Below is the summary of selected Georgia legislative issues that I will present tomorrow at the Real Property Law Institute sponsored by the Institute of Continuing Legal Education in Georgia and the Real Property Law Section of the State Bar of Georgia.

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SELECTED CURRENT LEGISLATION

This year was the first session of the 151st General Assembly. Any extant bill not passed or defeated this year remains on the legislative agenda for next year. The text and legislative history of all the bills are available at http://www.legis.ga.gov/Legislation/en-US/Search.aspx.

Two bills followed by the Legislative Subcommittee of the Real Property Law Section passed both the House and the Senate. One was House Bill 117, which, unless vetoed by the Governor, will amend subsection (b) of O.C.G.A.§8-7-128 to specify that the person or entity identified as the seller on the settlement statement shall be considered the seller for all purposes regarding withholding of sums due nonresidents.

House Bill 239, which also passed both Houses, includes a revision to paragraph (5) of subsection (a) of O.C.G.A. § 7-1-1001, Currently, there is an exemption from the mortgage loan originator licensing requirement of the federal SAFE ACT (and it’s local corollary, the Georgia Residential Mortgage Act) for certain persons who negotiate the terms of a loan. If enacted, the exemption changes the language of “A licensed attorney” to “An attorney licensed to practice law in the state of Georgia.” Upon final enactment of this provision, only Georgia licensed attorneys will be able to negotiate loan modifications and short sales. While helpful, this revision does not address the difficulty of the limitation that the work must be “ancillary” to the attorney’s representation. Initially, the Georgia Department of Banking and Finance construed this language very narrowly to refer only to attorneys negotiating loan modifications or short sales in connection with a litigation or bankruptcy matter. The Department has moderated its position and now interprets the language to exempt attorneys that do this type of work as part of their regular law practice but do not advertise a loan modification or short sale “mill”. Also remaining as an issue is the meaning of “compensated by a lender, a mortgage broker, or other mortgage loan originator or by any agent of such lender, mortgage broker, or other mortgage loan originator.”

These bills of interest remain on the legislative agenda for the next session:

House Bill 64 proposes to amend O.C.G.A. §13-1-11 to add a new subsection (b) to give a party in a civil action the right to ask the court to determine the reasonableness of fees exceeding $10,000 computed under paragraph (a) (2). Upon such petition, the court shall determine the fee amount “reasonable and necessary for asserting the rights of the party requesting attorney’s fees.”

House Bill 110 intends to regulate foreclosure and vacant property registries implemented by counties and municipalities. This bill, sponsored by Representative Mike Jacobs, turned out to be very contentious. Compare the initial version of the bill, bearing the heading “LC 29 4495ER”, with the latest version of the bill, bearing the heading “LC 29 4852S.” This bill pits the realtors and lending institutions against the local governments.

House Bill 129 intends to prohibit so-called transfer fee covenants, except in certain limited specified circumstances. This bill is an effort of the State Bar and the Real Property Law Section. Representative Doug McKillip added Section 1 of the bill, regarding subdivision of designated historic properties, but agreed to drop it when it became controversial and threatened passage of the Bill. When the General Assembly reconvenes, the Bill should not include that Section.

House Bill 245 would require that any surety or cosigner on a loan obligation be notified of default at the same time that the principal is notified.

House Bill 465 attempts to specify the proper corporate execution of documents generally and transfers of security deeds specifically.

Senate Bill 62 would require consent of the General Assembly for any transfer of private property to any other state, territory, or nation, or to the federal government, which would result in an extinguishment or diminution of the exercise of state sovereignty or jurisdiction. I understand that the primary motivation of this bill is to prohibit sale of property to a Native American tribe or nation for casino purposes.

Senate Bill 117 proposes to increase the amounts of personal exemptions. The sponsors proposed this bill at least in part as an alternative to Senate Bill 28, another effort to make available the estate of tenancy-by-the-entireties in Georgia.

Senate Bill 136 proposes to provide a mechanism for owners under a condominium association to take control ownership of the association upon failure of the declarant to perform certain actions. The bill as originally filed provided that liens under a condominium association or statutory property owner’s association would be prior to a security deed to the extent of association fees payable for the 12-month period preceding the foreclosure or deed in lieu of foreclosure. The bankers killed those provisions.

Senate Bill 234 proposes to require purchasers of tax executions to pursue certain minimum due diligence efforts to locate delinquent taxpayers and to notify taxpayers within thirty days of the transfer. It also provides requirements for cancellation of an execution upon determination of error and requires recordation of notice of foreclosure of the right to redeem.

Senate Bill 284 proposes to update the Georgia Land Bank statutory framework to make available to Georgia land banks powers now provided by subsequent generations of land bank legislation in other states.

OTHER ISSUES AND INITIATIVES

The Legislative Subcommittee will monitor the foregoing bills. The Subcommittee will also consider the following issues:

1. Confirming the enforceability of declarations of easements over property of a common owner after Gilbert v. Fine, 288 Ga. App. 20 (2007);

2. Requiring that purchasers of tax deeds provide contact information for notice purposes;

3. Requiring that recorded instruments include the name and address of the preparer;

4. Establishing recording and other requirements for water and possibly other utility liens;

5. Considering amendments to O.C.G.A. § 44-14-33 in light of the holding of the Georgia Supreme Court in U.S. Bank National Association v. Gordon , which held that a security deed actually filed and recorded, and accurately indexed, does not provide constructive notice to subsequent bona fide purchasers if it lacks attestation by both a notary public and also an unofficial witness;

6. Considering a Georgia version of the Uniform Partition of Heirs Property Act (see http://www.nccusl.org/Act.aspx?title=Partition%20of%20Heirs%20Property%20Act), which Georgia Appleseed (http://www.gaappleseed.org) hopes to introduce next year.

Lastly, Scott Logan (a member of the RPLS Executive Committee and Legislative Subcommittee), Deborah Bailey (a member of the Legislative Subcommittee) and Tim Minors of Old Republic Title Insurance Company are working diligently with the Georgia Superior Court Clerks Cooperative Authority toward implementation of the Authority’s efiling initiative. A summary of the initiative is available at http://www.gsccca.org/efiling/default.asp. The Authority’s efforts have revolutionized the practice of real property law in the State over the past few years, and efiling will only continue that contribution.