Cozy: New Internet Service Makes Renting Easier

Cozy, which launched on June 6, 2013, is a new company hoping to make day-to-day issues facing landlords and tenants easier. The company is financed by Google Ventures, among others, meaning odds are in favor of this company succeeding.

Owning rental property is a great long-term investment; likewise, renting is a convenient solution for many who can’t afford or don’t want to buy property. However, as everyone knows, being a landlord or a tenant can come with some headaches.

To start with, for a tenant, finding a place to rent requires filling out several applications, which results in tenants having to provide personal and confidential information to complete strangers. For a landlord, finding a reliable tenant involves chasing down references, expensive background checks, and oftentimes guess work. Cozy aims to solve these issues. Renters create a profile in Cozy containing the personal information required on rental applications (e.g., references and job information). This information is verified through LinkedIn. Landlords can quickly and easily access this data. Once a tenant finds a place (or stops looking), he or she is able to remove access to his or her personal information. This provides greater security than filling out an old-school paper form or online application.

Likewise, landlords are able to create a profile and list of available properties, creating a central repository for tenants looking for rentals.

An important back-end feature offered by Cozy is online payments. No more the “check got lost in the mail” excuses. Using ACH direct debit payments, a renter is able to send money directly to a landlord’s account.

The fee to use this service is borne by the landlords, who are required to pay $9/month for every unit listed. But, if this service works as advertised, we suspect landlords will be glad to pay $9/month for the convenience provided. In order to become a viable option going forward, lots of landlords and tenants will need to sign up for the service. We wish Cozy luck and hope for its success.

At Gomez & Golomb LLC, we’ve been drafting leases, negotiating landlord-tenant disputes, and filing evictions for twenty years. Please call us for a free initial consultation to discuss your commercial or residential landlord-tenant issues.

O.C.G.A. 9-11-67.1: New Law Regarding “Holt” Bad Faith Demands in Georgia

Our last blog post covered the origins of the Holt case, which for the past 20 years has protected injury victims from insurance companies who unreasonably and untimely refuse to settle straight forward injury claims.

Because Holt exposes insurance companies who act in bad faith to potentially large penalties, insurance companies have been pushing the Georgia legislature to repeal Holt time-limit settlement demands.

On March 22, 2013, the Georgia legislature passed House Bill 336, which is a compromise between plaintiffs’ lawyers and insurance companies. The new law, signed by Governor Nathan Deal, codifies the Holt settlement demand process. Fortunately, the new settlement process leaves in place the requirement that insurance companies negotiate claims in good faith.

The new law will be known as O.C.G.A. Sec. 9-11-67.1 and will apply to all automobile wrecks after July 1, 2013. Some of the highlights of the new law are: settlement demand letters now must be sent prior to filing a lawsuit, the claim must involve injuries arising out of the use of a motor vehicle, the demand must be prepared by an attorney, the demand must allow the insurance company 30 days to accept the offer, and the demand must be sent by certified or overnight mail.

The changes will give both sides a fair opportunity to fairly and timely resolve serious car wreck injury cases.

Please call us at (404) 382-9994 if you have any questions regarding the new law.

Origin of “Holt” Bad Faith, Time-Limit Demands in Georgia

At this point in time, Georgia law favors bad faith claims against insurance companies who fail to reasonably settle personal injury claims. In the current era of tort reform, this is a welcome relief for injury victims.

The favorable law stems from the 1989 case of Holt v. Southern General Insurance Company, SC89CV13484 (Muscogee State Court). In that case, Southern General was successfully sued for negligently failing to timely settle an automobile injury claim.

In Holt, the plaintiff offered to settle her injury claim for the other driver’s $15,000 policy limits with Southern General. Importantly, the offer was good for only 10 days (subsequently five more days were added to the deadline). Southern General never told its policy holder about the proposal and deadline, and did not respond within the time set by the plaintiff.

Three days after the settlement period expired, Southern General offered to pay the policy limit. The plaintiff rejected the proposal as not being timely and sued. Southern General made two more offers before trial to pay the $15,000. The plaintiff again turned Southern General down, saying she would no longer settle for the policy limits.

On July 19, 1988, a jury returned a verdict of $82,000.00 against the responsible driver.  After Southern General paid its policy limits of $15,000, the responsible driver was left personally liable to the plaintiff for $67,078.00 plus 12% interest. The responsible driver assigned her right to the plaintiff to sue Southern General for failure to settle.

 On July 18, 1990, a jury awarded $208,000.00 to the plaintiff, including $100,000.00 in punitive damages. The jury award was upheld by Georgia appellate courts, insuring insurance companies have a duty to exercise due care in settling claims.

Since Holt, our firm has been successfully making time-limit demands on insurance companies. We will continue to use Holt and other strategies to maximize our clients’ recoveries in every case.

On July 1, 2013, a new law will take effect that will modify the use of Holt demands. In our next blog, we will discuss these modifications and the impact they will have on future injury cases.

Landlords’ Responsibility For Injured Third-Parties in Georgia

A recent Georgia Court of Appeals case examines the issue of a landlords’ liability for injuries to a third-party. The case, Forsh v. Williams, A12A2248 (3/20/2013), involved a non-tenant injured by a tenant’s dogs.

The injured party alleged the landlord was negligent and reckless in failing to adequately screen his tenants, failing to enter into an agreement whereby the tenants were prohibited from having and keeping vicious dogs, failing to adequately inspect the premises, and failing to comply with legal requirements under state and federal law for ownership of rental property. The injured party also alleged the landlord failed to keep the premises in repair – as required under OCGA § 44-7-14 – by not installing an appropriate gate on the deck from which the dogs escaped, and failing to install fencing in the yard after knowing of the presence the dogs.

Under Georgia law, to be liable for injuries to third-parties, out-of-possession landlords are responsible to third-parties for defective construction or for failure to keep the premises in repair.

OCGA § 44-7-14, entitled “Tort liability of landlord,” provides: “Having fully parted with possession and the right of possession, the landlord is not responsible to third persons for damages resulting from the negligence or illegal use of the premises by the tenant; provided, however, the landlord is responsible for damages arising from defective construction or for damages arising from the failure to keep the premises in repair.”

As long as landlord fixes defective construction and keeps the property in repair, presumably, the landlord is immune from claims from the third parties. The allegations referenced above, which include screening tenants and taking other proactive steps, go beyond a landlord’s responsibility in OCGA § 44-7-14.

So what did the court of appeals do? The court focused mostly on procedural issues, reversing the trial court and finding the landlord was not entitled to an outright dismissal at an early stage of the litigation. In favor of the landlord, the court ruled against the injured party on her claim under 42 USCS § 1437 et. seq., commonly referred to as Section 8. The injured party alleged landlord failed to comply with Housing Quality Standards requiring adequate infrastructure to keep the dogs confined either on the deck, in a suitable fence, or otherwise. The court of appeals found this federal statute couldn’t be a basis for liability, and an injured party’s claim is limited to OCGA § 44-7-14.

If you have any questions about Georgia landlord liability for injuries, please call us at 404-382-9994. We have twenty years of experience handling these cases.

Foreclosure Confirmation Victory

Congratulations to the Bloom Sugarman Everett law firm for winning a foreclosure confirmation at trial and having the ruling affirmed by the Georgia Court of Appeals. Eagle GA | SPE LLC v. Atreus Communities of Fairburn Inc., A12A2344 (2/21/2013).

Atreus involved 13-developed lots, which were foreclosed for $155,000. As is typical in these type of cases, this confirmation hearing ended up being a battle of the appraisal experts. Here, the trial court found that $155,000 was less than the fair market value for the subject property and denied confirmation.

The trial court found that the lender’s appraiser failed to consider the sales comparison approach to value the property as required by the Uniform Standards of Professional Appraisal Practice (USPAP), wrongly calculated the tax liability of the property, and admitted the absorption period in his report was a “guestimate.” The trial court also found that the expert’s discounted cash flow model to be unreliable and unsupported.

On the other hand, the bulk sales comparison used by the borrower’s appraiser was found to be credible. This approach resulted in an appraisal of $228,000.

The Georgia Court of Appeals agreed with the trial court because the record showed the lender’s appraiser failed to support his opinions with reliable facts, and failed to consider the more reliable bulk sales comparison. The Court of Appeals noted that the trial court is entitled to weigh the evidence and judge the credibility of both experts. Because the record contained evidence to support the trial court’s ruling, the Court of Appeals was not in a position to second-guess the trial court.

Next, the lender contended that the trial court erred in not ordering a resale of the property under OCGA Sec. 44-14-161(c). The Court of Appeals found that a lender is not entitled to a resale simply because there may have been a flawed appraisal; and, moreover, the decision to order a resale is wholly at the discretion of the trial court.

At Gomez & Golomb LLC, we have handled many foreclosure confirmation hearings, both for the lender and for the borrower. If you have any questions, please call us at (404) 382-9994.