Bill > H4748

This bill requires residential builders and residential specialty contractors in South Carolina to handle client funds (money paid by property owners for construction or renovation projects) with strict financial accountability. Specifically, contractors must deposit client funds into a separate, federally insured escrow or trust account that contains only project-related funds, with minimal exceptions for bank charges. Contractors are prohibited from commingling these funds with personal or business accounts and can only withdraw funds for project expenses, paying subcontractors, or returning unused money to the client. The bill establishes detailed recordkeeping requirements, mandating that contractors maintain itemized records of all account transactions and provide detailed accountings within 15 days when requested. Violations can result in significant penalties, including criminal charges (misdemeanors for misuse under $10,000 and felonies for amounts over $10,000), potential imprisonment, fines up to $10,000, and mandatory restitution. The Department of Labor, Licensing and Regulation is authorized to investigate violations, impose civil penalties up to $5,000 per violation, and potentially suspend or revoke the contractor's license. Clients who are harmed by improper fund management can also pursue civil actions for damages. The law will take effect 180 days after gubernatorial approval and will apply to all residential construction contracts executed after that date.

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https://www.scstatehouse.gov/billsearch.php?billnumbers=4748&session=126&summary=B