Real Property – South Carolina Uniform Statutory Rule Against Perpetuities – Waiver Defense

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The South Carolina Uniform Statutory Rule Against Perpetuities (SCUSRAP) completely abolished the common law rule against perpetuities for nonvested property interests arising from non-donative transfers, rendering a perpetual commercial purchase option enforceable and remanding only the issue of whether Petitioner waived its rights under the option left for the circuit court to address in the first instance.

We reversed the court of appeals and remanded Respondent’s waiver defense to the circuit court.

The Court addressed a novel question concerning the scope of the SCUSRAP: whether the statute completely abolished the common law rule against perpetuities (CLRAP) as applied to nonvested property interests arising from non-donative transfers. The Court held that it did.

The dispute arose from a 2017 loan agreement in which White Interests Limited Partnership loaned $800,000 to Respondent Best for Last, LLC to purchase real property for a self-storage facility. As part of the transaction, Best granted White a freely assignable, perpetual option to purchase a 74.425% undivided interest in the property. The option was later assigned to Petitioner Spring Valley Interests, LLC. When Best sought to refinance the property, White exercised the option, triggering a dispute that ultimately caused the refinancing to collapse. Spring Valley sued for specific performance of the option, while Best counterclaimed that the option was void under both the SCUSRAP and the CLRAP.

The circuit court and court of appeals agreed with Best, reasoning that although the SCUSRAP superseded the CLRAP generally, it did not apply to nonvested property interests arising from non-donative transfers. Because such interests are expressly excluded from SCUSRAP’s vesting provisions under section 27-6-50(1), the lower courts concluded that the CLRAP continued to apply and rendered the perpetual option void.

The Supreme Court rejected that reasoning. Focusing first on statutory text, the Court emphasized section 27-6-80, which unequivocally states that the SCUSRAP “supersedes the common law rule against perpetuities.” The Court also relied on the title of the 1987 Act enacting the statute, which expressly states the legislature’s intent “to abolish the common law rule against perpetuities and replace it with a statutory rule.” This language, the Court held, clearly manifested legislative intent to eliminate the CLRAP altogether.

The Court further found support in the official comments to the Uniform Statutory Rule Against Perpetuities, upon which the SCUSRAP was modeled. Those comments explain that property interests excluded from the statutory rule, such as nonvested interests arising from non-donative transfers, are not subject to any rule against perpetuities, statutory or common law. Applying the CLRAP to interests expressly excluded from the statute would be illogical and inconsistent with legislative design.

Finally, the Court declined to follow contrary authority from North Carolina, noting differences in legislative history and emphasizing that South Carolina’s General Assembly clearly chose to abolish the CLRAP. Public policy concerns regarding restraints on alienability, the Court explained, are for the legislature, not the courts, to resolve.

Accordingly, the Supreme Court held that the option was not void under either the SCUSRAP or the CLRAP.

Reversed and remanded.

Spring Valley Interests LLC v. The Best for Last LLC (Lawyers Weekly No. 010-001-26, 9 pp.) (George C. James Jr., J.) Appealed from Richland County Circuit Court (Jocelyn Newman, J.) Carmen Vaughn Ganjehsani, of Richardson Plowden & Robinson, PA, of Columbia, and Kenneth Ray Raynor, of Raynor Law Firm, PLLC, of Charlotte, NC, for Petitioner. Kirby Darr Shealy III, of Adams and Reese LLP, of Columbia, for Respondent. South Carolina Supreme Court