

SECTION 27-50-270. Effect of failure to disclose vacation rental agreement to purchaser.

Failure by the owner to disclose the existence of a vacation rental agreement to the purchaser, closing attorney, lender, or title insurer does not:

(1) void the sales agreement;

(2) create an encumbrance or defect in title; or

(3) create a cause of action against the purchaser, closing attorney, lender, or title insurer for failure to discover the existence of the vacation rental agreement.

HISTORY: 2002 Act No. 336, Section 2.

Posted by: Byron King on 12/14/18 (This information is only accurate as of 12/14/18. You must contact SCR for updates and changes to this information after 12/14/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)