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H 5522

Homeowner Contract Transparency and Fair Dispute Resolution Act

2025-2026 Regular Session Introduced by Tommy Pope

Requires sellers to disclose all home purchase documents with dispute resolution provisions or legal waivers before closing, in clear, separate, signed form.

Referred to Committee on Labor, Commerce and Industry
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Bill Summary · H 5522

Summary of H 5522 (2025-2026) – Homeowner Contract Transparency and Fair Dispute Resolution Act (South Carolina)

Purpose and intent

  • Introduces new Article 3 to Chapter 50, Title 27 of the South Carolina Code.
  • The bill aims to increase transparency around home purchase documents and dispute resolution provisions, ensuring buyers can review them before closing.
  • Balances fairness and informed consent without banning arbitration or other alternative dispute resolution methods.
  • Establishes duties for sellers and the potential professional accountability for closing attorneys.

Key provisions and changes

Definitions and scope

  • Defines terms for the article:
    • "Residential real estate transaction": sale of property with 1–4 dwelling units (including newly constructed homes).
    • "Seller": builder, developer, or any person/entity transferring residential property.
    • "Buyer": natural person acquiring property for personal, family, or household use.
    • "Home purchase documents": all written documents related to the transaction (purchase agreements, construction contracts, warranty documents, closing documents, addenda, etc.).
    • "Dispute resolution provision": any clause directing arbitration, mediation, or limiting forum/method for disputes.
    • "Legal waiver": waivers of jury trial, court access, or other rights.

Disclosure and timing requirements

  • Sellers must provide all home purchase documents containing dispute resolution provisions or legal waivers no later than the earlier of:
    • Execution of the purchase agreement, or
    • Ten calendar days before closing.
  • Delivery must include the complete and final form (not summaries or excerpts).
  • If a dispute resolution provision or legal waiver changes after delivery, redelivery with a new buyer acknowledgment is required.

Content standards for dispute resolution provisions and waivers

  • Dispute resolution provisions must:
    • Identify a specific accessible forum;
    • Provide enough information to initiate a claim (administering organization, applicable rules, and clear initiation method);
    • Not impose impracticable or inaccessible conditions.

  • Any noncompliant dispute resolution provision is void and unenforceable.

  • Written disclosure of legal waivers must be provided by the same timing as above:

    • In a separate, clearly labeled document;
    • In plain language;
    • Identifying each waiver and its effect.

  • Legal waivers first presented at closing are presumed void/unenforceable unless the seller proves, by clear and convincing evidence, that the buyer had a meaningful opportunity to review and voluntarily agreed.

  • Any noncompliant dispute resolution provision or waiver is void ab initio (never enforceable).

Documentation and acknowledgment

  • Dispute resolution provisions and legal waivers must be:
    • Set forth in a separate document or separately titled section; and
    • Signed or initialed separately by the buyer.
  • Merely including the provision in a larger document without separate acknowledgment renders it void/unenforceable.

Enforcement and remedies

  • Buyers may sue in circuit court to enforce the statute.
  • Courts may:
    • Declare noncompliant provisions void/unenforceable;
    • Award actual damages;
    • Award reasonable attorney’s fees and costs;
    • Grant other appropriate relief.

Attorney conduct and closing practice

  • Attorneys licensed to conduct residential real estate closings may not proceed with a closing unless the seller has complied with all requirements of the act.
  • Noncompliance can subject the attorney to disciplinary action under the Rules of Professional Conduct.
  • Closings conducted in violation do not waive the buyer’s rights under the act and may render noncompliant provisions void/unenforceable.

Who is affected

  • Buyers: Enhanced rights to review and understand dispute resolution provisions and waivers; greater protection against last-minute or unclear terms.
  • Sellers (including builders and developers): New disclosure duties, separate documentation requirements, and potential liability for noncompliance.
  • Closing attorneys: Potential disciplinary action for noncompliance; required to ensure seller compliance before closing.
  • Courts: New basis to void noncompliant provisions and award damages or fees.

Procedural and timeline aspects

  • Effective date: The act takes effect upon the Governor’s approval.
  • Applicability: Applies to residential real estate transactions entered into on or after the effective date.
  • Compliance timing: All home purchase documents containing dispute resolution provisions or waivers must be delivered no later than the earlier of the purchase agreement execution or 10 days before closing.
  • Post-delivery changes: Any material change requires redelivery and a new buyer acknowledgment.

Overall impact

  • Aims to improve transparency and informed consent in residential real estate transactions.
  • Seeks to reduce the prevalence of last-minute or hidden dispute resolution clauses and waivers.
  • Establishes clearer procedural safeguards for buyers, with concrete penalties and remedies for noncompliance.

Compiled from official sources — confirm details with the bill’s official record.

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