South Carolina H 4748: A HOUSE RESOLUTION TO RECOGNIZE AND HONOR WILLIAM CECIL ALLEN OF LATTA FOR HIS NOTEWORTHY ACHIEVEMENTS IN THE BOY SCOUTS OF AMERICA AND TO CONGRATULATE HIM UPON ACHIEVING THE PRESTIGIOUS RANK OF EAGLE SCOUT, THE HIGHEST AWARD IN SCOUTING.

Bill Text

2025-2026 Bill 4748 Text of Previous Version (Dec. 17, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 4748

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 
40-59-255 SO AS TO REQUIRE RESIDENTIAL BUILDERS AND RESIDENTIAL SPECIALTY 
CONTRACTORS TO HOLD CLIENT FUNDS IN ESCROW OR TRUST ACCOUNTS, TO ESTABLISH 
RELATED RECORDKEEPING REQUIREMENTS, TO PROHIBIT COMMINGLING, TO PROVIDE 
CRIMINAL AND CIVIL PENALTIES, AND TO AUTHORIZE THE DEPARTMENT OF LABOR, 
LICENSING AND REGULATION TO ENFORCE THE PROVISIONS OF THIS ACT.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. Article 1, Chapter 59, Title 40 of the S.C. Code is 
amended by adding:

 Section 
40-59-255. (A) For purposes of this 
section:

 (1) 
"Contractor" means a residential builder or residential specialty contractor 
licensed under this chapter.

 (2) 
"Client funds" means any money, deposit, or advance paid by a property owner 
for the construction, repair, renovation, or improvement of a residence.

 (3) 
"Escrow account" or "trust account" means a separate, identifiable, federally 
insured financial account maintained solely for the receipt and disbursement of 
client funds.

 (B)(1) A contractor who receives client 
funds prior to the completion of the work for which the funds were paid shall 
deposit those funds into a dedicated escrow or trust account established for 
the benefit of the client.

 (2) 
The account must:

 (a) 
be maintained at a federally insured financial institution;

 (b) 
be separate from all operating or personal accounts; and

 (c) 
contain no funds other than client funds, except nominal amounts necessary to 
cover bank charges.

 (C)(1) Client funds may be withdrawn or 
disbursed only for:

 (a) 
expenses directly associated with the client's residential project;

 (b) 
payment of subcontractors or suppliers involved with the project; or

 (c) 
return of unused funds to the client.

 (2) 
Contractors shall maintain contemporaneous, itemized records of all deposits, 
withdrawals, and transfers from the escrow or trust account.

 (3) 
Upon written request from the client or the Department of Labor, Licensing and 
Regulation, the contractor must provide a detailed accounting within fifteen 
days.

 (D)(1) A contractor may not:

 (a) 
commingle client funds with business operating or personal funds;

 (b) 
use client funds for any purpose unrelated to the client's project;

 (c) 
fail to deposit client funds into the required escrow or trust account;

 (d) 
make false or misleading statements regarding the location, use, or status of 
client funds.

 (2) 
Each violation constitutes a separate offense.

 (3)(a) a contractor who knowingly or 
wilfully violates this section and whose misuse involves less than ten thousand 
dollars is guilty of a misdemeanor, punishable by:

 (i) 
a fine not exceeding five thousand dollars;

 (ii) imprisonment for not more than 
three years; or

 (iii) both.

 (b) 
A contractor whose misuse involves ten thousand dollars or more is guilty of a 
felony, punishable by:

 (i) 
a fine not exceeding ten thousand dollars;

 (ii) imprisonment for not more than 
ten years; or

 (iii) both.

 (4) 
A court may order full restitution, including repayment of client funds, 
interest, consequential damages, and reasonable attorney's fees.

 (E)(1) The Department of Labor, Licensing 
and Regulation may:

 (a) 
investigate alleged violations of this article;

 (b) 
require production of escrow or trust account records;

 (c) 
impose civil penalties of up to five thousand dollars per violation;

 (d) 
suspend, refuse to renew, or revoke a residential builder or residential 
specialty contractor license.

 (2) 
A violation of this article constitutes misconduct under this chapter.

 (3) 
A client whose funds were not properly held, accounted for, or disbursed may 
bring a civil action for:

 (a) 
actual damages;

 (b) 
treble damages for wilful violations;

 (c) 
attorney's fees and court costs.

 (4) 
The remedies provided in this section are in addition to any other rights 
available under contract or law.

SECTION 2. This act takes effect one hundred 
eighty days after approval by the Governor, and applies to all residential 
construction contracts executed on or after that date.

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