Adding An Adult Child To Home Deed

If you are considering adding your adult child to your home deed then consider these factors first.

Often, I receive questions from clients asking if they should add their adult child or children to their home deed. While this question is complex, it really depends on the motives and circumstances on a case by case basis. However, below are a few important factors for all parents in this scenario to carefully consider while weighing their options.

What is the purpose?

First and foremost, you should ask yourself, “why do I want to add my child(ren) to my home deed?” The two main answers I typically receive to this question are: (1) I want to make sure my child(ren) has ownership in real estate; and (2) I want to make sure that my child(ren) receives my property upon my death.

For Ownership in Real Estate

Once a child is added to a home deed, the child becomes an owner of the property. Importantly, this means that in order for a parent to sell or refinance the property down the road, the child must also consent. However, the type of interest that the child owns is based upon the matter in which he or she holds title.

The two ways in which a person can hold title are tenants in common and joint tenants with rights of survivorship. Tenants in common means that each grantee owns a divided interest in the property and can individually convey their interest to another party. Additionally, in the event one of the title holders dies, the deceased’s interest is conveyed in accordance with the terms of the deceased’s will. However, if the deceased title holder did not have a will, then the interest is conveyed according to law. In contrast, joint tenants with rights of survivorship means that each grantee owns an undivided interest in the property. Unlike tenants in common, in the event one of the title holders dies, the deceased’s interest in the property will automatically pass to the other title holder(s).

Transferring Property Upon the Parents’ Death

If the purpose of adding your child to your home deed is only to ensure that he or she receives the property upon your death, then it is best to explore other avenues of doing so. For example, you could devise the property through a will. A will is an ideal option for parents who do not wish to have their child be an owner at the time of purchase but would like to successfully transfer their interest to their child upon the parents’ death.

Potential Risks

There are significant risks associated with adding a child to your home deed. These risks include, but are not limited to:

  • Violating the terms of your security deed;
  • The potential of your child’s finances negatively affecting your own ownership and title; and
  • Negatively affecting your child’s chances of obtaining student loans.

While these examples are some of the most common, this is not an exhaustive list. The various risks associated with adding a child to a deed depend on your specific circumstances.

Security Deed Violation

Adding an additional party to the deed often violates the terms of the security deed. Furthermore, it can invoke the due on sale clause enabling the lender to accelerate payment of the loan. This would make the full loan payment immediately due. In order to avoid this, you should inform the lender of your desire to add your child to the deed and receive the lender’s approval.

Potential for Liens

Secondly, your home ownership interest can be negatively affected by your child’s finances. Specifically, certain claims, judgments, and liens against your child could attach to your child’s interest in the home. Furthermore, if your child falls on hard times and declares bankruptcy, this act could attach to your home as a lien and potentially affect your own ownership interest in the property.

Student Loan Eligibility

Lastly, being added to the deed could potentially affect your child’s student loan eligibility. Certain schools use a system that accounts for your child’s assets. In applying for financial aid, your child would have to report their ownership interest in the home as one of their assets. Having such an asset could be a factor that negatively affects the amount or total eligibility for student loans.

There are several factors to consider when adding your adult child to a deed. Ultimately, the decision should be made after careful consideration of the risks and benefits.

Audra Frimpong

Audra W. Frimpong
Thompson, O’Brien, Kemp & Nasuti, P.C.
40 Technology Parkway South, Suite 300
Peachtree Corners, Georgia 30092
(T) 770-925-0111 | (F) 770-925-8597 |
Click here for Audra’s LinkedIn.

Audra Frimpong is a new addition to the TOKN family and has already proven to be a valuable asset to out Real Estate team. To learn more about Audra, visit her profile here.

Basic or Enhanced – Which Title Insurance Coverage is Right for You?

While optional in Georgia, purchasing owner’s title insurance is always a good idea and always recommended when acquiring real property.  After all, why wouldn’t you want to protect your most valuable asset(s)?

What is Title Insurance?

As you probably guessed, title insurance protects the insured owner and/or lender from title defects. These defects can include, but are not limited to, issues affecting the chain of ownership of the property, adverse claims of third parties, and fraud or forgery. As a result of these potential defects, the owner and/or lender can suffer significant financial loss and potentially the complete loss of the property. 

Most buyers know that title insurance is available for purchase when acquiring real property. However, buyers are often unaware that they have the option between a standard policy or an enhanced policy.

While there are many differences between the two policies, below are a few of the key differences to consider when deciding which policy option is best for you:

Standard Policy

A standard policy insures against title defects that exist at the time a purchaser acquires the property.  Put another way, a standard title insurance policy insures against adverse circumstances affecting the title that occurred at or prior to closing, including:

  • Forged deeds, mortgages, satisfactions or releases of mortgages, and other instruments;
  • Impersonation of the true owners of the land by fraudulent persons;
  • Fraud, duress, or coercion in securing essential signatures;
  • Mistakes in recording legal documents; and
  • Unpaid recorded liens.

Enhanced Policy

An enhanced policy provides the same coverage as a standard policy but also includes some additional protections against title defects that can occur after closing. For example, some of those additional protections include:

  • Encroachments of structures on your property or of your improvements on a neighbor’s property;
  • Subdivision violations;
  • Certain zoning requirements;
  • Lack of access to the property;
  • Supplemental tax assessments;
  • Post policy forgery, encroachments, adverse possession, prescriptive easements, and other clouds on title;
  • Automatic increased coverage accounting for increasing property values; and
  • Removal of the survey exception contained in the standard title policy.

An enhanced policy is generally about 10% more expensive than a standard policy. However, it also provides much better value for the cost. Ultimately, buyers should be aware of all options in order to make an informed decision they are satisfied with.

Brian D. Klein
Thompson, O’Brien, Kemp & Nasuti, P.C.
40 Technology Parkway S., Suite 300
Peachtree Corners, GA 30092
(O) 770-925-0111 | (F) 770-925-8597 |
Click here for Brian’s LinkedIn

Brian Klein is an experienced associate with TOKN’s Real Estate team. If you would like to learn more about Brian and how he can help with your commercial and residential real estate matters, then please visit his profile here. Additionally, Brian is available by phone and email at the number and address listed above.

*Insurance Claim image by Alpha Stock Images Nick Youngson

An Introduction to Newly Enacted Bankruptcy Laws

Crossroads between bankruptcy and counseling
Crossroads between bankruptcy and counseling. Image from

This summer saw the passage of new federal statutes that amend the Bankruptcy Code. Specifically, On August 23, 2019, President Donald Trump signed into law the Family Farmer Relief Act of 2019 (the “FFRA”), and the Small Business Reorganization Act of 2019 (the “SBRA”).  

Family Farmer Relief Act of 2019

The FFRA is perhaps the most significant change to the Bankruptcy Code in that it increased the debt eligibility limit applicable to agribusinesses. Previously, the debt limit for a family farmer to be eligible for Chapter 12 relief was approximately $4.4 million.  Due to the FFRA, the debt limit increased to $10 million. Chapter 12 of the Bankruptcy Code is designed to provide debt relief to family farmers with regular income. The goal of the increased debt limit is to make Chapter 12 relief available to more family farmers who would have otherwise had to seek bankruptcy relief under the more onerous and expensive Chapter 11.

Small Business Reorganization Act of 2019

Unlike the FFRA, the SBRA did not go into effect immediately.  Rather, the SBRA will take effect in February, 2020. The SBRA will create a new subchapter within Chapter 11 of the Bankruptcy Code for small business debtors. While provisions for small business debtors within the other subchapters of Chapter 11 remain, a small business debtor may elect to proceed under the new subchapter instead. Furthermore, the debt limit for a small business debtor under either option remains the same (approximately $2.5 million). However, the SBRA amends the definition of a small business debtor. The new definition requires that not less than 50% of the debtor’s debts arose from the debtor’s commercial or business activities. 

The New Chapter 11

This new subchapter includes significant changes to a small business debtor’s Chapter 11 case and streamlines the requirements for the plan proposal and confirmation processes. Specifically:

Trustee Duties

  • The most substantial structural changes under the SBRA to a small business debtor’s Chapter 11 case are that no committees are to be appointed absent cause and a trustee will be appointed in each small business debtor’s case as a matter of course to perform certain administrative and supervisory duties. For example, the trustee duties will include:
    • appearing and being heard regarding the value of property subject to a lien, confirmation or modification of the plan, or sale of property of the estate;
    • facilitating the development of a consensual plan;
    • ensuring the debtor commences making timely payments required by a plan;
    • examining and potentially objecting to proofs of claim; and
    • opposing the debtor’s discharge, if advisable.

Plan Filing Deadline

  • Under current Chapter 11, a small business debtor has the exclusive right to file a plan during the first 180 days of the case and must file a plan within the first 300 days of the case to avoid dismissal. After filing the plan, the debtor has 45 days to obtain confirmation of the plan, unless extended by court order.  Under the SBRA, the debtor will have the exclusive right to file a plan, though it must be filed within the first 90 days of the case.  Additionally, there will no longer be a fixed deadline to obtain confirmation. 

Confirmation Requirements

  • The confirmation requirements are changing. Specifically, the SBRA contains two key differences for cramdown plans. First, small business debtors are no longer required to have an accepting impaired class to confirm a cramdown plan. Instead, the plan need only not discriminate unfairly and be fair and equitable with respect to classes of impaired claims and interest. Second, the absolute priority rule is absent from the SBRA. As a result, equity holders can retain interests under the plan without paying higher-priority classes in full.

Preference Litigation and the SBRA

The SBRA also includes two provisions that specifically pertain to preference litigation. Historically, it has been the plaintiff’s burden to prove the elements of a preference under § 547(b), and the defendant’s burden to prove affirmative defenses under § 547(c).  Moving forward, the SBRA amends § 547(b) to provide that the trustee or debtor-in-possession:

“may, based on reasonable due diligence in the circumstances of the case and taking into account a party’s known or reasonably knowable affirmative defenses under subsection (c), avoid any transfer of an interest of the debtor in property.

The transfer still must meet the enumerated elements of a preferential transfer. In other words, the SBRA requires a trustee to take into account a target defendant’s potential affirmative defenses when determining whether to exercise the authority to commence an action to recover a preference. 

The second provision addresses the venue where such preferential transfer actions might be commenced.  The current law requires a preference action to be commenced in the district where the defendant resides if the amount sought to be recovered was less than $13,650. The SBRA increases the monetary threshold to $25,000.


Michael B. Pugh
Thompson, O’Brien, Kemp & Nasuti, P.C.
40 Technology Parkway S., Suite 300
Peachtree Corners, GA 30092
(O) 770-925-0111 | (F) 770-925-8597 |

Michael Pugh is an experienced associate with TOKN’s Bankruptcy, Business Law, and Litigation teams. To learn more about Michael, please visit his profile here. To contact Michael, please see his email above.


Foreclosure on Real Property

The American legal system allows for two types of real property foreclosures: judicial and non-judicial. The judicial system, as the name suggests, requires a secured party involve a court by filing a lawsuit. The non-judicial system allows secured parties to foreclose without the involvement of a court. The non-judicial system is typically a quicker and cheaper process. While Georgia law provides for both methods of foreclosure, Florida only provides for the judicial method. Below we dig deeper into the salient features and differences between foreclosing on real property in Georgia and Florida. 


Typical Foreclosure

Although Georgia law allows for judicial foreclosure of real property, the judicial route is rarely used. The preferred method is the non-judicial method due to the fact it is significantly cheaper and quicker.

Non-Judicial Foreclosure

The non-judicial method of foreclosing in Georgia typically begins with an acceleration or default letter. The letter demands payment of the debt within a pre-determined time frame. Although letters are not a statutory requirement under Georgia’s foreclosure laws, requirements exists in most security deeds and notes drafted in Georgia. After the acceleration or default deadline runs, the secured party must send notice of the initiation of foreclosure proceedings to the debtor to the property address no later than 30 days before the date of the proposed foreclosure. Alternatively, if the debtor provided written notice of a different service address, the secured party must send the notice to the provided address. Furthermore, registered mail, certified mail, or statutory overnight delivery are the proper methods of service. O.C.G.A. § 44-14-162.2 lists other requirements for the notice of foreclosure sale. . 

Georgia law requires that the secured party advertise the sale of the property in the legal organ of the county. The advertisement must run for four weeks prior to the foreclosure. See O.C.G.A. § 9-13-140. The actual foreclosure sale is then conducted on the first Tuesday of the month between 10:00 A.M. and 4:00 P.M. If New Year’s Day and/or the 4th of July fall on the first Tuesday of the month, foreclosure day moves to that Wednesday. See O.C.G.A. § 9-13-161. Finally, the execution and recording of a Deed Under Power in the county where the property is located finalizes the foreclosure sale. 

Additional References

For those interested in the unusual methods of foreclosing on real property in Georgia, refer to the following code sections: Foreclosure of a Mortgage at Law (O.C.G.A. §44-14-180 and §44-14-187); Foreclosure of Deed to Secure Debt (O.C.G.A § 44-14-210); and Judicial Foreclosure in Equity (O.C.G.A. §44-14-49).


Florida foreclosures start in the same manner as Georgia foreclosures. First, an acceleration or default letter is sent if required by the underlying loan documents. Once the deadline to pay the debt runs, the secured party will file a lawsuit against the titleholders. It is important to note that Florida law also requires naming additional defendants in the foreclosure action. Examples of potential additional defendants include, but are not limited to, the holders of liens or judgments recorded after the mortgage being foreclosed, condominium/homeowner’s associations, those claiming the property as homestead, etc.

The Complaint

The complaint should include all facts that substantially affect the plaintiff’s right to foreclose. These facts include execution and delivery of the promissory note and mortgage, the present ownership of the note and mortgage, a description of the real property, the names of the present titleholders, defaults on the note and mortgage, and the amount remaining due. See Fla. Civ. Forms. 1.944a-b. Significantly, if the secured party does not possess the original note and allonges, the complaint should have a count stating that the named plaintiff is entitled to enforce the note. The complaint also needs to be verified. 

The Process

After serving the required defendants with the foreclosure lawsuit, the secured party can then move for final judgment via a motion for default judgment or a motion for final judgment depending on the circumstances. The final judgment will establish a date for the sale of the property. The sale date must be not fewer than 20 days, nor more than 35 days after the final judgment. See F.S. 45.031(1)(a). Florida law requires that the secured party publish the notice of sale once a week for two consecutive weeks in a newspaper of general circulation. See F.S. 45.031(2). Lastly, the foreclosure sale, just like Georgia, is conducted at a public action. 

Wherever you are

Foreclosing on real property is a necessary process. Know your state’s laws, review the statutes, and follow appropriate deadlines.


Viraj Deshmukh

Viraj P. Deshmukh
Admitted in Georgia and Florida

If you would like to learn more about Viraj, please visit his profile or his LinkedIn page.

For information on our Real Estate practice group, click here.

New Georgia Law Simplifies Real Estate Recording Costs

Effective January 1, 2020, the recording costs of various types of real estate instruments in the State of Georgia will be simplified. Once implemented, this change will impact all individuals and businesses that purchase or finance properties in Georgia. 

Prior Law

Under the prior law, the cost of recording real estate instruments in the public record were calculated based upon the type of document, the number of pages it contained, and potential surcharges. In counties with higher populations, surcharges could be included for each filing. For example, if a county had a population greater than 550,000 (as of the 1970 US census), a $1.00 surcharge could be charged on real estate filings. Furthermore, if a county had a population within its unincorporated areas of greater than 350,000 (as of the 1980 US census), a 50¢ surcharge applied to the first page of each filing. This meant that closing professionals had to determine what type of material was being recorded, the number of pages it contained, and any additional surcharges that might or might not apply. Consequently, the calculations could be dizzying, even for experienced professionals!

Moving Forward

Starting next year, a flat fee will be charged for most document types, regardless of the number of pages (subject to certain exceptions).  The chart below shows comparisons of the fee structure for some typical filings:

Type of Document Prior Fee Structure* New Fee
Deed of Transfer (e.g., Limited Warranty Deed, Quitclaim Deed) $10.00 for the first page, $2.00 for each add’l page $25.00
Security Instrument or Modification of Security Instrument (e.g., Security Deed, ALR) $10.00 for the first page, $2.00 for each add’l page $25.00
Assignment, Cancellation, Satisfaction, or Release of Security Instrument (e.g., Security Deed, ALR) $5.00 for the first page, $2.00 for each add’l page, $2.00 for each cross-reference $25.00 per instrument
UCC Fixture Filing, Amendment, Continuation, or Termination  (county or state-wide) $10.00 for the first page, $2.00 for each add’l page $25.00
Liens and Cancellation of Liens (e.g., Fi.Fa., Lis Pendens, hospital lien) $5.00 for the first page, $2.00 for each add’l page, $2.00 for each cross-reference $25.00
Tax Liens and Cancellation of Tax Liens filed by state or local government agency $5.00 for the first page, $2.00 for each add’l page, $2.00 for each cross-reference Same Fee Structure
Affidavit or Certificate (e.g., Scrivener’s Affidavit, Certificate of Trust) $10.00 for the first page, $2.00 for each add’l page, $2.00 for each cross-reference $25.00
Plat of survey $7.50 per page $10.00 per page

* These filing fees are based upon higher-populated county rates.


It is highly recommended that lenders work with their vendors to ensure that the correct recording costs are included in the Good Faith Estimates (GFE) and Closing Disclosures for any transactions which might occur after December 31, 2019.  Likewise, any fees which are collected at the time of the loan closing for the future cancellation of the security instrument should be adjusted for any loans which are anticipated to be paid off and cancelled after December 31, 2019.


All parties should check the GFE and Closing Disclosure to ensure that the full and correct recording costs are included. For example, in a typical residential transaction, the new recording fee will be $50.00** (for a deed of transfer and a Security Deed).  For a typical commercial transaction, the new recording fee will be $125.00** (for a deed of transfer, Security Deed, Assignment of Leases and Rents, and a local/county and state-wide UCC-1 Fixture Filing).  These figures are solely for illustration of a typical Georgia transaction; specific costs will vary based upon the property, the parties, and the type of transaction.

**IMPORTANT NOTE:  Many counties in the State of Georgia have established the ability for e-recording of real estate materials.  The fees associated with e-recording are not impacted by this new law.

Pertinent References: 2019 Georgia Laws Act 231 (H.B. 288); Code Sections 15-6-77, et seq.

Beth Jones, Esq.
Thompson, O’Brien, Kemp & Nasuti, P.C. |

5 Tips for Business Entity Maintenance

These 5 tips are helpful whether you have a new business entity or an existing business entity.

1.     Financial Accounts. Maintain a checking account in the name of the business entity. Do not use any of your personal accounts for business matters. All accounts receivable should be deposited into the business’s accounts. Likewise, all business expenses/payments should be paid from the business’s accounts; this includes any employees’ salaries, overhead expenses, taxes or profits which are distributed to the owners of the business.

2.     Tax Identification Number. Obtain and use a separate tax identification number (“TIN”) (in the US also called a federal employer identification number) for the business entity. Many clients will require this TIN in order to issue payment for goods and services that the business is providing. If the business hires employees or meets other state-specified criteria, then a state-issued TIN may also be required.

3.     Signing Documents. All documents, including leases and contracts, need to be signed by a proper officer or multiple proper officers. For example, a limited liability company that is manager-managed might execute documents by one or more people who are “Manager” or “Managing Member”. Consult the business entity’s Articles of Organization/Incorporation, Operating Agreement, Bylaws, Partnership Agreement or other governing instruments to determine which management or officer roles should be filled, who is authorized to sign documents and agreements for the business entity and how much independent authority has been granted to the business entity’s management and/or officers.

4.     Memorializing Important Events. Big or small, all businesses discuss performance and operations. These discussions may be held in a formal, paneled conference room or over a causal coffee. The point is, there should be a discussion of some sort if the business entity is making decisions about buying, selling, leasing, financing, expanding, retracting, hiring, replacing or terminating, etc. It is recommended that the business memorialize major events with business records, such as meeting minutes or resolutions.  A few examples of major events may include:

¨     Admittance or withdrawal of an interest owner

¨     Authorization for sale, lease or purchase of assets

¨     Authorization for new debt or modification of existing debt (e.g., change of repayment schedule)

¨     Approval of plans for business expansion, redirection, retraction or dissolution

¨     Change of management structure or responsibilities

¨     Hire, replace or terminate employees

¨     Change of financial institutions (i.e., bank accounts)

¨     Bring or defend a lawsuit

These meeting minutes or resolutions should be maintained in a similar way that confidential or private information is maintained by the business.

5.     Annual Registration/Review. Many states in the US require that the owner of a business entity provide updated information, generally on an annual basis. This includes the current mailing addresses for the business and the in-state registered agent, as well as identification of the incumbent officers. Some states have modernized this process to allow for on-line annual registration and the use of a credit card for payment of the annual registration fee. Note: Make sure that you are on the actual Secretary of State’s (or Department of State’s) website and are not redirected to a private vendor whenever you are providing private information on-line, especially a credit card number. Annually consult the business entity’s Articles of Organization / Incorporation, Operating Agreement, Bylaws, Partnership Agreement or other governing instruments and update them when appropriate.

Beth Jones, Esq. | | #tokn |
Thompson, O’Brien, Kemp & Nasuti, P.C.
| 40 Technology Parkway South, Suite 300, Peachtree Corners, Georgia 30092 | (O) 770-925-0111 | (F) 770-925-8597

NDGA Bankruptcy Court Issues Opinion on Future Claimants’​ Representatives

Mass tort chapter 11 bankruptcy cases typically involve two groups of claimants: individuals who know they have been injured (i.e. present claimants) and individuals who do not know of their exposure or injury (future claimants). A chapter 11 debtor typically proposes a plan to either reorganize to keep its business alive and pay creditors over time or to liquidate its assets. But how does a debtor in a mass tort bankruptcy case treat the claims of future claimants, the identities and injuries of which are not yet known? To help preserve the rights of these unknown, future claimants, a debtor may establish a trust under the bankruptcy plan. A chapter 11 plan may provide for a “channeling injunction,” which limits future claimants’ ability to assert claims solely against this trust. A channeling injunction requires the appointment of a legal representative on behalf of the future claimants, commonly referred to as a future claimants’ representative (an “FCR”).

In an April 17, 2019, opinion, the Bankruptcy Court for the Northern District of Georgia answered two questions relating to the appointment of an FCR: (1) What is the proper procedure for the appointment of an FCR?; and (2) What is the proper standard for appointment of an FCR?

In the matter of In re The Fairbanks Company, 2019 WL 1752774, 18-41768-PWB, Judge Bonapfel first determined that the procedures for appointing an FCR permits nominations from any party in interest in the case and requires the Court to independently inquire into the proposed representative’s qualifications and ability to protect the rights of future claimants. The Court then concluded that the proper standard for consideration of an FCR is akin to that of a guardian ad litem, such that the individual must not only be disinterested and qualified, but also objective, independent, and loyally committed to protecting the interests of future claimants.

After an evidentiary hearing, the Bankruptcy Court appointed the debtor’s proposed nominee as the future claimants’ representative.

Michael B. Pugh
Thompson, O’Brien, Kemp & Nasuti, P.C.
40 Technology Parkway S., Suite 300
Peachtree Corners, GA 30092
(O) 770-925-0111 | (F) 770-925-8597 |