USA – SOUTH CAROLINA Law and Practice Contributed by: Matt Norton, Parker Havis and Aaron Lay, K&L Gates
6.14 Tenant’s Ability to Alter and Improve Real Estate Whether a tenant may alter or improve the lease prem - ises is governed by the terms of the lease. Typically, a lease will expressly prohibit alteration or improve - ment of the lease premises without the prior written consent of the landlord. If alteration or improvement is allowed, the landlord will require indemnity against mechanic’s liens and other liability from the tenant and require the payment of any additional insurance pre - miums resulting from the alteration or improvement. The construction or alteration of leased premises will also be subject to the general construction and per - mitting requirements of the jurisdiction. 6.15 Specific Regulations There are safety regulations applicable to high-density uses, such as multifamily properties, hotels and office buildings, including requirements for smoke detec - tors, sprinkler systems, isolated stairwells, firewalls and general resistance. High-risk uses may be subject to special regula - tion by the US Department of Homeland Security. For example, chemical manufacturing facilities may be subject to the Chemical Facilities Anti-Terrorism Standards regulations promulgated by the US Depart - ment of Homeland Security. These requirements typi - cally include fencing and screening adequate to limit access and sightlines onto the property. Commercial real property that is to be used for the sale or consumption of alcoholic beverages is subject to regulation under state law as to whether such sale or consumption is permitted on the property. Other - wise, except for generally applicable zoning and land- use regulations, there are no specific regulations or laws that apply to particular categories of commercial real property leases. 6.16 Effect of the Tenant’s Insolvency Insolvency An insolvent tenant who fails to pay rent when due may be evicted from the property, and the landlord may terminate the lease. A landlord may also recover past-due rent and damages arising from the tenant’s failure to pay future rent.
Bankruptcy A tenant in bankruptcy, however, will generally have the right to reject any lease determined to be burden - some to the tenant, and as a result of such rejec - tion, the lease will terminate. Further, a tenant’s bank - ruptcy will result in an automatic stay prohibiting acts to enforce the lease or evict the tenant without prior bankruptcy court approval. 6.17 Right to Occupy After Termination or Expiry of a Lease A tenant has no right to possession after termination of the lease and may be evicted by appropriate court procedures. If the lease so provides, a tenant holding over beyond the expiration of the term may be liable for rent during the holdover period at some multiple of the original rental amount. 6.18 Right to Assign a Leasehold Interest Assignment and sublease provisions are generally included in leases, but where they are omitted, the majority rule is that the lease can be freely assigned or sublet; however, South Carolina takes a minority posi - tion for subletting, requiring consent from the landlord for a tenant to sublease where the lease is silent (S.C. Code Title 27, Chapter 35). It is common for leases to restrict assignment and subleasing but carve out limited exceptions in the event of an assignment or sublease to a related entity (eg, in connection with a reorganisation of the tenant entity) or in the event of an assignment to a successor entity (eg, the tenant entity is acquired by a third party). Where assignment or subletting is permitted in the lease, it would be typi - cal for the landlord to require evidence of adequate net worth from the proposed assignee or sublessee, and the landlord may not agree to release the assignor from backstopping the assignee if the assignee fails to satisfy their lease obligations after assignment. 6.19 Right to Terminate a Lease A landlord has a statutory right to terminate the lease upon non-payment of rent. Most commercial leases also contain a detailed list of defaults that will allow the landlord to terminate the lease and evict the ten - ant. These defaults frequently include the non-pay - ment of rent, the failure to maintain the premises, the unauthorised use of the premises, the unauthorised assignment of the lease, the unauthorised subleasing
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