Following is a summary of legislation passed this year, and signed into law by the Governor, of particular interest to real estate practitioners (listed by bill numbers, first House Bills and then Senate Bills). The text and status of any bill may be accessed at http://www.legis.ga.gov/en-US/default.aspx. I prepared this summary with Gayle Camp. She and I are co-chairs of the legislative committee of the Real Property Law Section of the Georgia Bar.
Vacant Property & Foreclosure Registries. House Bill 110, enacted as Act 644, authorizes local governments to establish, and states standards for, registries of vacant or foreclosed properties. It preempts any conflicting requirements of registries formed prior to July 1, 2012. A registry may elicit only specified information (owner identification, agent identification, property identification, the transfer date and recording information). Registration in the case of a transfer by deed under power or deed-in-lieu may be accomplished by including the information required by registration in the deed, recording it within 60 days, and providing a copy of the recorded document to the registry. A registry may not require registration within 90 days of transfer pursuant to a deed under power or deed-in-lieu or after the first subsequent transfer. An owner may be required to update information within 30 days of a change. Administrative fees must reasonably approximate the operating costs of the registry and may not exceed $100 per registration, and the penalty for noncompliance may not exceed $1000. Registries must provide a procedure for owners to apply to have property removed if no longer vacant, or if sold after a foreclosure, and appeal procedures.
Recording Costs. House Bill 198, enacted as Act 604, removes the July 1, 2014 sunset date on the schedule of real property document filing fees set forth in O.C.G.A. § 15-6-77(f). But for this legislation, the cost of the recording of the first page of deeds, affidavits, releases, notices, certificates and cancellations would have decreased back to $5 from the current fee of $10 on July 1, 2014. (Note: While this code section states $9.50, there is an extra $.50 for the Superior & State Court Clerk Retirement Fund, which brings the total fee to $10.)
Real Property Records/Bonds to Discharge Liens. House Bill 665, enacted as Act 599, substantially revises the obligations of the superior court clerks, modifying several statutory provisions to accommodate digital and electronic filing and recording. Clerks may now maintain the general execution docket (O.C.G.A. § 9-12-81) and grantor and grantee indices (O.C.G.A § 15-6-61) in either paper or electronic form. (Note: The words “complete” and “printed” are deleted from the requirements for the grantor and grantee indices.) The statutory provision directing clerks to attach a piece of paper to filed documents without a three (3) inch margin (in order to create such margin), has been removed. The requirements for recording maps have changed and now refer to the standards of the State Board of Registration for Professional Engineers and Land Surveyors (O.C.G.A. § 15-6-67). (Note: planning officials in some counties contend that the plat revisions may allow developers to avoid otherwise-applicable subdivision platting requirements). Books containing records of instruments conveying personal property only may be destroyed after only 5 years now, rather than 15 (O.C.G.A. § 15-6-73). And, now a bond to discharge a lien must be approved by the superior court clerk, rather than being filed with the clerk; an owner or contractor may now be required to prove the value of a domicile that serves as the bond (O.C.G.A. § 44-14-363). Effective July 1. 2012.
Use Covenants. House Bill 728, enacted as Act 663, amends O.C.G.A. § 44-5-60 to provide that when a zoning ordinance, upon its initial enactment, expressly acknowledges the continuing application of a use covenant created prior to the adoption of the ordinance, the covenant will continue to be effective until expiration under its own terms. Effective July 1, 2012.
Partition. House Bill 744, enacted as Act 585, enacted the Uniform Partition of Heirs Property Act, to become effective January 1, 2013. Georgia is the second state, behindNevada, to enact this uniform law. The Act provides a different procedure for partition actions where “heirs property” is involved, separate from the existing partition law. “Heirs property” is defined as real property held by tenants in common, a specified portion of whom are related (as set forth in the new law.) This uniform law was drafted by the Uniform Law Commission in 2010 to address family owned land passed through intestacy and held by descendents as tenants in common, whose fractional interests had multiplied over time, and the effect of partition actions under the old law where a forced sale below market value was often the outcome. The law includes an initial valuation process, enhanced notice requirements and establishes the procedure to move through a hierarchy of remedies allowing a buyout opportunity for those who did not bring the action, and for market sale through a realtor listing, in addition to partition in kind or partition by public sale. This statute will bifurcate partition actions for now; perhaps if found effective, it will be broadened in the future to apply to all partitions. If you are interested in preparing a presentation on this new law, there are materials at www.gaappleseed.org, including a booklet “Heir Property in Georgia.
Conservation Use Property. House Bill 916, enacted as Act 680, amends O.C.G.A. § 48-5-7.4 to change certain qualifications and restrictions regarding conservation use covenants. One change is that property underlying a residence is now excluded as well as the residence, the amount of property excluded being the smallest lot size required by local zoning or 2 acres, whichever is less. Effective May 1, 2012.
Homestead Exemption. Senate Bill 117, enacted as Act 722, amends O.C.G.A. § 44-13-1 to increase the homestead exemption (from levy and sale) from $10,000 to $21,500 for a single debtor, and from $20,000 to $43,000 for a married debtor. Effective May 2, 2012.
Condominiums. Senate Bill 136, enacted as Act 723, amends O.C.G.A. § 44-3-101 to provide a procedure by which a condominium owner or owners, after notice and a 30 day opportunity to cure, may gain control of a condominium association if the declarant has failed to perform certain functions: incorporating the association, causing the board of directors to be appointed and officers elected, making information as to current officers and directors available to owners, holding meetings required by the bylaws, and promulgating annual operating budgets and assessments. Effective July 1, 2012.
Land Banks. Senate Bill 284, enacted as Act 729, authored by The Center for Community Progress, a national policy think tank, represents the work of a diverse coalition of cities, counties, community and neighborhood advocate and non-profit developers. It expands the statutory powers and funding sources for land bank authorities, which have existed inGeorgia for over 20 years. Existing land banks can continue to operate under the old statute or choose to be governed by the new statute. The new statute is designed to allow more collaboration among cities and counties, to allow land banks to divert tax revenues for a certain period after a vacant home is resold for the purpose of funding land bank operations, and to make it easier for land banks to acquire properties with delinquent taxes. Effective July 1, 2012.
Closing Protection Letters. Senate Bill 331, enacted as Act 734, amends O.C.G.A. § 33-3-4 to add closing protection letters to title insurance as an insurance product title companies may transact. It also adds O.C.G.A. § 3-7-8.1 to define allowable coverages, require that insurers file their premiums with the insurance commissioner, etc. So, CPLs have been recognized as insurance products and will be regulated by the State Insurance Commissioner. Effective May 2, 2012.
Foreclosure. Senate Bill 333, enacted as Act 735, amends 44-14-162.3 and 162.4 to make the statutory pre-foreclosure notice which has been required only for property being used as the debtor’s dwelling place, now requisite as to all property—residential or commercial– being foreclosed. Remember to include the recitation of notice in the deed under power. Effective July 1, 2012.
Residential Closings. Senate Bill 365, enacted as Act 744, is the result of a GRECAA (Georgia Residential Closing Attorneys Association) initiative, amending Georgia’s “Good Funds” statute, O.C.G.A. § 44-14-13 (which governs the disbursement of loan settlement proceeds and requires lenders to provide those proceeds to the settlement agent in a specific form at or before closing, for purchase money and refinance loans on residential property of not more than 4 units). The new law redefines “settlement agent” to include only “the lender or an active member of the State Bar of Georgia responsible for conducting the settlement and disbursing the closing proceeds.” It also imposes misdemeanor criminal penalties on anyone conducting a settlement or disbursing funds who is not the settlement agent. The statute already provided for a penalty to be paid in connection with a violation of the statute resulting in a loss, but now makes the penalty payable to the party suffering the loss, rather than to the borrower. Effective July 1, 2012.
This year was the second session of the 151st General Assembly. Any bills which were introduced during last year’s session or this year’s session, but were not passed by the end of this year’s session, are now dead. Next year’s session will begin fresh, with new bills being introduced.
House Bill 129, which proposed to prohibit transfer fee covenants subject to certain exceptions for condominiums and homeowner associations, was expected to become law this year but failed. It may be reintroduced again next year.