USA - SOUTH CAROLINA Law and Practice Contributed by: Matt Norton and Christian Kolic, K&L Gates
3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders Foreign banking organisations are subject to regulation at the federal level, with the nature and extent of the regulation depending upon whether the foreign banking operation is char - tered in the United States or abroad. Although there are several potentially applicable exemptions for mortgage lenders, foreign lend - ers may be required to obtain a certificate of authority to transact business in South Carolina. South Carolina counsel should be consulted as to whether the transaction may be structured so as to avoid the need for a certificate of authority. There is effectively no usury in South Carolina and no other interest rate regulation with respect to commercial finance. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security There are no mortgage taxes, transfer taxes, or documentary taxes imposed on the granting of mortgages or other security in real estate inter - ests. 3.5 Legal Requirements Before an Entity Can Give Valid Security South Carolina entities are empowered to do all things necessary or convenient to carry out their business and affairs, including the mortgaging of their properties. Customarily, the governing body of a borrowing entity will adopt a resolution (or act by written consent) making a determina - tion that the granting of the particular security is in the best interest of the entity and in further- ance of the business purposes of the entity.
a notice in a prescribed form prior to the transac - tion and the execution of a waiver in a prescribed form as part of the transaction. Private Enforcement of Mortgages South Carolina does not recognise private enforcement of mortgages, such as by way of a power of sale. Further, a lender is not entitled to take possession of the mortgaged property after default – a lender’s remedy is limited to judicial foreclosure. In a judicial foreclosure, a receiver may be appointed by the court to take possession of the property and collect rents for the benefit of the lender, but only if the appropri - ate language is contained in the mortgage loan documents. Lenders are advised to consult South Carolina counsel to ensure that the financing documents include the necessary receivership provisions. Assignment In addition to a mortgage, borrowers are gener - ally required to execute an assignment of the leases, rents, and profits of the property. South Carolina counsel should be consulted to ensure the adequacy of any such intended assign - ment. To the extent there is significant non-real- estate collateral located on the property (such as machinery and equipment), a borrower may grant a personal property security interest in that non-real-estate collateral. Finally, security can also be taken at the equity level of the real estate owning entity. This is done by way of a pledge of the equity interests in the real estate owning entity by the owners of those interests.
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