Foreclosure Deed Recording Process in Georgia
Saturday August, 2014 03:14 PM
Foreclosure Deed Recording Process in Georgia
Foreclosure in Georgia is a non-judicial process that requires a four week publication in the county organ before the property is cried out on the courthouse steps on the first Tuesday of the month.
Foreclosure deeds in Georgia are typically entitled “Foreclosure Deed” or “Deed Under Power.” The term “Deed Under Power” is derived from the power of sale clause found in the underlying mortgage instrument. The borrower gives the lender power to sell the property in the event of borrower’s default under the terms of the note or security instrument. In Georgia, the security instrument is typically either a “Deed to Secure Debt” or “Security Deed.”
Purchasers of property at Georgia foreclosure sales may receive foreclosure deeds within thirty days of the foreclosure sale. However, Georgia law provides a thirty (30) day period for the lender to rescind the foreclosure sale for statutory cause. Georgia law requires foreclosure deeds to be recorded with ninety (90) days from the date of foreclosure. However, there is no statutory enforcement for this requirement.
Georgia law does not specify whether the lender or the purchaser has the recording obligation. In practice, most lenders tender an unrecorded foreclosure deed to the purchaser. Foreclosure deeds are commonly delivered to purchasers between thirty (30) and ninety (90) days following the foreclosure sale.
If the foreclosing lender has not issued the foreclosure deed and the purchaser wishes to resell the property, the purchaser has few options other than to wait to receive the deed. However, if the lender refuses or fails to provide the deed after thirty days, the lender may be liable to the purchaser for damages. If the deed has been issued, but lost or misplaced, however, it may be possible to obtain permission from a title insurer to issue policies on a recorded copy of the document on the condition that the closing attorney attempts to secure a duplicate original.
CHRIS PAHL
Real Estate Attorney
945 E Paces Ferry Rd
Suite 2250
Atlanta, GA 30326
Tel. +1 (678) 448-4148
web: GeorgiaTitle.com
contact: PaperAndDirt.com
Reference:
GA. Code 44-14-162 Advertisement and conduct (Georgia Code (2013 Edition))
(a) No sale of real estate under powers contained in mortgages, deeds, or other lien contracts shall be valid unless the sale shall be advertised and conducted at the time and place and in the usual manner of the sheriff's sales in the county in which such real estate or a part thereof is located and unless notice of the sale shall have been given as required by Code Section 44-14-162.2. If the advertisement contains the street address, city, and ZIP Code of the property, such information shall be clearly set out in bold type. In addition to any other matter required to be included in the advertisement of the sale, if the property encumbered by the mortgage, security deed, or lien contract has been transferred or conveyed by the original debtor to a new owner and an assumption by the new owner of the debt secured by said mortgage, security deed, or lien contract has been approved in writing by the secured creditor, then the advertisement should also include a recital of the fact of such transfer or conveyance and the name of the new owner, as long as information regarding any such assumption is readily discernable by the foreclosing creditor. Failure to include such a recital in the advertisement, however, shall not invalidate an otherwise valid foreclosure sale.
GA. Code 44-14-160 Recordations (Georgia Code (2013 Edition))
Within 90 days of a foreclosure sale, all deeds under power shall be recorded by the holder of a deed to secure debt or a mortgage with the clerk of the superior court of the county or counties in which the foreclosed property is located. The clerk shall write in the margin of the page where the deed to secure debt or mortgage foreclosed upon is recorded the word "foreclosed" and the deed book and page number on which is recorded the deed under power conveying the real property; provided, however, that, in counties where the clerk keeps the records affecting real estate on microfilm, the notation provided for in this Code section shall be made in the same manner in the index or other place where the clerk records transfers and cancellations of deeds to secure debt.
HISTORY: Ga. L. 1975, p. 422, § 1; Ga. L. 2009, p. 614, § 1/SB 141.
GA. Code 9-13-172.1 "Eligible sale" defined; effect of rescision /sic/; damages (Georgia Code (2013 Edition))
(a) As used in this Code section, "eligible sale" means a judicial or nonjudicial sale that was conducted in the usual manner of a sheriff's sale and that was rescinded by the seller within 30 days after the sale but before the deed or deed under power has been delivered to the purchaser.
(b) Upon recision of an eligible sale, the seller shall return to the purchaser, within five days of the recision, all bid funds paid by the purchaser.
(c) Where the eligible sale was rescinded due to an automatic stay pursuant to the filing of bankruptcy by a person with an interest in the property, the damages that may be awarded to the purchaser in any civil action shall be limited to the amount of the bid funds tendered at the sale.
(d) Where the eligible sale was rescinded due to:
(1) The statutory requirements for the sale not being fulfilled;
(2) The default leading to the sale being cured prior to the sale; or
(3) The plaintiff in execution and the defendant in execution having agreed prior to the sale to cancel the sale based upon an enforceable promise by the defendant to cure the default, the damages that may be awarded to the purchaser in any civil action shall be limited solely to the amount of the bid funds tendered at the sale plus interest on the funds at the rate of 18 percent annually, calculated daily. Notwithstanding any other provision of law, specific performance shall not be a remedy available under this Code section.
HISTORY: Code 1981, § 9-13-172.1, enacted by Ga. L. 2003, p. 413, § 1.
Comments
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Taking Care of Non Married Purchasers
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Taking Care of Your Non Married Purchasers– How the Due on Sale Clause Affects You
The scenario presents itself as two non-married purchasers who wish to buy property jointly. Sometimes the buyers are engaged to be married, or have future plans to be engaged. Other times, the buyers may be recent college graduates who plan on living in the property as a longer term "investment". In any event, the commonality is joint ownership under a non-married status where there is a loan involved. The challenge is avoiding issues arising from the lender’s "due on sale" clause contained in the security deed which generally prohibits post-closing deed transfers into non-married parties. Because joint borrowers will generally take title together, problems tend to arise only when there are two "purchasers" but only one "borrower,” meaning only one of them is actually applying for a loan.
Here are a few tips to avoiding a closing crisis:
- Tip 1. Understand your clients' situation. Are the parties applying for joint credit, or will only one party be on the loan? How will the earnest money be paid? And what about the down payment money at closing?
- Tip 2. Raise a level of consciousness in your buyers that their lender has the final "say so" on who is ultimately permitted to be on title. So, a comprehensive discussion with the lender is of absolute importance. For example, some lenders are able to add the name of the second party to the closing and title documents, even though he or she is not a joint borrower.
- Tip 3. Where appropriate, include the names of both purchasers on the contract at the time of the initial offer. This way, the lender will be on actual notice of two purchasers, not just the loan applicant. This will allow the lender to address this special circumstance early in the loan process, rather than it being a surprise at the eleventh hour.
Many people learn of this closing peculiarity only at the last minute when it is too late for the lender to fix. Since it is commonplace to add or remove spouses from title at closing, confusion arises from the mistaken belief that any party can be added to title. Awareness of this type of dilemma can really help in creating reasonable expectations in your clients and avoid the crisis at the closing table!
CHRIS PAHL
Real Estate Attorney
945 E Paces Ferry Rd
Suite 2250
Atlanta, GA 30326
Tel. +1 (678) 448-4148
web: GeorgiaTitle.com
contact: PaperAndDirt.com
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Tackling Tenancy
Wednesday August, 2013 06:39 PM
Tackling Tenancy– A guide for realtors
Our real estate community is well versed on the basic differences between the common forms of tenancy in Georgia. But Georgia is a relocation hot spot for people all over the United States. “Tenancy in Common?” – Got it. “Joint Tenants with Rights of Survivorship?” – Got it. “Tenancy by the Entirety?” – Don’t got it. Believe it or not, we get a lot of questions about this last type of tenancy, even though it isn’t an option in Georgia. Here’s what to know—
Concept of “Undivided Interest”
Long ago, when I was really little, my older brother and I each had a silver piggy bank. If we wanted a new toy, our mom would make us take the money out of the bank. On one occasion, my brother was short of change and coaxed me into buying a toy “together.” We opened up our metal banks and lots of change came out of mine, and from my brother’s? Well, not so much. We poured the coins into a small pile and after my brother determined that we did not have enough money to buy the toy, the coins were evenly divided and put back into the piggy bank. This is what is meant by “undivided interest.” When two or more individuals own an undivided interest in a piece of property (or pool of change as the case may be), there is no invisible line drawn down the middle of the property. Instead, the ownership is a shared interest in the whole.Tenancy in Common and Joint Tenancy Compared
When property is held in either tenants in common or joint tenants, each party owns an undivided interest in the whole and the interests remain separate so long as both (or all) the co-tenants are living. The difference between the two occurs if any of the owners die. In the case of a tenant in common, the interest of a deceased co-tenant remains in that person’s estate. Probate is typically required in order to deliver good and marketable title out of the estate interest. On the hand, when title is held as joint tenants, the survivor(s) takes the interest of the deceased person automatically upon death which avoids the need to probate. From a title perspective, the procedure in handling a joint tenancy is fairly simple and requires only recording a copy of the death certificate in affidavit form at the county clerk’s office.Tenancy by the Entirety – and Importance of Recognizing
Since Georgia is such a popular relocation area, it is important to be familiar with tenancy by the entirety since clients from out of state will occasionally ask about it. The State of Georgia does not recognize tenancy by the entirety. The conceptual equivalent in Georgia would be joint tenants reserved exclusively for married couples. The distinction is that in some states, the rights of married persons are treated differently than unmarried, and in those states the couple is treated legally as a single owner of the entirety. For example, spouses may be restricted from transferring his or her interest without the consent of the other. Depending upon the specific out of state law, a tenancy by the entirety is generally the equivalent of a Georgia joint tenancy, combined with marriage, and a dash of some other legal attribute. The difference in Georgia is that, married or not, any joint tenant may transfer his or her interest without the consent of the other, although this will have the effect of severing the joint tenancy and the resulting interests will be held as tenants in common.Interpreting the Deed – “Does my client have joint tenancy or not?”
Now let’s move on to the question of how to interpret the deed language. The first rule to know is that a joint tenancy requires additional language to create since a deed with no intent to create a joint tenancy will default to a tenancy in common. The Georgia Statute sums up the rules on joint tenancy fairly clearly:“…Any instrument of title in favor of two or more persons shall be construed to create interests in common without survivorship between or among the owners unless the instrument expressly refers to the takers as "joint tenants," "joint tenants and not as tenants in common," or "joint tenants with survivorship" or as taking "jointly with survivorship." Any instrument using one of the forms of expression referred to in the preceding sentence or language essentially the same as one of these forms of expression shall create a joint tenancy estate or interest… “ (GA Code § 44-6-190(a)).
We see, in Georgia, that tenancy defaults to tenancy in common, and that creation of a joint tenancy does not require particular language. One expression commonly seen on deeds is, “Joint Tenants with Rights of Survivorship.” In older deeds, though, the language may be embedded deep in the text of the deed and not readily apparent. In those deeds, the language may read something to the effect of, “to Adam Smith and Eve Smith, during their lives, then to the survivor of both.” Bottom line— it may take reading an entire deed to definitely determine whether joint language exists or not.
Assistance without Giving Tax Advice
Because choice of tenancy has estate and potential tax consequences, it’s best to keep to the facts when explaining tenancy to clients. Invariably, a client will ask, “Which is better? Joint tenants or tenants in common?” One way to respond is by explaining that the “best option” is the one most suitable for the client’s particular circumstances and that may involve running the question by the client’s accountant or estate planner.Two business partners may wish to acquire property as tenants in common and not joint tenants, when the interest of either should go to the family of the deceased, and not to the business partner. A young couple engaged to be married, or partners in non-legally recognized civil unions, may wish to take title as joint tenants since the surviving owner will have no legal right to the other one-half interest in the property without a Last Will & Testament. Unfortunately, these issues do arise and they are problematic. Often the survivor is held hostage without the ability to effectively manage the property interests. Another scenario to consider is second marriage couples, in which each spouse desires his or her interest to go to the children of the first marriage. Since joint tenancy passes outside of probate and ignores instruction in a Last Will and Testament, it may be more appropriate to hold as tenants in common, where the interest can be controlled by the Will.
As we can see, joint tenancy clearly has benefits in certain situations, other than mere convenience of avoiding probate. On the other hand, joint tenancy can be entirely inappropriate. For uncertain clients, the good news is that the tenancy can be changed at any time and the process in Georgia is simple and inexpensive.
CHRIS PAHL
Real Estate Attorney
945 E Paces Ferry Rd
Suite 2250
Atlanta, GA 30326
Tel. +1 (678) 448-4148
web: GeorgiaTitle.com
contact: PaperAndDirt.com
