A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 27-1-80 SO AS TO PROVIDE FOR CERTAIN DISCLOSURES IN THE PURCHASE OF AN INTEREST IN A MANAGING ENTITY.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Chapter 1, Title 27 of the S.C. Code is amended by adding:

 

    Section 27-1-80. (A) As used in this section:

       (1) "Business entity" means a partnership, corporation, joint venture, limited liability company, or other business organization or business association, however organized.

       (2) "Managing entity" means a business entity that owns residential property used in a residential arrangement.

       (3) "Residential arrangement" means an arrangement in which the purchaser of an interest in a business entity is entitled to exclusive possession of residential property owned by the entity as long as the purchaser holds the interest in the business entity.

       (4) "Residential property" means the real property and improvements for a single-family house, duplex, triplex, or quadruplex.

    (B)(1) An agreement for the purchase of an interest in a managing entity must disclose to the purchaser that the agreement is for the purchase of an interest in the entity and not in any residential property itself.

       (2) The purchase agreement and any other agreement or rules governing the residential arrangement or the ownership interest in the entity may not require that a dispute concerning the arrangement or interest be brought before a tribunal other than a court established under the laws of this State or the United States.

       (3) This subsection does not apply to the sale, rental, or occupancy of a dwelling that is a single-family house, duplex, triplex, or quadruplex located on a subdivided lot in a parcel of land twenty-five acres or greater owned by a religious organization, association, or society, or a nonprofit institution or organization operated, supervised, or controlled by or in conjunction with a religious organization, association, or society.

    (C) A managing entity may not take action with respect to an interest in the entity in a manner that is a violation of law if the interest in the entity was an interest in real property, including:

       (1) restricting the transfer of the interest;

       (2) imposing requirements to maintain the interest; or

       (3) refusing to grant an interest to an otherwise qualified person.

    (D) Notwithstanding any provision in an agreement between the owner and a managing entity, an owner of an interest in a managing entity may transfer the interest without approval from the managing entity.

    (E) A managing entity may not charge a fee for or share in the proceeds of the transfer of an interest in the managing entity from an owner to a subsequent purchaser.

    (F) A violation of this chapter is an unfair or deceptive trade practice pursuant to Chapter 5, Title 39.

    (G) This section does not apply to a timeshare plan.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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