USA - SOUTH CAROLINA Law and Practice Contributed by: Matt Norton and Christian Kolic, K&L Gates
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations Typical protections obtained by a landlord against the defaulting tenant include the taking of a security deposit or obtaining a letter of credit at the inception of the lease and requiring that a solvent third party execute a guaranty of the tenant’s obligations under the lease. 6.17 Right to Occupy After Termination or Expiry of a Lease A tenant has no right to possession after termi - nation of the lease and may be evicted by appro - priate court procedures. If the lease so provides, a tenant holding over beyond the expiration of the term may be liable for rent during the holdo - ver period at some multiple of the original rental amount. 6.18 Right to Assign a Leasehold Interest Assignment and sublease provisions are gen - erally 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 position 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 connec - tion with a reorganisation of the tenant entity) or in the event of an assignment to a succes - sor entity (eg, the tenant entity is acquired by a third party). Where assignment or subletting is permitted in the lease, it would be typical 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
High-risk uses may be subject to special regula - tion by the US Department of Homeland Secu - rity. For example, chemical manufacturing facili - ties may be subject to the Chemical Facilities Anti-Terrorism Standards regulations promulgat - ed by the US Department of Homeland Security. These requirements typically include fencing and screening adequate to limit access and sight - lines 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. Otherwise, except for gener - ally applicable zoning and land-use regulations, there are no specific regulations or laws that apply to particular categories of commercial real property leases. 6.15 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 burdensome to the tenant, and as a result of such rejection, the lease will terminate. Further, a tenant’s bankruptcy will result in an automat - ic stay prohibiting acts to enforce the lease or evict the tenant without prior bankruptcy court approval.
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