Real Estate Law
Contract Due Diligence vs Inspection Contingencies
Saturday July, 2023 08:09 AM
In real estate, due diligence and inspection contingencies are key players. Due diligence allows buyers to terminate the contract, while inspections focus on property condition. Additional contingencies like appraisals and flood zones can also shape transactions. Understanding these distinctions is crucial in real estate. Read More...
Comments
Goodbye HUD-1, Hello Closing Disclosure
Saturday December, 2014 01:08 PM
Should You Use RocketLawyer or LegalZoom
Monday October, 2014 12:00 PM
Should You Use RocketLawyer or LegalZoom?
This morning I came across a great article written by lawyer Reba Kennedy on the subject of using legal form document companies. Reba discusses the potential cost savings from buying legal forms instead of just hiring an attorney. She also warns that the risks may not outweigh the benefits. Here is my take from the perspective of a real estate attorney.
I think there is a fair argument in favor of accessible legal services. Since quality legal services are rarely inexpensive, the online form companies such as LegalZoom and RocketLawyer have filled a vacant niche. However, as with any product or service, clients are happiest when their expectations are met. Unfortunately, bad results are usually not apparent until it’s too late. Using an online legal forms service may give the perception that a particular form is legally appropriate for a given circumstance or situation, when it is not.
LegalZoom's Deed Transfer Service web page, for example, does not mention that the type of deed used can have serious legal consequences in various ways. The layperson may be unwittingly creating title problems, sabotaging an existing title insurance policy or failing to pay required taxes due on the transfer. Furthermore, no conveyance should ever take place without a consideration of tenancy, which determines how the property is handled should an owner pass away.
When things matter I recommend using a licensed real estate attorney. And real estate matters too much to leave to a cheap, online form. When problems arise, that form could be a very expensive piece of paper.
To assist Georgia residents in conveyances outside of closing, Georgia Title & Escrow Company has created a new portal. This system is designed to have the flexible advantages of a web based service (credit cards are even accepted), but with the benefit of a property lawyer overseeing the process. Check it out at Rocket-Zoom.com.
*Here is the link to Reba’s original blog posting: http://everydaysimplicity.blogspot.com/2008/08/should-you-use-legalzoom-or.html.
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
How to Choose a Closing Attorney?
Friday July, 2014 06:57 PM
Q: How to Choose a Closing Attorney?
If you are in the market to buy or sell a home, or refinance your existing mortgage, you may be wondering how to choose a closing attorney...and have the best, most outrageous closing experience possible. Here are a few tips.
- Take Your Choice of Closing Attorney Seriously. Choosing the best closing experience is just as important as selecting the right mortgage lender or real estate agent. Never leave your decision up to someone else.
- Stay Involved in the Process. I have been handling real estate transactions since 1997 and a huge observation I have made is that the most satisfied clients remain active participants during the entire closing and escrow period. I would estimate that about 95% of a real estate attorney’s work is done outside of the closing ceremony. Having a continuing dialog with the closing firm ensures that expectations will be met and that there will be no hidden surprises at the closing table.
- Choose a Decision Maker for the Firm. It is not only important to work with a decision maker for the closing firm, but also important to make sure the same professional will handle your actual closing. Set your expectations up front with your closing attorney. Do you want to risk a closing situation and where you are put “on hold” until someone more senior is available to handle the matter?
- Work with a Seasoned Professional. It takes years of practice to hone the necessary skills to effectively deal with the myriad of issues that arise throughout the escrow period. Real estate transactions are complicated, highly orchestrated events. Your best selection is an attorney who has handled thousands of closings.
- Avoid Paid Referrals. If a real estate professional refers a particular firm, ask whether there is any affiliated business arrangement or marketing alliance between the two companies. If there is, ask for a second referral. A majority of consumers believe there is a conflict of interest when a real estate professional directly or indirectly accepts compensation for a referral. Since most professionals would probably not even consider their referral partner if it were not for the kickback, neither should you.
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
Does the "Good Funds" Law Apply to Cash Closings?
Saturday July, 2014 05:14 AM
What is the Georgia "Good Funds" law?
Friday July, 2014 01:14 AM
GA Real Estate Laws on Due Diligence
Wednesday June, 2014 12:47 AM
CFPB Fines Company for RESPA Violations
Sunday June, 2014 11:54 AM
CPFB consent order fining Alabama realtor $500,000 provides important legal guidance for affiliated business arrangements. Read More...
Legal Considerations for Accessory Dwelling Construction
Sunday February, 2014 10:43 AM
This article discusses a few legal considerations involved in constructing additions to residential property for purposes of occupancy by relatives or formal lease arrangements. Read More...
Can You Bind a Contract through "Texting?"
Sunday December, 2013 03:52 PM
Electronic signatures a legally valid means of binding parties to contracts under Federal and Georgia State law. Read More...
Inadvertently Binding the LLC
Thursday November, 2013 06:49 PM
When a Member Inadvertently Binds the LLC and How to Avoid (Georgia)
The overriding purpose for forming a limited liability company (“LLC”) is to limit the individual liability of its members. But sometimes a member may act in such a way that binds the whole company, even though the act may be outside of his authority and inconsistent with the rules of the organization. When this happens, a member may be liable to the other members for the wrongdoing, but the company remains on the hook!
A review of the Georgia Code states, “the act of any member, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the usual way the business and affairs of the limited liability company of which he or she is a member, binds the limited liability company . . .” (O.C.G.A. § 14-11-301(a)). Translated into English, this means that by merely signing an agreement in the company’s name, an individual member may create a binding obligation of the company. At the end of the day, the other members may have a private claim against the member who acted wrongfully, but the organization is still bound.
However, it is possible to prevent an LLC from being bound by the apparent authority of its members. Under Georgia law, “If the articles of organization provide that management of the limited liability company is vested in a manager or managers . . . No member, acting solely in the capacity as a member, is an agent of the limited liability company . . .” (O.C.G.A. 14-11-301(b),(b)(1)). In order to benefit from this statutory presumption and protection, the company would need to include as a provision in its Articles of Organization, that “management of the Company is vested in one (1) or more Managers.” Without this specification in the articles, a company bears the risk of its members inadvertently binding the LLC. Additionally, the operating agreement would need to be crafted to include the responsibilities and duties of a manager designated to carry out the acts of the company.
Is it time for a tune up or review of your Articles of Organization and other company documents? At Redmond Law Group, our corporate practice includes entity formations as well as changes to your organizational structure or documents. If you have questions with regard to formation or to evaluate an existing company, please contact us.
CHRIS PAHL
Real Estate Attorney
945 E Paces Ferry Rd
Suite 2250
Atlanta, GA 30326
Tel. +1 (678) 448-4148
web: GeorgiaTitle.com
No Place Like Comb
Saturday September, 2013 06:43 PM
No Place Like “Comb”– Georgia Beekeeping Laws
In recent years it has become increasingly popular for homeowners to keep beehives on their property. As a lawyer and member of the board of directors for a local beekeepers organization, I get the occasional question on the legality of keeping bees on residential property. For the curious, here is a summary on Georgia law with regard to beekeeping (or skip to interesting facts about beekeeping, below):
Beekeeping Legality - Mostly Unrestricted
The most significant State law regarding beekeeping generally prohibits restrictions on keeping beehives. This law is found in OCGA §2-14-41.1 which states in part, “No county, municipal corporation, consolidated government, or other political subdivision of this state shall adopt or continue in effect any ordinance, rule, regulation, or resolution prohibiting, impeding, or restricting the establishment or maintenance of honeybees in hives.” However, there are two limitations to the general prohibition against restriction. First, the law specifically reserves zoning rights to locales. For example, a county may limit beehive density. Second, the law does not restrict private agreements such as those found in homeowner association restrictive covenants which may prohibit beekeeping.
Beekeeper Licensing - Generally No Licensing Required
A beekeeping sales license is required to legally sell bees. This law is found in OCGA §2-14-40 (a) which provides, “All persons, firms, or corporations desiring to carry on as a business the sale of bees, queens, nuclei, etc., shall apply to the Commissioner of Agriculture as ex officio state entomologist for a license to do so.”
However, the State of Georgia does not have a licensing requirement to be a beekeeper, although certifications can be obtained through the University of Georgia Department of Etymology. Per the UGA website, there are four levels of certification:
- Certified Beekeeper: Individual should be familiar with the basic skills and knowledge necessary for the beginning hobby beekeeper.
- Journeyman Beekeeper: Individual should be functioning as a competent hobby beekeeper with the skills and knowledge for moving into sideline beekeeping if desired.
- Master Beekeeper: Individual should be able to function as a sideline or commercial beekeeper. Can also demonstrate knowledge in such areas as bee botany, business aspects of beekeeping, honey and bee-related judging, bee behavior and other specialty areas.
- Master Craftsman Beekeeper: Individual should have general knowledge of all relevant areas of beekeeping as well as be a specialist in one or more selected topics. Level is comparable to a graduate program in apiculture at a major U.S. university.
Beehive Registration - Generally No Registration Required
Some counties require the registration of beehives. Hobbyists are not required to register hives at the State level, although Georgia law reserves the right by the Commissioner of Agriculture to require registration. Registration of hives facilitates inspection “for the primary purpose of combating the spread of bee diseases, Africanized bees, or any other threat to honeybees in this state” (OCGA §2-14-43). It’s interesting to note that Chatham County (Savannah) requires registration to protect hives during pest control and mosquito spraying.
Did You Know?
Here are some interesting facts about honeybees...The honeybee is not native to North America, but is still the State insect of Georgia! In fact, the honeybee was brought over from Europe in the early 1600s and those European bees developed as a subspecies originally migrating from Africa. And about that Africanized bee...The Africanized honeybee (or "AHB") is still the bee of choice for honey production in South America. The AHB is not visually distinguishable from the European honeybee and they both produce honey. The main difference is that the AHB is aggressive compared to the calm nature of the European bee. One last factoid: the beekeeper is the best defense against the AHB. Since American beekeepers only raise the non-aggressive European species, research has shown in Florida, ironically, that the AHB has been found primarily where beekeeping has been restricted out of fear of the AHB.
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
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
