House Bill 129. Monday found me in Room 132 at the Capitol for two hearings. The first, before the House Judiciary Subcommittee led by Representative Roger Lane of District 167, Chair of the House Reapportionment Committee, concerned House Bill 129. This Bill would prohibit so-called “transfer fee covenants” subject to certain exceptions for condominium and property owners’ associations. The lead sponsor for this Bill is Doug McKillip of District 115. Co-sponsors are Ed Lindsey of the 54th, also the House Majority Whip; Mark Hatfield of the 177th, Vice Chair of the House Judiciary Committee, Non-Civil; Stacey Evans of the 40th; and Wendell Willard of the 49th, Chair of the House Judiciary Committee. Much thanks to these Representatives.

Since this Bill is a Bar proposal, I testified at the hearing as co-chair of the Legislative Subcommittee of the Real Property Law Section. Interestingly, no one testified in opposition. Randy Lipshutz testified on behalf of the Community Association Institute supporting the bill but emphasizing the need to fine-tune some of the provisions to appropriately exclude from the prohibition of the bill fees paid to property owners associations not under the Georgia Property Owners Association Act. After the hearing Representative McKillip convened a small working group consisting of himself, Randy, Dianne Calloway (representing the title insurance industry), Ron Fennell (lobbyist for the land title insurance industry and the Community Association Institute) and me. We worked through revisions to the bill that I believe continue to fulfill the intention of the bill: to prohibit these fees subject only to legitimate fees payable to associations for the sole benefit of the associations. I look forward to the upcoming hearing of the revised bill before the Subcommittee, which I am hopeful will approve the Bill for submittal before the full House Judiciary Committee.

House Bill 110. In the afternoon another Subcommittee of the House Judiciary Committee, this one chaired by Representative Mark Jacobs of the 80th, Co-chair of the House Judiciary Committee, addressed House Bill 110, the sponsors of which include Representatives Jacobs, Willard and Lindsey, as well as Representatives Jay Powell of the 171st and Andy Welch of the 110th.

House Bill 110 proposes to impose certain requirements and limitations upon vacant property and foreclosed property registry ordinances. These ordinances are in force, and are springing up, throughout the country. See http://www.safeguardproperties.com. At least nine jurisdictions in Georgia have adopted or are considering registry ordinances. See http://www2.safeguardproperties.com/vpr/city?s=&st=GA&pp=20&t=&b=&p=0&l=20&id=&sd=1. Proponents of these registries view them as an additional “tool in the toolbox” to help local governments locate, contact and notify the owners of properties that are vacant or not code compliant. Some jurisdictions designate foreclosure as the event that subjects a property to a registration requirement; others vacancy. Some opponents of registries seek to prohibit them altogether as impinging upon property rights. Others recognize that registries may be a helpful local government tool but want uniformity of requirements, including fees.

Representative Jacobs, the drafter and the primary sponsor of the Bill, opted to designate vacancy as the sole basis for registration, the thought being that the circumstance of vacancy has a stronger nexus to code violations and community deterioration than does simply the occurrence of a foreclosure. Some critics of this approach argue that vacancy-based registries are unnecessarily difficult to implement because “vacancy” is a legally malleable term and casts too wide a net. Many jurisdictions, including Dekalb County, have opted foreclosure as the trigger. The thought here, at least in part, is that volumes of foreclosures are to a deteriorating community what a dead canary is to coal miners: an indicator that things are unhealthy and likely to get worse. Foreclosure is also a definable circumstance that provides a clearer entry point for registration.

After testimony and discussion of the Bill, Chairman Willard suggested the convening of a working group of the various stakeholders to determine what could and could not be agreed upon. Representative Jacobs concurred but instructed that the working group report back to him by the end of business on Thursday.

The group that met the next day included representatives of Georgia Municipal Association, Georgia Credit Union Affiliates, Georgia Apartment Association, Georgia Bankers Association, Community Bankers Association, Cobb County, Gwinnett County, Mortgage Bankers Association, Dekalb County, Council for Quality Growth, City of Atlanta and Georgia Association of Realtors.

By the end of the day, the consensus of the group was to allow foreclosure registries to the exclusion of vacant property registries, pretty much turning House Bill 110 on its head. All parties reached agreement on most of the substantive points, except limitations on fees.

Cracks in the consensus developed the next day, as those at the table disseminated to their constituencies the preliminary decisions. Particularly, cities and counties are very concerned about limitation of registries to foreclosed properties only. Some already have, and others are considering, vacancy-based ordinances.

Such was the substance of the report to Representative Jacobs. He and the Subcommittee must now determine the direction in which they wish to go.

House Bill 64. House Bill 64, also on the agenda for the Jacobs Subcommittee Monday afternoon, would revise O.C.G.A. § 13-1-11(a) (2) to provide that if a note or other evidence of indebtedness provides for the payment of reasonable attorney’s fees without specifying any specific percent, the provision shall be construed to mean an amount found by the court to be reasonable and necessary for asserting the rights of the aggrieved party. The Bill originated from recent cases in which attorneys’ fees awarded on the basis of the current statute far exceeded the fees actually incurred. Judging from the discussions of the Subcommittee members, the Bill may be revised to bifurcate the fee calculation, with the percentage calculation applying up to a certain fee amount and fees above that amount being subject to a reasonableness determination by the court.

Senate Bill 28. Senator Mitch Seabaugh introduced this bill to establish the estate of tenancies-by-the-entireties in Georgia, as an available means of protecting the interests of one spouse from the independent debts of the other. Senator Seabaugh is considering this Bill further in light of other discussions in the Senate regarding possibly increasing the homestead exemption. Both the title insurance companies and the family law practitioners believe that introduction of tenancy-by-the entireties in Georgia would be problematic. Increasing the homestead exemption may be a cleaner way to address the Senator’s concerns.