Vol. 12, No. 2, Pg. 32. What You Need to Know About State Land Sale Regulations.

• Author: By W. Leighton Lord III

South Carolina Lawyer

2000.

Vol. 12, No. 2, Pg. 32.

What You Need to Know About State Land Sale Regulations

32What You Need to Know About State Land Sale RegulationsBy W. Leighton Lord IIIRetirement is big business in the state of South Carolina. For reasons that are obvious to those of us who live here, the state is an extremely attractive place to retire. The number of Midwesterners and Northeasterners retiring in South Carolina increases every year. In turn, many South Carolina lawyers directly benefit from this retirement industry.

34One area from which lawyers benefit is the representation of the developers who develop and build the planned subdivisions and condominium projects that are most attractive to the average retiree. Lawyers tend to get involved in every aspect of the project-the purchase of the initial property, the financing and development of the infrastructure and the actual sale of the lots to individuals.

One extremely important aspect of this process that lawyers tend not to get involved in is the marketing of condominium units, lots and completed houses to out of state residents. Indeed most developers and marketers are unaware that they need to talk to their lawyer before marketing their project outside of South Carolina.

A surprising number of developers and lawyers are unaware that there is an extensive body of state law that regulates the marketing of out of state real property. These regulatory schemes are most extensive in states such as New Jersey, New York, Michigan and Connecticut, where South Carolina developers tend to market the heaviest. What is clear is that every lawyer who represents anyone who develops property with the hope of selling that property to out of state residents needs to be aware of the various state land sale regulatory schemes.

State land sale regulations go back to the '70s when Florida swampland was being sold to the naive and unsuspecting residents of states like New York. These cases of outright fraud were what most likely inspired a great deal of the land sale regulation legislation. On top of that was the problem of well-meaning developers who would start a project, sell lots to collect seed money for the infrastructure and then, regardless of good intentions, go under before the infrastructure could be completed. The citizen of Connecticut would then be stuck with a lot that had no water or sewer hookup and no access.

Various state legislators decided that if a developer or marketer wanted to come into their state to try to sell a lot, home or condominium unit to one of their citizens, they had to register that land so the state's regulators couldbetter protect its citizens. In some ways the states simply followed the federal government, which also regulates interstate land sales through the Interstate Land Sales Act, known as a HUD filing. The state land sale registrations are similar to the HUD filings for single-family developments. Don't be confused, however. A HUD...