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.