South Carolina Real Estate Broker Exam — All Questions

Who must supervise the title search, document preparation, closing and disbursement in a South Carolina residential sale?

• a.The broker-in-charge of the listing firm
• b.A licensed title insurance producer
• c.A licensed South Carolina attorney✓
• d.The lender's in-house closing department

South Carolina's Supreme Court treats the steps of a residential real estate closing as the practice of law, so a licensed South Carolina attorney must supervise the title search and preparation of title documents, the closing itself, the instructions for recording, and the disbursement of funds; Doe v. McMaster (Op. No. 25508, 2003) held that a title company's search and document preparation for a lender "without direct attorney supervision, constitutes the unauthorized practice of law." Section 40-5-310 makes practicing law without membership in the South Carolina Bar a felony. A lender's in-house closing department cannot supply that supervision, which is the arrangement the court examined and rejected. The listing broker-in-charge supervises licensees and the firm's trust account under Section 40-57-135, not legal work, and Section 40-57-350(C)(1)(b)(iv) tells a licensee to send clients for expert advice beyond his own expertise. A title insurance producer sells a policy; the underwriting decision is not a substitute for an attorney's supervision of the closing.

Before closing a loan secured by a lien on the borrower's home, what must a South Carolina creditor do about the borrower's choice of lawyer?

• a.Leave the choice entirely to the real estate licensee
• b.Ascertain the borrower's preference and comply with it✓
• c.Assign the closing to the lender's own panel attorney
• d.Require the borrower to use the title insurer's agent

Section 37-10-102(a) of the Consumer Protection Code provides that where a loan secured by a lien on real estate is for a personal, family or household purpose, "the creditor must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor" and, outside Horizontal Property Act units, the insurance agent for hazard and flood cover, and must "comply with such preference." The creditor may satisfy this by putting the preference question on or with the credit application, or by written notice delivered or mailed within three business days of the application. Assigning the file to the lender's own panel attorney overrides the very choice the section protects. Requiring the title insurer's agent does the same for insurance, though the creditor may still demand reasonable security by way of mortgage title insurance from an acceptable company and reasonable closing procedures. The duty is the creditor's; the real estate licensee has no role in it, and Section 37-10-105 gives the borrower a civil remedy when it is ignored.

South Carolina's deed recording fee is one dollar eighty-five cents for each five hundred dollars of value. Who is primarily liable for it?

• a.The closing attorney, from the settlement proceeds
• b.The lender, as part of the recording package
• c.The grantor; the grantee is secondarily liable✓
• d.The grantee, with the grantor secondarily liable

Section 12-24-10(A) imposes the fee "for the privilege of recording a deed" at "one dollar eighty-five cents for each five hundred dollars, or fractional part of five hundred dollars, of the realty's value," and Section 12-24-20(A) makes it "the liability of the grantor, or the joint and several liability of the grantors, but the grantee is secondarily liable for the payment of the fee." Reversing the two states the exception as the rule: Section 12-24-20(B) shifts liability to the grantee only for a master-in-equity deed, a deed from a government body, or a deed from a tax-exempt qualified retirement plan. The closing attorney customarily remits the fee out of the settlement statement, but paying on a client's behalf is not the same as bearing the liability. The lender records its mortgage and pays ordinary recording charges; this fee attaches to the deed transferring the realty, and Section 12-24-30 defines the value it is measured against.

A South Carolina buyer will occupy the house as a legal residence. Which assessment ratio applies once that classification is granted?

• a.Six percent, instead of the four percent on other real property
• b.Ten and one-half percent, the rate for other personal property
• c.Four percent, but only after five years of continuous occupancy
• d.Four percent, instead of the six percent on other real property✓

Section 12-43-220(c)(1) taxes "the legal residence and not more than five acres contiguous thereto, when owned totally or in part in fee or by life estate and occupied by the owner of the interest" on an assessment equal to four percent of fair market value, while Section 12-43-220(e) puts "all other real property not herein provided for" at six percent. Stating the pair the other way round is the standard trap and would raise a homeowner’s bill by half. Ten and one-half percent is the ratio Section 12-43-220(f) sets for other personal property, which is a different class of property altogether. There is no five-year occupancy qualification: the owner-occupant need only have owned and occupied the residence as a legal residence and been domiciled there for some part of the tax year, and must apply to the county assessor — the classification does not follow the deed automatically, which is why it belongs on a buyer’s closing checklist. The value it is applied to also moves at closing: Section 12-37-3150(A)(1) makes a conveyance by deed an assessable transfer of interest, and Section 12-37-3140(A)(1)(b) then resets fair market value to the value applicable for December thirty-first of the year the transfer occurred.