Surplus Foreclosure Funds

In Georgia, most foreclosures are non-judicial. Meaning that the lender does not need court approval or supervision to foreclose. Thus, most foreclosures in Georgia happen “privately.” This blog post addresses the lender’s obligations to disburse surplus foreclosure funds.

A lender who forecloses on real estate assumes the obligation of properly distributing the proceeds from the foreclosure sale. Holland v. Sterling, 214 Ga. 583, 585 (1958). The lender is entitled to apply the fund from the sale first to the costs of the sale, attorney’s fees, and the interest and principal of the secured indebtedness. OCGA § 13-4-42. If there are any surplus or excess funds, the lender must pay the surplus funds to lienholders and then to the borrower.

The lender’s interest in property exists only to the extent of the amount they are owed. Thus, the lender must account to the borrower for any surplus foreclosure funds. Palmer v. Mitchell County Federal Sav. & Loan Ass’n, 189 Ga. App. 646 (1988).

If there is a legitimate dispute to the surplus foreclosure funds, the lender can file an interpleader. An interpleader is a legal action where the lender gives the money to the court. And the court decides who is entitled to the money.

If there is no legitimate dispute regarding the surplus funds, and the lender fails to timely disburse the funds, the creditor may be liable for prejudgment interest to the party entitled to such funds. OCGA § 7-4-15. Such liability will largely depend on whether the amount of such surplus is a liquidated amount. Walton Motor Sales, Inc. v. Ross, 736 F.2d 1449 (11th Cir. 1984).

quiet title

Quiet Title in Georgia

Whether you’re trying to get marketable title following a tax sale or trying to clear up a clouded title, the following is the minimum required to file a quiet title in Georgia:

(1) The filing party must own/hold title.

(2) There must be a cloud against the filing party’s title.

(3) For conventional quiet titles, the action must be filed in the Superior Court in the county where the adverse party lives. OCGA § 23-3-40.

(4) For quiet titles against all the world, the action must be filed in the Superior Court in the county where the land is located. OCGA § 23-3-60.

(5) The quiet title must be verified (signed under oath) by the filing party.

(6) The quiet title must include a description of the property, a description of the filing party’s interest in the property, any adverse claims on the property, a plat of survey, and a lis pendens.

(7) In a quiet title against all the world, the petition must be submitted to a special master, who examines the title, determines the interested parties, ensures the interested parties are served, holds a hearing, and issues recommendations to the court.

(8) All adverse parties who are known and whose residences are ascertainable by the sheriff or his deputy must be served; the filing party must make a diligent effort to identify and serve the adverse parties.

(9) Service by publication is permitted when the adverse party resides out of the state or if the residence is unknown.

Tax Deed Redemption: Tricks of the Trade

A new Georgia appellate case, Moxie Capital v. Delmont 21 (2021), has been released that every tax deed purchaser, investor, and property owner should know about. The case involves how to redeem a property following a tax sale.

OCGA § 48-4-40 says the property owner or an interest holder in the property may redeem a property following a tax sale. Redemption must occur within a twelve-month window and after a notice of right to redeem has been provided. OCGA § 48-4-42 states how much a redeeming party must pay to redeem. Importantly, the funds required to redeem “shall be paid in lawful money of the United States.”

In Moxie Capital, an investor attempted to redeem a property. For various reasons, the attempted redemption occurred on the last day of the redemption period. The investor contacted the tax deed holder for a payoff. There were conflicting versions of what happened from there. The investor said the tax deed holder did not cooperate; while the tax deed holder argued he had no obligation to cooperate.

What the parties don’t dispute is that the investor timely delivered a personal check to the tax deed holder. The investor claimed that certified funds were not available because the banks had closed by the time he found out the details of where to deliver the redemption amount. On the next day, the tax deed holder returned the personal check to the investor. And claimed that the investor’s right to redeem had expired.

Naturally, this went to court. While somewhat complicated, ultimately, the investor lost. And the tax deed purchaser got the property. The Georgia Court of Appeals ruled that to redeem, funds must be in the form of cash or certified check. The Court cited OCGA § 48-4-42, which says funds must be “paid in lawful money of the United States.” Although no Georgia court has clearly defined “lawful money,” the Georgia Court of Appeals reasoned that a personal check is a promise to pay. Thus, the Court of Appeals did not consider the investor’s personal check to be a payment.

The Court of Appeals also suggested that a tax deed purchaser has no obligation to act in “good faith” when responding to a party trying to redeem.

Moxie Capital is consistent with other Georgia cases that apply redemption statutes strictly. Some would say harshly. Whether you agree or disagree with the outcome will depend on which side of the ledger you’re on.

Regardless of if you are a tax deed purchaser or a homeowner, we will be glad to represent you to get you through the process safely.

Valuing the Wrongful Death of a Child?

The death of a child is considered the single worst trauma a person can go through. The stress is so great that loved ones often suffer broken-heart syndrome, which presents like a heart attack. The wrongful death of a child makes coping (and healing) that much more unimaginable.

Gomez & Golomb counsels grieving families concerning their legal rights regarding wrongful death claims. We are compassionate, honest, and genuinely care about our clients’ well-being. We are not just here to get paid, but want to make a positive difference in people’s lives.

This post addresses how the Georgia court system values the wrongful death of a child. Of course, this is not something the family wants to think about. But, in the years that follow the child’s death, recovering enough money to help the family makes ends meet is essential.

In Georgia, the person or entity who caused the child’s death must compensate the deceased child’s family for “the full value of the life.” OCGA § 51-4-2(a). Importantly, the “full value of the life” is determined from the perspective of the child who died. Placing a monetary value on such pain, suffering, and loss is difficult, but Georgia has guidelines to help a jury assign a monetary value.  

The family is entitled to recover the full value of the deceased child without deducting for any of the deceased’s personal expenses had she lived. OCGA §§ 51-4-1(1), 51-4-4, 19-7-1(c). “[U]nder Georgia’s wrongful death statute, damages are measured from the decedent’s point of view.” Brock v. Wedincamp, 253 Ga. App. 275, 280 (2002).

The full value of a wrongful death of a child is comprised of two categories of damages:

(1) those items having a proven monetary value, such as lost potential lifetime earnings, income, or services, reduced to present cash value, and

(2) lost intangible items whose value cannot be precisely quantified, such as a parent’s society, advice, example and counsel as determined by the enlightened conscience of the jury.

Concerning the wrongful death of a child, the value of a child’s life is established by the enlightened conscience of an impartial jury as applied to the evidence in the case. This includes testimony as to such child’s age, life expectancy, precocity, health, mental and physical development, family circumstances, and from the experience and knowledge of human affairs on the part of the jury. Dep’t of Human Res. v. Johnson, 264 Ga. App. 730, 738 (2003).

We are here to help with any questions regarding the wrongful death of a child. Please call us at 404-382-9994.

TRANSFER OF TAX FIFA’S IN GEORGIA

Property taxes in Georgia are due towards the end of the year. For example, in Fulton County, 2021 taxes were due by November 15, 2021. When property taxes are not paid, the county’s taxing authority issues a fifa. A fifa acts as a lien against the property and is recorded on the county’s real estate records. The taxing authority must issue a 30-day notice to property owners before filing the fifa. The lien remains on the county’s public records until the taxpayer pays the taxes.

The most dramatic event that happens after filing a fifa is that the taxing authority may present the tax lien to the sheriff. The sheriff will use the fifa as a basis to auction the property to pay the taxes. This process is known as a tax sale.

To get taxes paid, taxing authorities in Georgia often sell their fifa’s to third-party investors. FIG and Investa are two companies that purchase tax liens.

For a taxpayer, a transfer of a tax fifa is confusing because the third party pays the county. The taxes are then owed to third-party, not the county. Thus, the county will show the taxes as paid, but the taxes are still owed.

Under Georgia law, OCGA § 48-3-19, the third-party purchasing the lien must send notice by first-class mail to the taxpayer within 60 days. In theory, this is to notify the taxpayer of whom to pay the taxes to. However, our office has had reports from taxpayers claiming they didn’t get any notice. Like the taxing authority, the third party can take the fifa to the sheriff and ask to auction the property to pay off the fifa.

If taxes are unpaid, you need to act as quickly as possible to pay the taxes to the correct party before there is a tax sale. Please call us at 404-382-9994 if you find yourself in this situation.