Georgia State Bar Real Property Law Section: 2004 Legislative Initiative

Throughout the firm's history, Smith, Gambrell & Russell lawyers have held leadership positions in national, state and local bar associations. I am a member of the Executive Committee of the State Bar of Georgia Real Property Law Section and was named the Section's Legislative Chairman in May 2003. In this capacity, I recently led a successful effort to enact legislation in Georgia that should facilitate real estate closings for both commercial and residential sellers.

Throughout the firm’s history, Smith, Gambrell & Russell lawyers have held leadership positions in national, state and local bar associations. I am a member of the Executive Committee of the State Bar of Georgia Real Property Law Section and was named the Section’s Legislative Chairman in May 2003. In this capacity, I recently led a successful effort to enact legislation in Georgia that should facilitate real estate closings for both commercial and residential sellers.

The Georgia General Assembly is a part-time legislative body that meets for only 40 days each year and has a very limited legislative staff. Given this, the State Bar of Georgia has historically played a major role in proposing and advising on legislation that affects the whole spectrum of legal issues handled by lawyers in Georgia. Each year, the various sections in the State Bar are encouraged to propose changes to the Georgia Code that would enhance the practice of law for that section’s particular practice area. Each section is also called upon to comment and advise on legislation proposed by others that would affect that section’s practice area.

Throughout the summer of 2003, my legislative subcommittee solicited input from members of the Real Property Law Section on issues and problems that affect real estate closings and practice in Georgia that could be addressed by legislative changes. A common complaint received by the subcommittee was the difficulty encountered by closing attorneys in clearing up old judgment liens that had been filed against a property seller in prior years and paid off, but not yet cancelled in the county courthouse records. Even if the judgment lien has been fully paid off, the filed lien remains a cloud on title for all real estate owned by that seller in that particular county until the lien itself is cancelled of record. Then existing Georgia law set forth a general obligation to cancel judgment liens after full payment, but provided no penalties or alternatives if the judgment creditor failed to cancel its lien at the courthouse.

Since the judgment creditor had already received its money and often had limited motivation to cancel its lien in the courthouse records, closing attorneys asked for additional tools to require judgment creditors to cancel stale liens in a timely manner.

I chose this issue as the Section’s legislative initiative for the 2004 General Assembly Session. The first step was to draft a proposed bill. Georgia already had on its books legislative provisions that require the holder of a mortgage to cancel that mortgage promptly once the loan is paid off and provide penalties and alternative mortgage cancellation methods when mortgage holders fail to cancel their mortgage upon receipt of full payment. These existing provisions in the Georgia Code have helped closing attorneys get old mortgages cancelled in a more timely manner. Our subcommittee decided that borrowing this existing legislation for mortgages and applying it to judgment liens would be the most efficient way to help clear up stale judgment liens as well. From past experience, we believed that modifying legislative provisions already on the books would result in an easier path in the General Assembly than crafting new legislation from scratch.

The subcommittee took Georgia’s statutory language for mortgage cancellations and revised it to apply to judgment liens, making a number of corrections and improvements based on perceived problems with the existing mortgage cancellation law. I also drafted a complete legislative summary and explanation of the bill, which was proposed to the Executive Committee of the Real Property Law Section for comment in October 2003. The Executive Committee suggested a few revisions, which were incorporated in the revised bill.

The next step was to submit the bill to the full State Bar of Georgia for its approval and adoption as a formal legislative proposal of the State Bar. The bill was submitted to the State Bar and assigned to the State Bar’s Advisory Committee on Legislation. The Advisory Committee reviews all legislative proposals from all sections of the Bar and forwards to the State Bar Board of Governors those proposals that it feels are worthy to be State Bar legislative initiatives. In December 2003, I presented the bill to the Advisory Committee, which approved the proposal as a State Bar initiative. The bill was then submitted to the Board of Governors, which adopted it as a State Bar legislative initiative in early January 2004.

The Georgia General Assembly begins its annual legislative session in mid-January and each session lasts 40 days, although the duration of the General Assembly actually extends longer than 40 calendar days since the General Assembly takes a number of recesses during each session. The General Assembly is in its second year of divided government, with the State House of Representatives controlled by the Democratic Party and the State Senate and Governor’s Office controlled by the Republican Party, which has made all legislative initiatives more challenging. 2004 is an election year, which also historically makes passing legislation more difficult. Finally, early this year, all seats in the General Assembly were the subject of reapportionment litigation in federal court, which added a further layer of uncertainty to the legislative process.

The first step in proposing the bill was to obtain a legislative sponsor among the members of the General Assembly and have that sponsor submit the proposal as a formal bill. The State Bar requested Rep. Barry Fleming of Augusta to sponsor the Real Property Section’s bill. He agreed to do so and submitted the bill in the State House of Representatives as House Bill 1431.

The next step in the legislative process was a series of hearings before the House Judiciary Committee. House Bill 1431 was first assigned to a commercial law subcommittee, and I testified for the bill before that subcommittee. The subcommittee approved the bill and forwarded it to the full Judiciary Committee for its consideration. I also testified before the full Judiciary Committee, which passed the bill on to the full House on March 2, 2004. The Georgia House of Representatives passed the bill on March 9, 2004, whereupon it went to the Georgia Senate. In the Senate, House Bill 1431 was assigned to the Senate Special Judiciary Committee. I testified before the Special Judiciary Committee, which unanimously approved the bill for passage on March 24, 2004. The bill was then sent to the full Senate, which passed it on April 7, the last day of the legislative session. Governor Sonny Perdue signed the bill on May 13, 2004, and the bill became effective as part of the Georgia Code on July 1, 2004. The newly enacted statute can be found in the Official Code of Georgia Annotated Section 9-13-80.

Passage of House Bill 1431 was complicated by all the background issues swirling around the General Assembly as the bill progressed. On the date of the House Judiciary Subcommittee hearing, the Georgia House was debating a controversial constitutional amendment prohibiting gay marriages. On that day, the State Capitol was surrounded by hundreds of vocal demonstrators on both sides of this issue. On the date of the full House Judiciary Committee hearing, the U. S. District Court hearing the reapportionment case issued its ruling adopting new legislative districts for both the State House and State Senate, an issue of obvious personal interest to every member of the General Assembly. Finally, on the date of the Senate Special Judiciary Committee hearing, the Speaker of the House took the unusual step of replacing the House Judiciary Committee Chairman mid-session over a long-standing dispute involving tort reform. This development delayed all business in both committees until the fallout settled.

In addition to my work on House Bill 1431, I also made comments and recommendations (both in favor of and strongly opposing) to members of the General Assembly on six other bills affecting real estate law practice in Georgia and testified in person on proposed changes to the Georgia electronic commerce law that would allow electronic closings of real estate transactions. I very much enjoyed this legislative project for the State Bar and had a real education about how the legislature works in Georgia. I have been reappointed as the Bar’s Real Property Section Legislative Chairman for next year and look forward to going through this process again in 2005.

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