Category: Tax Deed

Quiet Title Actions In Georgia

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What is a quiet title?

A quiet title is a real estate lawsuit filed by a property owner in Superior Court. Property owners file quiet title actions to either (1) remove “clouds” on their title (conventional) or (2) establish that they, and no one else, own the property in question (statutory).

What is a Cloud on Title?

A cloud on a title means a possible adverse interest in real estate. In most situations, property owners cannot refinance or sell a property with a clouded title.

When Should You File a Quiet Title?

Many times, when property owners attempt to refinance or sell their property, the process grinds to a halt when they find out that there is a cloud on their title. While a closing attorney can sometimes fix a cloud on the title with additional paperwork, some situations cannot be resolved without a quiet title.

A forged deed is an example of a cloud on a title. See, e.g., Vatacs Grp., Inc. v. U. S. Bank, N.A., 292 Ga. 483, 485 (2013) (forged deed). Open security deeds (mortgage loans that have not been marked as paid) also cloud a title and must be cleaned up before a refinance or sale is possible.

Other situations that require a quiet title are (1) heir property not formally transferred from the decedent to the heirs; and (2) boundary line, encroachment, easement, and trespass claims.

Tax Deeds and Tax Sales

Real Estate owners also file quiet titles “against all the world.” These quiet titles are all-encompassing and are required in certain situations, such as following a tax sale.

Filing a Quiet Title Action in Georgia

At Gomez & Golomb, we regularly file quiet title actions for real estate owners. Whether you’re trying to get a marketable title following a tax sale or trying to clear up a clouded title, the filing party must own/hold title, and there must be a cloud against the filing party’s title.

Conventional Quiet Titles: Getting Rid of a Specific Claim or Interest

An action for a conventional quiet title is an equity case and must be filed per the venue provisions of the Georgia Constitution. Thus, it must be filed in the county of residence of one of the named defendants. In a conventional quiet title action, the named defendants are served. Then discovery proceeds as in any civil case. And the case is ultimately presented to the judge for a final hearing. As in other equity cases, “there shall be no right to a jury trial.” OCGA § 23-3-43.

Statutory Quiet Titles: Against All the World

A statutory quiet title action is not only against the adverse claimants. But an action in rem against the land itself. OCGA § 23-3-62 provides that it is a proceeding in rem. It shall be filed in the superior court of the county where the land is located. In a quiet title against all the world, the petition must be submitted to a special master. The Special Master examines the title, determines the interested parties, ensures the interested parties are served, holds a hearing, and issues recommendations to the court. The appointment of a Special Master is required. OCGA § 23-6-63. Once appointed, the Special Master substantially controls the course of the case.

Initially, the Special Master determines who is entitled to notice, including adjacent landowners and all adverse claimants. Known claimants must be personally served, and all “unknown claimants” are served by publication. OCGA § 23-6-65. The Special Master exercises “complete jurisdiction” over the case to ascertain and determine the validity, nature, or extent of the petitioner’s title and all other interests in the land and to remove any particular cloud upon the title to the land. OCGA § 23-3-66. The Special Master then makes a report of their findings to the judge of the court. Id.

Unlike in a conventional quiet title case, a jury trial is available. Id. Upon receiving the Special  Master’s report or the jury verdict, the court issues a decree to be recorded in the county real property records. This decree binds the land affected and is conclusive upon all claimants, known or unknown. OCGA § 23-3-67.

Need Advice Regarding a Quiet Title in Georgia

If you have any questions or wish to learn more about your rights and options, please call us at 404-392-9994.

Tax Deed Redemption: Tricks of the Trade

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Redemption Process

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.”

Redemption Dispute

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.

Don’t Wait Until the Last Minute – Call Us

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.

Call Us at 404-382-9991 to speak with an attorney regarding your options!

TRANSFER OF TAX FIFA’S IN GEORGIA

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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.

In Georgia, how long do you have to tender the statutory redemption amount following a tax sale and how much do you have to pay?

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OCGA § 48-4-42 says: “The amount required to be paid for redemption of property from any sale for taxes . . . shall . . . be the amount paid for the property at the tax sale . . . plus a premium of 20 percent of the amount for the first year or fraction of a year which has elapsed between the date of the sale and the date on which the redemption payment is made and 10 percent for each year or fraction of a year thereafter.”

OCGA § 48-4-40 says the tax deed purchaser may terminate the right to redeem one year after the tax sale by sending out notices to any interested parties. The notice regarding the tax deed must include a deadline to redeem.  

It sounds simple enough, but what if the parties can’t agree on an amount? And what if a party redeems within the deadline by mistakenly pays less than the full redemption amount required under the statute? This situation arose in D&D Family Properties, LLC v. Wright, A20A1339 (November 3, 2020).

In Wright, the tax sale took place on July 5, 2017. The Court of Appeals found that the deadline starts running on the date of the tax sale. Thus, the deadline to redeem fell on July 4 of the following year. The redeeming party submitted $7,600 on July 5 ($6,000 for the amount paid at the tax sale plus the 20% premium). It did this thinking the one-year deadline ran on July 5. Or because July 4 was a holiday, the deadline rolled over to the next business day.

The Court of Appeals disagreed. It ruled that by July 5, the redeeming party owed an additional 10%. Thus, the $7,600 was inadequate, and the redeeming party could not redeem.

The takeaway is the Court of Appeals is willing to strictly enforce the statutes regarding tax sales.

Excess tax sale funds for judgment holders

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While we have discussed excess tax sale cases before, recently, the Georgia Court of Appeals addressed who may claim excess tax sale funds. In that case, the Court held that judgment holder was not an “interested” party and therefore not entitled to tax sale funds following a Fulton County tax sale.

Here, the claimant held a judgment (the ultimate litigant was a successor assignee of the judgment) against a lender who held a mortgage against the property. The judgment holder argued that following the tax sale, the excess tax sale funds became personal property belonging to the mortgage holder—and therefore (somehow) the mortgage holder is entitled to a lien against such personal property (i.e, the tax sale proceeds).

In analyzing these claims, the Court looked to O.C.G.A. § 48-4-5(a), which states:

[i]f there are any excess funds . . . the officer selling the property shall give written notice of such excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale.

The subsection that follows provides that “[s]uch excess funds shall be distributed by the superior court to the intended parties, including the owner, as their interests appear and in the order of priority in which their interests exist.” O.C.G.A. § 48-4-5(b).

Ultimately, this turned out to be an easy decision because the claimant simply did not have any interest in the property by virtue of holding a judgment against a party that may have had an interest. Specifically, because the judgment was against a corporate entity, and not the property that had been sold, and because the judgment lien was against a predecessor in interest to a grantee of a security deed, the claimant was not an “interested party” under OCGA § 48-4-5 and could not receive excess funds under the statute.