Folly Beach Owner Fights Back After Losing Rental License

When her husband died ten years ago, Paulette Sigmon bought a beach house — a little refuge on Folly Beach that could also help pay the bills.

It wasn’t just a dream home; it was a plan. The property at 116 E. Huron Ave. would serve as a short-term rental, generating steady income through a local management company. For years, it did. Until it didn’t.

Now, Sigmon is suing that company — Vacasa South Carolina — and two of its managers, accusing them of failing to renew her rental license. That alleged oversight cost her a lucrative short-term rental permit, which she says wiped out as much as $300,000 a year in income.

“She’ll never get that back,” Sigmon’s attorney Bijan Ghom told the Post & Courier.

The case, filed Sept. 5 in Charleston County Circuit Court, is about more than one homeowner’s lost permit. It’s the latest flashpoint in the ongoing fallout from Folly Beach’s short-term rental cap — a local policy that continues to divide this tight-knit barrier island two years after voters approved it.

In 2023, Folly Beach voters narrowly approved a limit of 800 short-term rental (STR) licenses — a move meant to protect the island’s residential feel and reduce tourist churn.

Before that, over 1,000 investor-owned STRs operated freely. Now, with the cap locked in place and no new licenses transferring with sales, dozens of homeowners like Sigmon find themselves stranded — owning houses they can no longer legally rent out short-term.

For investors who bought beach properties banking on that income, it’s been a financial gut punch.

More than 185 owners now sit on a waiting list for the chance to get an STR permit. Not one has made it off the list since the cap began.

Sigmon, who lives in downtown Charleston, purchased her Folly home for $550,000 in 2015. When a fire destroyed it in 2021, she rebuilt — only to lose her STR license the next year when, she alleges, her property managers failed to renew it.

Without that license, her home can only be rented out 72 days a year.

In her lawsuit, Sigmon seeks actual and punitive damages — plus treble damages, which could triple any financial award if a jury agrees the company acted negligently.

Vacasa has not commented on the case.

Folly’s real estate market, once a playground for investors, has cooled dramatically.

In September 2025, just 8 homes sold — down from a dozen in a typical pre-pandemic month. Some properties now linger for months, selling for much less than their original asking price.

With interest rates up and rental restrictions in place, many second-home owners can’t sell — or won’t, not at today’s prices.

“You’ve got people sitting on multimillion-dollar mortgages with no rental income,” Ghom said. “Who’s going to buy that?”

Supporters of the cap argue it’s brought sanity back to the island — fewer party houses, less congestion, quieter streets.

Opponents see it differently: a blow to property rights and livelihoods.

The vote that set it all in motion passed with just 53% of support — and only full-time residents could cast ballots, leaving part-time owners like Sigmon without a voice.

Two years later, the island still feels the ripple. Lawsuits, lost income, and homes that sit in limbo — all part of the uneasy balance between community preservation and economic reality.

For now, Sigmon’s rebuilt beach house stands ready but idle. The surf still hums, the salt still hangs in the air — but the rental calendar stays blank.

And on Folly Beach, that silence speaks volumes.