Governor signs bill to reform point-of-sale reassessment law

House Speaker Bobby Harrell, R-Charleston, watched Gov. Nikki Haley sign the point-of-sale bill today on Daniel Island. (Photo/Leslie Burden)
By Matt Tomsic
mtomsic@scbiznews.com
Published Aug. 15, 2011
Gov. Nikki Haley and other lawmakers gathered in Daniel Island Monday for a signing ceremony of the point-of-sale bill passed in June.
“It was nice to see that this kind of work can be done in South Carolina,” Haley said. “This is a great day and just the beginning of what we're going to do with the property taxes in South Carolina.”

Sen. Hugh Leatherman, R-Florence.
The point-of-sale law allows a tax exemption of 25% of the market value of the property being bought. It changes a 2006 law that updated the taxable value of a property to its sales price when it changed hands, reassessing the taxable value of a property at the point of sale. Haley said the 2006 law added costs for business owners and owners of second homes in particular, chilling those types of purchases.
Sen. Hugh Leatherman, R-Florence, said the 2006 law had unintended consequences, and he didn't imagine the impact it would have on the real estate market in South Carolina. He said point-of-sale reform will help get the state's real estate industry moving again. Haley said the state government's next step is to look at the tax structure as a whole.
Local government representatives contested the point-of-sale bill because it leaves less revenue for their governments, while the real estate industry said the 2006 law chilled the market for commercial properties and hampered economic development in South Carolina.
Leatherman recalled telling the parties involved to solve the problem together or the General Assembly would solve it for them. Eventually, Leatherman said, the parties compromised.
“I've always heard if nobody's happy, it's a pretty good compromise,” Leatherman said.

Legislative Update from Ellen Hoffman

Legislatively, we have been very busy at work for our Members and successful with our efforts to resolve three major issues that might have had a negative impact on our businesses within the Charleston market and in South Carolina.

• South Carolina Real Estate Commission's Referral Fee Guidelines
• Town of Summerville's Illegal Alien Ordinance
• City of Charleston's Nuisance Ordinance

South Carolina Real Estate Commission's Referral Fee Guidelines

A few months back, members of the Columbia affiliate began to receive violation letters for referral programs they were conducting with their residents. We requested an opportunity to speak directly with the Real Estate Commission and we were able to do so. That opportunity came several months back. While awaiting an opinion from the Commission, your South Carolina Apartment Association worked on legislation and found a willing sponsor for a Plan B, if needed. We now have an opinion in hand from the Office of General Counsel for the SC Department of Labor, Licensing and Regulation, authored by Sheridon H. Spoon, Assistant General Counsel of LLR. This opinion is favorable to our industry and to our desired practice to encourage resident referrals.

In summary, the Real Estate Commission released an advisory opinion on referrals. Essentially, property managers are free to do rebates and incentives, subject to certain guidelines. They accepted our premise that it is actually the company that pays the incentive and not the property manager. So as long as the property manager acts in an administrative role facilitating the payment, there is no violation.

Town of Summerville Illegal Alien Ordinance

The CAA, SCAA, and NAA rallied together to fight the passing of the proposed Illegal Alien Ordinance in the Town of Summerville. Your Board of Directors, Members of the CAA and Victoria Cowart, SCAA President, joined forces to speak out against this ordinance on behalf of our industry. From speaking at the town meetings, to holding private meetings with the individual Town Council Members, to engaging an attorney to formally address the legal issues with this ordinance to the Town of Summerville on behalf of the CAA, we were successful in winning this fight.

Some Basic Points of the Ordinance:

The Town wanted occupancy licenses to be obtained by the Town of Summerville residents (renters) within 5 days of their move in from the Town, certifying that they were not illegal aliens. Landlords in violation were to be fined up to $100 per occurrence and ineligible for an active business license.

August 11, 2010, the Town of Summerville voted to pass the Illegal Alien Ordinance with a 4-2 vote at the first reading, affecting business Owners and Landlords. Members of the CAA and SCAA were there to speak out against the ordinance on behalf of our industry.

September 8, 2010, the Town of Summerville voted to remove the Landlord portion of the ordinance and move forward with the business Owner requirements.

This was a win for the CAA and our Members. Please note that business Owners with employees in the Town of Summerville will still be affected by this ordinance.

City of Charleston's Nuisance Ordinance

The other win came in the form of work done by the CAA and the SCAA on the City of Charleston's Nuisance Ordinance. When the group first joined in on this discussion, the Council had read and approved a new ordinance that would make Landlords criminally responsible for the actions of their residents. Our participation brought the discussion to a deferment and we were offered a seat at the table to work on the language of the ordinance.

We understood the intent of this ordinance and the frustrations of citizens residing on the Charleston's peninsula, but we had issues with its far reaching implications. We went into that meeting with three major concerns.

1. Remove criminal penalties faced by the Owner, Management Company or licensed property manager.
2. Insert notification requirements specifying notice by way of certified/registered mail requiring the City to notify the Owner of the property as to any violations or issues that had arisen that might constitute or lead to the determination of the existence of a nuisance.
3. Carve out Landlords acting in concert with eviction legislation that requires our setting in the public right of way the evicted resident's possessions. We did not want to conduct ourselves in keeping with state law only to find the City had crafted an ordinance that would find us guilty for doing so.

The Ordinance that was ratified paid respect to our participation and those concerns. We wanted the perpetrators of this ordinance to be held responsible for their behaviors and not hold us criminally responsible and heavily fined for not parenting these adults. It was not an easy process, but everyone involved worked right up to the last minute to ensure the most favorable language for our industry. Our work on your behalf, with empathy and the best of cooperative intentions, paid off.

The new bill reads as follows: “It shall be unlawful for a Non-Resident Owner after receiving actual notice of the existence of a public nuisance on the Non-Resident Owner's property, to contribute to, maintain, or permit the public nuisance or its continuation thereof on the Non-Resident Owner's property. A Non-Resident Owner shall mean an owner of property who does not reside on the property where the public nuisance exists and who does not employ a professional, licensed manager or management company.”

In conclusion, a very big THANK YOU goes out to all of the individuals who assisted us in our efforts and for taking the time out of their busy schedules to contribute their opinions, give testimony and be present at these meetings.