S.C. Code Ann. § 31-1-180
Limitations on actions by companies
Operative Text
No limited dividend housing company incorporated under this chapter shall: (1) acquire any real property or interest therein unless it shall first have obtained from the Secretary of Commerce a certificate that such acquisition is necessary or convenient for the public purpose defined in Section 31-1-140; (2) sell, transfer, assign or lease any real property without first having obtained the consent of the Secretary of Commerce, except that leases conforming to the regulations and rules of the Department of Commerce and for actual occupancy by the lessees may be made without the consent of the Secretary of Commerce; (3) pay interest returns on its mortgage indebtedness and its income debenture certificates at a higher rate than six percent per annum; (4) issue its stock, debentures and bonds covering any project undertaken by it in an amount greater in the aggregate than the total actual final cost of such project, including the lands, improvements, charges for financing and supervision approved by the Secretary of Commerce and interest and other carrying charges during construction and an allowance for working capital to be approved by the Secretary of Commerce but not exceeding three percent of the estimated cost or of the total actual final cost if the final cost of the project shall be greater than the estimated cost; (5) mortgage any real property without first having obtained the consent of the Secretary of Commerce; (6) issue any securities or evidences of indebtedness without first having obtained the approval of the Secretary of Commerce and the approval of the Director of the Department of Insurance, or his designee; (7) use any building erected or acquired by it for other than housing purposes, except that when permitted by law the story of the building above the cellar or basement and the space below such story may be used for stores, commercial, cooperative or community purposes and when permitted by law the roof may be used for cooperative or community purposes; (8) charge or accept any rental fee or other charge for housing accommodations in any building constructed, acquired, operated or managed by it in excess of the prices prescribed by the Secretary of Commerce; (9) enter into contracts for the construction of housing projects or for the payments of salaries to officers or employees except subject to the inspection and revision of the Secretary of Commerce and under such regulations as the Department of Commerce from time to time may prescribe; (10) voluntarily dissolve without first having obtained the consent of the Secretary of Commerce; or (11) make any guaranty without the approval of the Secretary of Commerce.
Section 31-1-180 of the South Carolina Code places a comprehensive set of restrictions on limited dividend housing companies chartered under Chapter 1 of Title 31. These companies may not acquire, sell, mortgage, or lease real property; issue stocks, bonds, or other securities; charge rents; enter construction or salary contracts; or dissolve voluntarily without first obtaining approval or consent from the Secretary of Commerce. Additionally, interest rates on mortgage debt and income debenture certificates are capped at six percent per annum, and securities issuances also require approval from the Director of the Department of Insurance.
Plain English — not legal advice.
Operators of limited dividend housing companies governed by S.C. Code Ann. § 31-1-180 are generally expected to seek and document Secretary of Commerce approval before undertaking virtually any significant corporate or real-property action, including property acquisitions, sales, mortgages, and securities issuances. Compliant operators also ensure that rental charges remain within the prices prescribed by the Secretary of Commerce and that interest rates on mortgage indebtedness do not exceed the six-percent annual cap. Routine occupancy leases that conform to Department of Commerce regulations represent a narrow exception that does not require separate Secretary of Commerce consent.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants residing in housing provided by a limited dividend housing company subject to § 31-1-180 benefit from rent-control protections built directly into the statute, since these companies are prohibited from charging rents above the prices set by the Secretary of Commerce. If a tenant believes a company is charging fees in excess of those prescribed limits, general enforcement paths may include filing a complaint with the South Carolina Department of Commerce or consulting a tenant-rights organization familiar with state housing law. Tenants may also wish to review the Department of Commerce's regulations and rules, which shape what lease terms are permissible under this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 16, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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