real estate Archives - Thompson O'Brien Kemp & Nasuti, P.C.

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.

GEORGIA FORECLOSURE

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 FORECLOSURE

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.

Author

Viraj P. Deshmukh
Admitted in Georgia and Florida
vdeshmukh@tokn.com

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

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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.

Lenders

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.

Buyers/Borrowers/Sellers

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.

FORECLOSING ON REAL PROPERTY IN GEORGIA AND FLORIDA