USA – SOUTH CAROLINA Law and Practice Contributed by: Matt Norton, Parker Havis and Aaron Lay, K&L Gates
Identification of Wetlands Federal and state regulation precludes development of or damage to many kinds of wetlands and regu - lates the discharge of stormwater runoff into the wet - lands. Wetland regulations are highly technical; the purchaser may be required to restore damaged wet - lands (typically at considerable expense) if rules are not fully complied with. Should wetland impairment be necessary for an economically viable development, such impairment may be permitted if the purchaser makes an appropriate investment in a “wetland bank” that ensures the preservation of a comparable amount of wetlands located elsewhere. Physical Condition Due diligence as to the physical condition of the prop - erty is typically undertaken by engineers or consult - ants retained by the buyer or by way of a property condition report. If construction is contemplated, geo - technical soil tests will be conducted to determine the suitability of the site for construction. Real Property Tax Real property tax matters are a significant part of the purchaser’s due diligence. In addition to verifying that all taxes due and payable have been paid, cer - tain transactions may be deemed to be “assessable transfers of interest”; this designation can trigger a reassessment of the property for tax purposes in the year following the transfer, and the resulting increase in value will result in an increase in real property taxes levied. If the property has been classified as agricultural prop - erty, a change to a non-agricultural use may result in a recapture (or “roll back”) of tax discounts given in the prior three years on account of the property’s agricultural classification. Under South Carolina law, the state can impose a tax lien on property in the hands of the purchaser for income and other general taxes not paid by the seller. South Carolina law further provides several safe har - bours under which this liability can be avoided based on tax compliance affidavits of the seller and a com - pliance certificate from the South Carolina taxing authorities.
sional Surveyors, Inc (NSPS). These standards contain a number of optional survey coverages and certifica - tions; South Carolina counsel will provide guidance as to the optional provisions appropriate to the specific project. Surveys are necessary to adequately identify and locate encroachments (on or off the property), identify and locate easements and other possible title issues, and specifically locate on the property the exceptions identified in the title commitment. Zoning and Entitlement Zoning and entitlement due diligence likewise will be conducted by the purchaser’s counsel by direct con - tact with the applicable planning and zoning officials to obtain a “zoning letter”; this due diligence may be supplemented by a zoning report obtained from a national provider. Environmental Environmental due diligence will consist at a mini - mum of a Phase I environmental survey followed by a Phase II environmental survey, as necessary. Prop - erly conducted environmental surveys may provide a purchaser with a defence against unlimited liability for existing contamination on the property, which oth - erwise attaches to parties in the chain of record title. In order for a purchaser to obtain this defence, there are number of technical requirements that must be complied with in connection with the environmental surveys. With respect to contaminated properties, purchasers may enter into a voluntary clean-up contract with the state authorities in order to limit environmental claims. The ability of the purchaser to enter into such a volun - tary clean-up contract, however, is subject to a num - ber of technical requirements. For example, the clean- up contract must be in place prior to the time the purchaser obtains title; otherwise, the purchaser may have full joint and several liability for environmental contamination on the property. Even if an agreement is reached with the state environmental authorities, this is no guarantee that the protections in the agree - ment will be recognised by the federal environmental authorities.
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