Category: Real Estate Litigation

Quiet Title

At Gomez & Golomb, we regularly file quiet title actions. Whether you’re trying to get marketable title following a tax sale or trying to clear up a clouded title, the following is a quick overview of the requirement 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.

If you have any questions, please call us at 404-392-9994.

Tax Deed Redemption: Tricks of the Trade

personal checks not allowed when redeeming tax sale property

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.

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.

Georgia: Injury to Real Estate

          The Georgia legislature has passed several statutes to protect landowners against interference with and injury to their real estate. The starting point is that enjoyment of private property is an “absolute right” of every citizen. Any interference with such enjoyment creates a tort (wrongful act or an infringement of a right resulting in civil legal liability). OCGA § 51-9-1.

            To the extent a person wrongfully deprives a landowner of possession of their property, the landowner can seek to recover possession and sue for damages for such injury to real estate. OCGA § 51-9-2. Similarly, if any person wrongfully interferes with a landowner’s possession, the landowner can seek damages. OCGA § 51-9-3.

            Likewise, if a person wrongfully enters the landowner’s land or property without permission, a landowner to bring an action for trespass for injury to real estate. OCGA § 51-9-4. Trespass applies to persons wrongfully on land and applies to such things as improperly placed improvements or causing flooding on a landowners’ property. Anyone or anything that comes onto someone’s land due to wrongful conduct of another person can be a trespass. Suppose two persons claim possession of the same land. In that case, the person with title to the land is deeming to be rightfully in possession. In contrast, the other person is deemed to be a trespasser. OCGA § 51-9-5.

            Regarding damages for trespass, such damages are limited to damages incurred up until an action is filed. OCGA § 51-9-6. Damages that occur after filing a lawsuit create a new cause of action.

            Regarding streams (more formally called non-navigable watercourses), such landowners are entitled to the natural and usual flow of the stream across their property. If a person wrongfully diverts the stream from its natural and usual flow or lessens the value of the stream, this is considered trespass. OCGA § 51-9-7. The same applies to underground streams and interference of the space below and above the land’s surface. OCGA §§ 51-9-8 and 51-9-9. The last grounds for bringing a trespass action is if a person wrongfully interferes with a landowner’s right of way. OCGA § 51-9-10.

            Finally, a landowner claims damages if any person wrongfully puts the landowners’ title to the property in question. OCGA § 51-9-11. When this happens, it is known as slander of title. An example would be if a person files a fraudulent deed on the public record and this deed causes the rightful owner’s title to be clouded. Clouded means that there is a possible issue with title. Wrongfully clouding title is considered an injury to real estate in Georgia.

            If you are a landowner and your enjoyment of your land is being interfered with or violated, please call us at 404-382-9994 to discuss your options.

Expiration of security deeds in Georgia

Do real estate mortgages expire after a certain amount of time? In Georgia, a security deed is the document that secures a loan on real estate. OCGA § 44-14-80 states that security deeds expire seven years after the maturity of the last installment date stated in the security deed. OCGA § 44-14-80 further says if the security deed contains no maturity date, the security deed expires after seven years.

When a security deed expires, title automatically “reverts” (goes back) to the borrower. In other words, if sufficient time has passed, the security deed is automatically cancelled. Most importantly, after the security deed is cancelled, the lender loses its lien against the property and cannot foreclose.

These concepts were the focus of a recent Georgia Court of Appeals case: Freeport Title & Guaranty. In that case, the parties disagreed whether a security deed had expired. The security deed had a space to insert a due date, but, whoever drafted the security deed, left the space blank. One party argued that the security had expired after seven years because the security deed had no maturity date. The other party responded that omitting the due date was a mistake. Instead, that party argued that the borrower and the lender had intended to include a due date.

The Georgia Court of Appeals found that the security deed had not expired after seven years. Even though the parties had not included specific date in the security deed. The court reasoned that the parties had intended to include a fixed date. In addition, the Court of Appeals ruled that the promissory note, which did include a due date, could be used to “fill in the blanks.”

The takeaway, when evaluating whether a security deed in Georgia has expired, is to consider the promissory note and the security deed . However, unlike security deeds, lenders do not record promissory notes on the public record. So getting a copy to review may be challenging.

If you have a question about a security deed, please call us at 404-382-9994 to discuss.