S.C. Code Ann. § 31-1-620
Payments covered by rentals
Operative Text
The payments to be made by such corporation shall be: (1) all fixed charges and all operating and maintenance charges and expenses which shall include taxes, assessments, insurance, amortization charges in amounts approved by the director to amortize the mortgage indebtedness in whole or in part, depreciation charges if, when and to the extent deemed necessary by the director, reserves, sinking fund and corporate expenses essential to the operation and management of the project in amounts approved by the director; (2) a dividend not exceeding the maximum fixed by this chapter upon the stock of the corporation allotted to the project by the director; and (3) when feasible in the judgment of the director, a sinking fund in an amount to be fixed by the director for the gradual retirement of the stock and income debentures of the corporation to the extent permitted by this chapter.
Section 31-1-620 of the South Carolina Code defines the categories of payments that a limited-dividend housing corporation must make from the rentals it collects. These payments fall into three buckets: (1) all fixed, operating, and maintenance costs—including taxes, insurance, amortization, depreciation, reserves, and essential corporate expenses, each in amounts the director approves; (2) a dividend on corporate stock, capped at the maximum rate set by the chapter; and (3) when the director considers it feasible, a sinking fund contribution to gradually retire the corporation's stock and income debentures. The provision ensures that rental income is channeled toward legitimate project costs and capped investor returns rather than unconstrained profit.
Plain English — not legal advice.
Operators of limited-dividend housing corporations subject to S.C. Code Ann. § 31-1-620 generally structure their financial planning around the three payment categories the statute enumerates. Compliant operators seek director approval for amortization, depreciation, reserve, and corporate-expense amounts before finalizing budgets, and they ensure that any dividend paid on project-allocated stock does not exceed the chapter's stated maximum. Maintaining clear documentation of each approved payment category—and any sinking fund contributions the director has authorized—supports ongoing compliance with the director's oversight role under this provision.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
S.C. Code Ann. § 31-1-620 is relevant to tenants living in projects operated by limited-dividend housing corporations because it governs how rental income must be allocated, including caps on investor dividends. Because the director must approve key expense amounts and dividend rates, tenants who believe a corporation is collecting rents that exceed what is needed to cover the approved payment categories may have grounds to raise that concern with the appropriate state housing authority. Tenant-rights organizations familiar with South Carolina's limited-dividend housing framework can help residents understand what records and approvals should be on file under this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 16, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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