USA - SOUTH CAROLINA Law and Practice Contributed by: Matt Norton and Christian Kolic, K&L Gates
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The granting of the right to possess real prop - erty without the transfer of title is usually accom - plished by a lease. Leases grant a right of pos - session, typically for a term of years. A limited right of possession or use may also be granted by way of a license; typically, however, a license is for a very short, transitory period and for a limited, specific purpose. Moreover, leases granting an exclusive right of posses - sion are considered an interest in real property; licenses do not grant an exclusive right of pos - session and are not considered an interest in real property. The right to use another’s property for a spe - cific purpose may also be granted by way of an easement. Easements may be perpetual or for a specified term and may be classified as appur - tenant, meaning that the easement benefits transfer with the benefited property, or person - al, meaning that the easement benefits are not transferable. Personal easements are frequently for a limited term. Easements are considered an interest in real property. 6.2 Types of Commercial Leases Commercial leases are generally classified based on the nature of the property leased. A commer - cial lease that grants the right to possession to unimproved land only is commonly referred to as a ground lease and is typically used where the lessee intends to construct and own title to the buildings, with title to the ground remain - ing with the lessor. Commercial leases may also grant the right to possession of an entire facility or property – both land and improvements. Like -
institutions, and de minimis organisation fees are owed to the South Carolina Secretary of State for an entity to organise or register to conduct business in South Carolina, South Carolina does not otherwise impose minimal capital require - ments on the investment entities discussed in 5. Investment Vehicles . 5.5 Applicable Governance Requirements LLCs are usually governed either by the mem - bers or by appointing managers, although they can also be governed by a board of directors. Partnerships and LPs are governed by their gen - eral partners. Corporations are usually governed by a board of directors. In each case, the appli - cable members of the governing bodies approve proposed transactions by way of resolutions or actions by written consent. The Corporate Transparency Act has increased disclosure requirements for the beneficial own - ers of LLCs. Historically, it would have been common for a real estate attorney to co-ordinate organisation of an LLC, but in response to the Corporate Transparency Act, it is recommended that organisers consult with corporate counsel or third-party servicers to ensure compliance with the Corporate Transparency Act. 5.6 Annual Entity Maintenance and Accounting Compliance The annual entity maintenance and accounting compliance cost for each type of entity used to invest in real estate can vary dramatically from a few hundred dollars to several thousand dollars depending on the amount of assets owned or the volume of transactions by the entity.
1288 CHAMBERS.COM
Powered by FlippingBook