COLUMBIA, S.C. — On June 2, House Bill 4548 was ratified and with it came amendments to South Carolina’s closing fee laws. In accordance with the new law, the Department of Consumer Affairs will now determine whether the amount a dealer charges in closing fees is reasonable or unreasonable.

The changes took effect on June 3, however, dealers have 30 days to comply. After July 3, any dealer who wants to charge a closing fee will have to send a “written notice to the Department of Consumer Affairs of the maximum amount of a closing fee the dealer intends to charge on an annual basis."

If the amount is at or below $225, the fee will be considered reasonable, in compliance with the new law, and will be approved by the department. If the closing fee exceeds $225, it will be considered unreasonable and will be reviewed by the department.

During this review period, the department will review all the administrative expenses, costs, staff supplies, materials and financial work involved in the sale of a vehicle to determine if the proposed fee in excess of $225 is reasonable. If the department reviews all the factors that go into a closing fee and determine the price is fair, it will allow the stated fee. However, if it reviews all materials and determines it is unreasonable, it will send a written notice — within 30 days of receiving the dealer’s notice — to the dealer detailing its findings. From there, it may require the fee to be reduced or ask the dealer to send a new amount for review.

As stated in the amendment, a dealer will be authorized at any point of this process to submit a new closing fee that is equal or less than $225, which is not subject to review. Additionally, during the review period, a dealer is also authorized to charge a closing fee that is equal or less than the last closing fee that was authorized by the department.

“If the department finds that a closing fee is not reasonable, the motor vehicle dealer may request a hearing in accordance with the Administrative Procedures Act,” the amendment stated.

Amendments were also made to the closing fee registration fee that dealers pay every year to the department. Dealers will now have until Jan. 31 to pay the annual registration fee of $10. The department is able to change the amount dealers owe for registration every year; however, the amendment has set a cap at $25.

As always, the closing fee must still be included in the advertised price of the car, disclosed on the sales contract and displayed in a conspicuous location at a dealership.

The change comes more than eight months after the South Carolina Supreme Court upheld a jury court's nine-year-old ruling that the "document preparation" fee South Carolina's Hendrick Honda of Easley charged over a four-year period starting in August 2002 violated the state's Dealers Act, which prohibits dealers from engaging in any action "which is arbitrary, in bad faith or unconscionable."