Bill Text: GA HB445 | 2011-2012 | Regular Session | Introduced

Georgia House Bill 445 (Prior Session Legislation)

Introduced

Bill Title: Property; foreclosure; provide definitions; change multiple provisions

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Introduced - Dead) 2011-03-04 - House Second Readers [HB445 Detail]

Download: Georgia-2011-HB445-Introduced.html

11 LC 29 4640ER

House Bill 445

By: Representatives Welch of the 110th, Lindsey of the 54th, and Evans of the 40th

A BILL TO BE ENTITLED
AN ACT

To amend Title 44 of the Official Code of Georgia Annotated, relating to property, so as to provide for security deposits when residential rental property has been foreclosed upon; to change provisions relating to judgments and writs of possession; to provide for a definition; to provide for rights and remedies of tenants when their rental property has been foreclosed upon; to provide for notices to tenants who reside in property being foreclosed upon; to change provisions relating to sales made on foreclosure under power of sale; to prohibit wrongfully inducing a tenant to vacate property being foreclosed upon; to provide for specified civil damages; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Title 44 of the Official Code of Georgia Annotated, relating to property, is amended in Article 2 of Chapter 7, relating to security deposits, by adding a new Code section to read as follows:

"44-7-38.

If a tenant in a residential dwelling unit which has been foreclosed upon has paid a security deposit and the foreclosed upon landlord is holding such security deposit, the holder of the landlord's interest in the dwelling unit at the time of the termination of tenancy shall return such security deposit and any accrued interest that is duly owed to the tenant, whether or not such security deposit is transferred with the landlord's interest by law or equity, and regardless of any residential rental agreements between the original landlord and his or her successor in interest. Nothing in this Code section shall be construed to prevent a landlord from making lawful deductions from the security deposit in accordance with this article."

SECTION 2.

Said title is further amended by revising subsection (a) of Code Section 44-7-55, relating to judgments and writs of possession, as follows:

"(a) If, on the trial of the case, the judgment is against the tenant, judgment shall be entered against the tenant for all rents due and for any other claim relating to the dispute. The court shall issue a writ of possession, both of execution for the judgment amount and a writ to be effective at the expiration of seven days after the date such judgment was entered, except as otherwise provided in Code Section Sections 44-7-55.1 and 44-7-56."

SECTION 3.

Said title is further amended by adding two new Code sections to read as follows:

"44-7-55.1.

(a) As used in this Code section, the term 'bona fide' means a lease or tenancy when:

(1) The tenant is not the mortgagor or grantor or the child, spouse, or parent of the mortgagor or grantor under the contract;

(2) The lease or tenancy was the result of an arm's length transaction; and

(3) Rental payment required under the lease or tenancy is not substantially less than fair market rent for the property, unless the unit's rent is reduced or subsidized due to a federal, state, or local subsidy.

(b) In the case of a foreclosure on any residential property, any immediate successor in interest in such property who acquires complete title to such property after the foreclosure sale shall assume the interest subject to:

(1) The requirement that any notice to vacate issued to a bona fide tenant be provided to such tenant at least 90 days prior to the effective date of such notice; and

(2) The rights of any bona fide tenant:

(A) Under any bona fide lease entered into before the foreclosure sale, which tenant may elect to continue his or her tenancy in the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease after the date of sale of the unit to a purchaser who will occupy the unit as a primary residence; in the case of occupancy by a purchaser who will occupy the unit, such purchaser shall provide notice to vacate to a bona fide tenant at least 90 days prior to the effective date of such notice; or

(B) Without a lease or with a lease terminable at will under Georgia law, subject to the receipt by the tenant of the 90 day notice required under paragraph (1) of this subsection.

(c) Any person or entity, or such person's or entity's agent or employee, who terminates a tenancy in violation of the provisions of this Code section by failing to give the required notice or by prohibiting a tenant from continuing to occupy the premises through the remaining term of a lease shall be liable for damages in the amount of $3,000.00 per violation, plus an award for reasonable and necessary attorney's fees and litigation costs in addition to actual damages.

(d) The relationship of the successor in interest and a bona fide tenant who continues to occupy the premises after foreclosure shall be that of a landlord and tenant for all purposes recognized by Georgia law. Unless a new lease is adopted by both the successor in interest and the bona fide tenant, the terms of the lease governing the relationship between the former landlord and tenant shall remain in effect for the duration of the tenancy.

44-7-55.2.

(a) No person or entity, or such person's or entity's agent or employee, who has initiated a proceeding to foreclose a mortgage on a residential property, who takes title to a residential property at a foreclosure sale, or who is the mortgagor prior to foreclosure shall make any communication to induce a tenant to vacate the property except through a bona fide monetary offer. An offer shall be considered bona fide if it is a certain and unambiguous offer to induce the tenant to leave made in good faith. Any bona fide offer shall be in writing and shall include a notice of the tenant's rights during foreclosure in the form set forth in subsection (e) of this Code section.

(b) No person or entity, or such person's or entity's agent or employee, who has initiated a proceeding to foreclose a mortgage on a residential property, who takes title to a residential property at a foreclosure sale, or who is the mortgagor prior to foreclosure shall, upon acceleration of the debt and continuing through one year after the transfer of title following the foreclosure sale, take any of the following actions to induce a tenant to accept any offer to vacate the property:

(1) Mischaracterizing or misrepresenting the rights of the tenant under any federal or state law or municipal ordinance;

(2) Implying the tenant is obligated to accept an offer or implying consequences against the tenant for failing to accept an offer; or

(3) Discontinuing electricity, heat, or other utilities; failing to maintain the common areas or facilities of the property; or otherwise failing to maintain the premises in a habitable condition.

(c) Any person or entity, or that person's or entity's agent or employee, who violates the provisions of this Code section shall be liable for damages in the amount of $3,000.00 per violation, plus an award for reasonable and necessary attorney's fees and litigation costs in addition to actual damages. Nothing in this subsection shall limit the liability of a person, or a person's agent or employee, who violates any other law or regulation.

(d) Any person or entity, or such person's or entity's agent or employee, who makes a demand for payment of rent on a residential tenant living in property noticed for foreclosure or sold at foreclosure, when such person or entity is not entitled to such rent, shall be subject to damages in the amount of three times the rental amount sought plus an award for reasonable and necessary attorney's fees and litigation costs.

(e) The notice to tenants required by subsection (a) of this Code section shall be in the following form:

'NOTICE TO TENANTS

THE PROPERTY WHERE YOU LIVE HAS BEEN OR MAY BE SOLD IN A FORECLOSURE SALE. WITH LIMITED EXCEPTIONS, GEORGIA LAW PROTECTS YOUR RIGHT TO REMAIN IN YOUR HOME AFTER A FORECLOSURE SALE. FORECLOSURE ALONE IS NOT GROUNDS FOR EVICTION OF A TENANT. YOU ARE PROTECTED FOR AT LEAST 90 DAYS EVEN IF YOU DO NOT HAVE A LEASE. IF YOU DO HAVE A LEASE, YOU MAY BE ENTITLED TO REMAIN IN YOUR HOME UNTIL THE END OF THE LEASE TERM.

INDIVIDUALS CAN BE SUBJECT TO CIVIL PENALTIES FOR TRYING TO FORCE YOU TO LEAVE YOUR HOME IN ANY OTHER MANNER, INCLUDING SHUTTING OFF UTILITIES OR OTHER VITAL SERVICE OR FAILING TO MAINTAIN THE PREMISES. YOU MAY, HOWEVER, ACCEPT FINANCIAL COMPENSATION FOR LEAVING VOLUNTARILY IF THE NEW OWNER OFFERS SUCH COMPENSATION.

IF SOMEONE IS TRYING TO CONVINCE YOU TO LEAVE AND YOU HAVE ANY QUESTIONS ABOUT YOUR RIGHTS, CONSULT WITH AN ATTORNEY.

IF YOU NEED FURTHER INFORMATION, PLEASE CALL THE GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS OR VISIT THE DEPARTMENT'S WEBSITE AT: WWW.DCA.STATE.GA.US.'"

SECTION 4.

Said title is further amended by revising Code Section 44-14-162, relating to sales made on foreclosure under power of sale, as follows:

"44-14-162.

(a) No sale of real estate under powers contained in mortgages, deeds, or other lien contracts shall be valid unless the sale shall be advertised and conducted at the time and place and in the usual manner of the sheriff's sales in the county in which such real estate or a part thereof is located and unless notice of the sale shall have been given as required by Code Section 44-14-162.2. If the advertisement contains the street address, city, and ZIP Code of the property, such information shall be clearly set out in bold type. In addition to any other matter required to be included in the advertisement of the sale, if the property encumbered by the mortgage, security deed, or lien contract has been transferred or conveyed by the original debtor to a new owner and an assumption by the new owner of the debt secured by said mortgage, security deed, or lien contract has been approved in writing by the secured creditor, then the advertisement should also include a recital of the fact of such transfer or conveyance and the name of the new owner, as long as information regarding any such assumption is readily discernable by the foreclosing creditor. Failure to include such a recital in the advertisement, however, shall not invalidate an otherwise valid foreclosure sale.

(b) The security instrument or assignment thereof vesting the secured creditor with title to the security instrument shall be filed prior to the time of sale in the office of the clerk of the superior court of the county in which the real property is located.

(c) A person who takes title, as a result of a foreclosure sale, to a residential property containing one or more dwelling units shall provide notice to all possible tenants in English by posting a notice no later than ten business days after the foreclosure sale, in accordance with the provisions of subsection (e) of this Code section. The notice shall be in the following form:

'NOTICE TO TENANTS

THE FORMER OWNER OF THE PROPERTY WHERE YOU CURRENTLY LIVE [insert property address] NO LONGER OWNS THE PROPERTY AS A RESULT OF A FORECLOSURE. FROM THE TIME YOU RECEIVE THIS NOTICE AND UNTIL FURTHER NOTICE, YOU SHOULD PAY RENT IN THE AMOUNT YOU HAVE BEING PAYING TO YOUR PREVIOUS LANDLORD TO [insert name, address, and phone number of person to whom rent is due]. PLEASE SEND RENT BY [insert method of transmission].

WITH LIMITED EXCEPTIONS, GEORGIA LAW PROTECTS YOUR RIGHT TO REMAIN IN YOUR HOME. FORECLOSURE ALONE IS NOT GROUNDS FOR EVICTION OF A TENANT. YOU ARE PROTECTED EVEN IF YOU DO NOT HAVE A LEASE.

IF YOU HAVE A LEASE, ARE NOT THE OWNER OF THE RESIDENCE, AND THE LEASE REQUIRES PAYMENT OF RENT THAT AT THE TIME IT WAS ENTERED WAS NOT SUBSTANTIALLY LESS THAN FAIR MARKET RENT FOR THE PROPERTY, YOU MAY BE ENTITLED TO REMAIN IN OCCUPANCY FOR THE REMAINDER OF YOUR LEASE TERM. IF YOU DO NOT HAVE A LEASE, YOU WILL BE ENTITLED TO REMAIN IN YOUR HOME UNTIL 90 DAYS AFTER ANY PERSON OR ENTITY ACQUIRES TITLE TO THE PROPERTY.

IF SOMEONE IS TRYING TO CONVINCE YOU TO LEAVE YOUR RESIDENCE AND YOU HAVE ANY QUESTIONS ABOUT YOUR RIGHTS, CONSULT WITH AN ATTORNEY.

IF YOU NEED FURTHER INFORMATION, PLEASE CALL THE GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS OR VISIT THE DEPARTMENT'S WEBSITE AT: WWW.DCA.STATE.GA.US.'

(d) Nonpayment of rent to the successor in interest during the month of a scheduled foreclosure sale shall not be grounds for lease termination or eviction; provided, however, that this shall not excuse a tenant's duty to pay rent owed during the aforementioned period.

(e) The notice to tenants in a foreclosed property required by subsection (c) of this Code section shall be in boldface, 14 point type and shall be printed on colored paper, and the title of the notice shall be in boldface, 20 point type. The notice shall be on its own page. The notice shall be delivered to the tenant, by certified mail, return receipt requested, and by first-class mail to the tenant's address at the property if the identity of the tenant is known, and by first-class mail delivered to 'occupant' if the identity of the tenant is not known. For buildings with five or more dwelling units, a legible copy of the notice shall also be posted outside of each entrance to the building. The notice shall be deemed received by any tenants in the subject property three business days after the postmark date on the first-class mail.

(f) A tenant shall not be responsible for accrued rental amounts due to the successor in interest after a foreclosure sale involving his or her residential dwelling until such time as he or she has received the statutorily required notice as set forth in subsection (e) of this Code section. Nonpayment of rent by the tenant prior to receipt of such notice shall not be grounds for lease termination or eviction by the successor in interest."

SECTION 5.

All laws and parts of laws in conflict with this Act are repealed.