Lewis v. Premium Investment Corp., 351 S.C. 167, 568 S.E.2d 361 (2002)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: 351 S.C. 167, 568 S.E.2d 361 (2002) (Op. No. 25510); aff’g as modified Lewis v. Premium Inv. Corp., 341 S.C. 539, 535 S.E.2d 139 (Ct. App. 2000).
- Court / Year: Supreme Court of South Carolina, 2002.
- Topic tags: forfeiture · equitable_interest · redemption · liquidated_damages_penalty
- Facts: In 1976 William Lewis entered an installment land contract to buy real estate in North Myrtle Beach from Premium Investment Corp. The contract contained a strict-forfeiture clause: on a default continuing 30 days, the seller could declare the contract terminated and retain all prior payments as rent. Lewis paid 141 of roughly 182 monthly installments (through July 1988), then defaulted. The seller mailed a cancellation notice in October 1989 (returned unclaimed). Lewis later tendered the balance in 1996; the seller refused and asserted the forfeiture.
- Holding: A court of equity can relieve a defaulting purchaser from a strict forfeiture provision in an installment land contract and grant an opportunity to redeem when equity so demands. A forfeiture clause may operate as an unenforceable penalty; in that circumstance it is inequitable to enforce forfeiture without first allowing the purchaser to redeem by paying the entire purchase price. The Court affirmed the Court of Appeals as modified and remanded for the trial court to apply the equitable factors.
- Reasoning: South Carolina equity disfavors forfeitures and penalties. Where the purchaser has built substantial equity, the sum forfeited can vastly exceed the seller’s actual damages, making the clause a penalty rather than enforceable liquidated damages. The Court identified the factors that govern whether to grant the equitable right of redemption: (1) the amount of the purchaser’s equity in the property; (2) the length of, and reasons for, the default; (3) the relationship between the installment payments and the property’s fair rental value; (4) the value of improvements made by the purchaser; (5) the overall fairness of enforcing the forfeiture; and (6) the total the purchaser stands to forfeit versus the seller’s actual damages.
- Practical impact for CFD operators/buyers: This is the controlling South Carolina authority on contract-for-deed default. It establishes that a defaulting CFD buyer holds an equitable right of redemption that a strict-forfeiture clause cannot extinguish by its own terms. In practice a South Carolina seller cannot simply cancel-and-retain and evict; where the buyer has meaningful equity the seller must proceed through the courts — functionally foreclosing the buyer’s equity of redemption like a mortgage (South Carolina is a judicial-foreclosure-only state) — and the buyer may redeem by paying the balance. Operators should treat a substantially paid CFD as a mortgage-equivalent, not a forfeitable instrument.
- Good-law status: Good law. Cited consistently as the leading South Carolina installment-land-contract / equitable-redemption decision.
- Source (retrieved): https://www.sccourts.org/opinions/htmlfiles/SC/25510.htm · corroborated at https://www.quimbee.com/cases/lewis-v-premium-investment-corp · Verified: 2026-06-08
Jurisdictions that follow / cite: south-carolina
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.