The bill H. 4748 aims to enhance the financial accountability of residential builders and specialty contractors in South Carolina by requiring them to hold client funds in dedicated escrow or trust accounts. It establishes clear definitions for key terms such as "contractor," "client funds," and "escrow account," and mandates that any client funds received prior to project completion must be deposited into these accounts. The bill outlines strict recordkeeping requirements, prohibiting the commingling of client funds with personal or business accounts, and specifies that withdrawals can only be made for project-related expenses or to return unused funds to clients.

Additionally, the bill introduces criminal and civil penalties for violations, including fines and imprisonment for misuse of client funds. The Department of Labor, Licensing and Regulation is granted authority to investigate violations, impose civil penalties, and take disciplinary actions against contractors. Clients are also empowered to pursue civil actions for damages if their funds are not properly managed. This legislation is set to take effect 180 days after the Governor's approval and will apply to all residential construction contracts executed thereafter.

Statutes affected:
12/17/2025: 40-59-255
Latest Version: 40-59-255