Myrtle Beach resort’s rental lawsuit causing long-delayed paychecks, HOA says
At a Myrtle Beach resort, a lawsuit opposing a city ban regarding long-term rentals could be the reason employees haven’t been paid in months.
Myrtle Beach banned converting short-term rentals into long-term ones in December 2024, in hopes of protecting tax revenue, The Sun News previously reported. In February 2025, that decision was met with a lawsuit claiming the moratorium harmed operations at the Sandcastle Oceanfront Resort South Beach.
According to reporting by WBTW, Sandcastle Resort employees have been without pay for months, leading to financial stress and resignations. The federal lawsuit against the city is reportedly being blamed by a former HOA official for the delayed checks.
The Sandcastle Resort HOA did not immediately respond to a request for comment sent Friday afternoon.
Why Myrtle Beach is being sued for long-term rentals moratorium
MBSC Property South, LLC, a Delaware-based company that owns and manages over 200 condominium units at the Sandcastle Oceanfront Resort at 2207 S. Ocean Boulevard, claims in the lawsuit that the city’s moratorium caused it losses of roughly $10 million, and projected losses of about $6 million. MBSC Property South purchased the property for $16.9 million in late 2022.
The suit claims that the rule prevented the company from obtaining long-term rental business licensing for the resort, and that it also prevented them from receiving Project-Based Housing Choice Vouchers from the Myrtle Beach Housing Authority for affordable housing.
The city enacted the ban with a new coning overlay, which banned rental conversions for properties bigger than single-family homes or duplexes east of Kings Highway and near the oceanfront.
The lawsuit, filed in South Carolina District Court, also claims that the new rental rule and city zoning overlay violate the company’s state and federal rights.
Employees go without pay amid federal rentals lawsuit
Employees at the resort have reportedly gone without pay for their work since around the Thanksgiving holiday. Since then, they have allegedly completed thousands of dollars worth of work that have gone uncompensated.
This has led some employees to resign from their posts at the resort.
According to WBTW, a former HOA president who was in charge of employee paychecks claimed there isn’t any money available because of the ongoing litigation, leading to the delays in pay.
This story was originally published January 30, 2026 at 2:10 PM.
