The South Carolina Court of Appeals has handed down two separate decisions that have the potential to affect both quality of life and property ownership on Sullivan's Island.
In a 2-1 ruling on Feb. 18, the Court of Appeals overturned a Circuit Court decision that SC Lighthouse, doing business as Pacaso, a California-based company that sells fractional ownerships in luxury homes, was operating as a short-term rental on the island, which banned short-term vacation rentals around 25 years ago. According to the Appeals Court decision, selling shares of the vacation home "does not constitute commercial use of the property."
A week later, on Feb. 25, the Appeals Court upheld a Circuit Court ruling that the town's Oct. 7, 2020, settlement agreement in Bluestein vs. Sullivans's Island concerning property abutting the Maritime Forest is invalid. As part of the agreement, the town opted to settle the lawsuit by implementing a "selective thinning" plan for the Forest that would consist of the removal and trimming of vegetation on the accreted land.
The parties in the long-term lawsuit stipulated that the settlement agreement could not be "modified or amended, nor could any of its provisions be waived, except upon mutual agreement of all parties or their authorized agents in writing."
The agreement also provided that it would be “binding upon and inure to the benefit of all the parties, and their heirs, successors and assigns.”
However, after a new City Council was elected in May 2021, the Town brought a declaratory judgment action against Property Owners in February 2022 seeking an order that the settlement agreement was invalid and unenforceable, arguing that it unfairly bound future councils to this agreement.
The Court of Appeals sided with the town, finding, “Our courts have consistently invalidated contracts that bind future governing bodies because the contracts involved the bodies’ legislative functions or governmental powers.”