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2025-2026 Bill 4748: Residential contractors and residential specialty contractors - South Carolina Legislature Online
South Carolina General Assembly
126th Session, 2025-2026
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H. 4748
STATUS INFORMATION
General Bill
Sponsors: Reps. Pope, C. Mitchell and Edgerton
Document Path: LC-0535WAB26.docx
Introduced in the House on January 13, 2026
Currently residing in the House Committee on
Labor, Commerce and Industry
Summary: Residential contractors and residential specialty contractors
HISTORY OF LEGISLATIVE ACTIONS
Date
Body
Action Description with journal page number
12/16/2025
House
Prefiled
12/16/2025
House
Referred to Committee on
Labor, Commerce and Industry
1/13/2026
House
Introduced and read first time (
House Journal-page 76
)
1/13/2026
House
Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 76
)
View the latest
legislative information
at the website
VERSIONS OF THIS BILL
12/17/2025
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.
B
e it enacted by the
General Assembly of the State of South Carolina:
S
ECTION 1.
A
rticle 1, Chapter 59, Title 40 of the S.C. Code is
amended by adding:
S
ection
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.
S
ECTION 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.
----XX----
This web page was last updated on January 13, 2026 at 2:39 PM