Hello REALTORS®,
A long time ago, when I didn’t have gray hair, I worked for your state association on the advocacy team. I moved over to SCR from the Home Builders Association. An issue the HBA was working on at the time was vested rights, and your REALTORS® Association recognized its importance to your industry too, and made reforming vested rights an advocacy priority.
What is a Vested Right?
Before July 2005, a real estate development project was not protected from a change in law or regulation until the developer secured a building permit. In legal parlance, it’s called vesting, and a building permit is very late in the development process.
Before 2005, it was not uncommon for local governments, and even state agencies, to change rules for development after the developer had already invested significant money in their project, but before they were ready for a building permit. In some cases, the rules were changed with the objective of halting the development.
The Vested Rights Act, which took effect July 1, 2005, changed the point of vesting from the building permit to approval of the site plan. The vesting period lasts for two years and can be extended for up to five more years if the development is progressing.
The law required local governments to enact a Vested Rights Ordinance, but many have not. Without a local ordinance, the SC Vested Rights Act applies.
Has a Developer Won a Vested Rights Case in Court?
I am aware of one case where a developer was able to enforce their vested rights. In 2018, Greenville County’s planning commission approved a 20-lot subdivision for Niemitalo, Inc., a local homebuilder who also owned the property. A month later, the planning commission reconsidered their approval and denied the subdivision. The county staff took another month to notify the developer.
Greenville County Council also enacted a new ordinance that allowed the planning commission to use a checklist when evaluating subdivisions that didn’t previously exist in the county’s ordinances.
Meanwhile, the builder spent two months, and substantial money, getting ready to develop their subdivision. After three years of litigation, a circuit court judge ruled in favor of the developer, the subdivision was approved under the ordinances that were in place in 2018, and the county paid the developer $100,000 in damages.
It was an important case because it sent a clear message to local governments that real estate owners and developers have rights too.
Proposed Ordinances Affected by the Vested Rights Act
As I thought about this 20-year-old advocacy win for Realtors, I thought about two recent ordinances we monitored that the Vested Rights Act has helped our members.
Stop Accepting Subdivisions for County Maintenance: Just this week, Anderson County Council proposed a new ordinance to refuse accepting new subdivision streets into the county’s road network. However, an approved subdivision would not be affected.
Zoning: Anderson County is considering zoning in two precincts—the referendum is next week (see below). And last month, Pickens County Council approved new zoning rules for the Highway 11 corridor. Those changes will not apply to developments that are already approved.
The Big Picture
Before 2005, when vesting was established by a building permit, large, expensive, and complex projects were at significant risk. While economic developers may not have thought about it, the Vested Rights Act is partly responsible for South Carolina’s emergence as an attractive place to start or build a business. And that has helped Realtors as well.
You can read the Western Upstate Association of REALTORS® Position Paper on Vested Rights by clicking here.
New Records Management Software
A new challenge for property owners is theft of real property through fraudulent property records transfers. Many property owners in the Western Upstate have suffered through the expensive litigation as a result.
Realtors have been leading advocates for addressing this problem and this week, Anderson County Council approved a new property records software system to help protect landowners from fraud. In January, the county Treasurer, Register of Deeds, Auditor proposed the new system, which will cost $1.5 million. The new system will have the added benefit of helping the county identify illegal real estate classifications and streamline the property tax reassessment process. John Benca, the county Auditor, is a Realtor.
New Zoning Referendum is August 11
If you live in Neal’s Creek or Shirley’s Store precincts in Anderson County, you should go to the polls next week to vote on a referendum to establish zoning in those precincts. The details:
- Polling: Tuesday, August 12, 7 a.m. – 7 p.m.
- Neal’s Creek polling place: Welfare Baptist Church, 2106 Bold Drive, Belton
- Shirley’s Store polling place: Ebenezer Fire Station, 1416 Due West Highway, Anderson
RPAC is Important
If real estate is your profession, advocacy is your business. And these advocacy results highlight the importance of supporting your association’s advocacy program. RPAC is an important element of that advocacy program.
About one-third of our members support RPAC, including some who do more—a lot more.
One member who has done a lot more is Carolann Newton of Jackson Stanley Realtors in Williamston. Carolann is a Major Investor, which means she contributes to RPAC at the $1,000 level each year. Carolann is also a member of the NAR RPAC Hall of Fame, having contributed more than $25,000 to RPAC during her career in real estate. Thank you, Carolann, for your leadership in supporting RPAC.
I encourage all Realtors to support RPAC, and we make it easy to do so. We include a voluntary $25 RPAC contribution ($100 for brokers) on your annual dues renewal. Simply pay it and you have supported RPAC. If you want to do more, that’s easy too.
Michael Dey, Director of Government Affairs