Legal Blog AtlantaAn Atlanta blog for lawyers, legal professionals, law students and those interested in the law

On June 4, 2010, Governor Purdue signed into law that may prove beneficial for homeowners seeking property tax relief during these difficult economic times.  This law may have an impact on how the values of homes and business properties are assessed, especially in areas where there have been significant foreclosures, distressed sales, short sales, etc.

In order to determine property values for local taxes, Georgia Code Section 48-5-2(3)(B) used to have language that stated the “tax assessor shall consider… foreclosure sales [and] bank sales.”  This previous language would only allow the assessor to “consider” such sales, but in practice, did not appear to have much force to bind the assessor to these transactions, despite the existence of neighboring properties plummeting in value.  Many neighborhoods and business properties have dropped off in home property values by over 75%.

With the passage of Senate Bill 346, the new Georgia Code Section of 48-5-2(3)(B) (effective on January 1, 2011) states that the “tax assessor shall apply… bank sales, other financial institution owned sales, or distressed sales, or any combination thereof, of comparable real property.”  There is a good argument that the “apply” language change creates a stronger requirement for assessors to automatically value a property based on local foreclosures, short and distressed sales, etc.  This argument is bolstered by the fact that there is new language the same code section that defines an arm’s length transaction as including a “distress sale, short sale, bank sale, or sale at public auction.” 

It is clear that the General Assembly wants you to have lowered assessments if your house falls within an area of increased foreclosures and similar distressed sales.  Whether county assessors will abide by these new laws is another matter.  The attorneys of Larsen & Teusink PC are experienced in handling property tax appeals throughout the Metro Atlanta Area and helping clients get a fair assessment value for their properties.  Contact one of our professionals today to schedule a consultation.  678.553.2923.

Posted under Foreclosure, Property Law, Real Estate Law, Tax Law

Even though our nation’s economy is floundering, there are many potentials out there for the savvy investor.  Many investors with ready funds have turned to taking advantage of the depressed real estate market.  As many homes and commercial buildings are going through forced sales due to foreclosure, investors with cash-in-hand are able to buy many of these properties at a discounted rate.  In order to protect and shelter that investment (as well as the investor’s other assets), however, one should consider shifting the recently purchased property to a newly formed business entity.

Why go through all of the hassle and extra cost?  Business formation and continued operation as a business will shield an investor from most personal liability for negligent acts and omissions tied to that particular property.  For example, if you own land that is residential real estate worth $50,000, and someone incurs injuries on your property in the amount of $100,000, without proper business formation, an individual could go after you in court for your personal assets for the entire $100,000, not just the property valued at $50,000.

Also, another added benefit of business formation and operation is that costs incurred through your activities for the business entity yield significant tax benefits.  If a parcel of property is held as an investment for at least a year and one day, the land is then considered a capital investment.  When sold, a capital investment is sold at a lower tax rate than ordinary income.  Additionally, having a business entity makes more accessible certain business deductions not otherwise available to casual investors of property.  All of these advantages would greatly outweigh the initial planning costs involved with hiring a skilled attorney.

To make the most of these and many other benefits, one should consult an attorney to determine how best to establish your real estate investment business entities.  The attorneys of Larsen & Teusink PC have extensive knowledge of tax and business law to best protect you from law suits and tax liability.  Contact one of our professionals today to schedule an appointment.  678.553.2923.

Posted under Business Law, Commercial Real Estate, Planning Law, Property Law, Real Estate Law, Tax Law, Tax Planning

If you live in a Metro Atlanta neighborhood built after 1985 there is a substantial likelihood that your property may be subject to the covenants of a Homeowners Association.  We have found that people typically have one of two diametrically opposed opinions about HOA’s.   These opinions are something like -

1. My HOA is reasonably well run by competent people who are looking out for the best interest of the neighborhood; OR
2. My HOA is a diabolical organization run by power-starved Svengalis hell bent on ruining the lives of their neighbors by nitpicking over every little detail.

We don’t often hear from people with Opinion #1, but we frequently get calls from people with variations of Opinion #2.  Georgia law generally favors the decisions of HOA’s, but, requires that they not be “arbitrary and capricious” in their decision-making process.

Larsen & Teusink PC has experience resolving disputes between HOA’s and homeowners  .  Please call our offices today at 678.553.2923 and speak with one of our professionals today to learn more.

Posted under Real Estate Law

When nearly any home is sold in Georgia, the seller is required to fill out a Seller’s Property Disclosure Statement.  This form is created to “assist Seller in disclosing to prospective buyers material adverse facts relating to the physical condition of Property that may not be readily observable.”

Most buyers will have a home inspector review the property prior to purchase.  Unfortunately, home inspectors are only able to review those issues that are readily observable.  Further, your typical home inspector is not an engineer, and thus, may be unable to to assist the buyer in discovering latent underlying issues.

The fastest, easiest, and cheapest way for a prospective buyer to find out about potential issues with the house is from an owner who is intimately familiar with the property.  For this reason, the seller/owner is often required to fill out a disclosure form.

A seller may worry that disclosing a problem with the house will scare off the buyer.  Given the current housing market, this fear is understandable, but failure to disclose an item could be considered fraud.  If you fail to disclose a problem and something goes wrong post-sale, you are opening yourself up to being sued by the purchaser.  Should this occur, your legal fees could be astronomical.

In practice, most sellers will not walk from a purchase because of a minor issue you disclose.  Further, should you be sued, it could take all your resources to merely defend the suit, let alone pay any awarded damages.  Finally, in our opinion, which may sound somewhat Pollyanna, being honest and open in your transactions is the right thing to do.

Larsen & Teusink PC has experience litigating matters related to fraud in the sale of real property.  Please call our offices today at 678.553.2923 and speak with one of our professionals today to learn more.

Posted under Litigation, Property Law, Real Estate Law

If we made a list of common inquiries we were asked by clients about Chapter 7 Bankruptcy, the question at the top of the list would be, “Can I keep my house if I file for Chapter 7 Bankruptcy?”  If you have experience dealing with attorneys, you will not be surprised to hear that the answer is maybe.

There are two main types of debt incurred by a typical consumer, secured and unsecured.  An unsecured debt is one that is not guaranteed by an underlying asset such as a car or home.  The most typical form of unsecured debt is credit card debt.  A secured debt, as you might have guessed, is a debt guaranteed by and underlying asset.  A mortgage or security deed is a secured debt guaranteed by real property.  For most people the only mortgage they have is on their home.

If you fall behind on a secured debt the lender has the ability to take back possession of the underlying property and sell it to satisfy the debt.  For your home, this is typically done through foreclosure.

But what about your home?  Will you lose it if you file Chapter 7 Bankruptcy?  The answer is yes and no.  If you are current on your payments to the lender, then you will almost certainly be able to sign what is called a reaffirmation agreement with the lender which will allow you to keep the house.  If you are behind on your mortgage, then it is likely that the lender will be able to foreclose on the property and sell it despite the bankruptcy.

That is a long answer to a short question that does not even attempt to delve into the numerous other complexities involved in how your home will be affected by a bankruptcy.  Larsen & Teusink, PC has experience in real property law, bankruptcy and foreclosure.  To get a more in depth answer to your questions, please feel free to visit our website or call us at 678.553.2923.

Posted under Bankruptcy, Foreclosure, Real Estate Law

The twenty year building boom in Metropolitan Atlanta has left the city with a glut of retail and commercial office space.  This has driven down rental rates in submarkets throughout the city.  It has also caused landlords to offer massive incentives to potential new tenants.  At the same time, the economy has put pressure on businesses of all sizes.  Many businesses are struggling to make rental payments that only a few years ago seemed competitive.

Some small businesses will choose to simply walk away from their lease obligations.  Taking this step without consulting with an attorney could devestate your business.  Worse, in some situations, a landlord may have the option to come after your personal assets.

In Georgia, a residential landlord is required to mitigate damages when a tenant breaks their lease.  This means that the landlord must actively seek a new tenant to replace the one that left.  The tenant who defaults on their lease will only be obligated to pay for those months where the landlord was unable to find a new tenant.

Commercial landlords in Georgia have no duty to mitigate.  Thus, a commercial landlord can simply allow a property to remain vacant until the end of the lease term and sue the tenant for the unpaid rent.  Further, almost all commercial leases we review have acceleration clauses that allow the landlord, upon breach of the lease, to immediately bring suit for all of the future unpaid rent.  Typically, these leases will also have clauses allowing for the payment of interest and the landlord’s legal fees.

If you are thinking about breaching a lease, we suggest that you hire an attorney to negotiate a release with your landlord.  Litigation is expensive, and most landlords will seek to avoid it if possible.

Larsen & Teusink, PC represents both landlords and tenants in all matters related to commercial leases.  This includes negotiation, drafting, analysis, and litigation.  If you have questions or concerns related to a commercial lease matter, please visit our website or call us at 678.553.2923.

Posted under Business Law, Landlord Tenant, Real Estate Law