Real Property - Linda S. Finley

• Publication year: 2004

Real Propertyby Linda S. Finley^*

The Author believes it appropriate to dedicate this Article to a man who has served as a mentor and expert for hundreds (perhaps thousands) of real estate lawyers in the State of Georgia. Affectionately known as "The Death Ray" by his students, who at one time or another admired or feared him, Professor James C. Rehberg had the knack for making a somewhat dry topic come alive (perhaps the exception being the Rule Against Perpetuities). Professor Rehberg was honored in early 2004 by students, faculty, and alumni at his official retirement. While the Author can do little to make this survey come alive as Professor Rehberg surely would have done, nonetheless, it is presented with our friend, mentor, and colleague, James C. Rehberg, in mind.

I. Introduction

This Article discusses case law and other developments in Georgia real property law from June 1, 2003 through May 31, 2004. In the interest of space, however, much must be omitted. The decisions below were chosen for their significance to real property law and their significance to any attorney who either regularly, or from time to time, practices in the field of real property. Perhaps the most significant opinion in the area of real property law during the survey period was the Georgia Supreme Court's opinion that only attorneys licensed in the state, with a minor exception, may conduct real property closings in Georgia.¹ Both advocates seeking non-attorney closings and attorneys seeking a mandate that only Georgia lawyers be allowed to preside over real estate closings, claimed they were protecting the consumer. The supreme court ultimately settled the issue as is discussed below.

II. Unauthorized Practice of Law

The Georgia Supreme Court, in a unanimous opinion, decided that the preparation and execution of a deed of conveyance for another and the facilitation of its execution by anyone other than a licensed Georgia attorney constituted the unauthorized practice of law.² The ruling put an end to the issue of whether "witness-only closings" would violate the rule prohibiting the unauthorized practice of law.³ The court noted that it had previously

issued formal advisory opinions which confirmed that a lawyer cannot delegate responsibility for the closing of a real estate transaction to a non-lawyer and required the physical presence of an attorney for the preparation and execution of a deed of conveyance (including, but not limited to, a warranty deed, limited warranty deed, quitclaim deed, security deed, and deed to secure debt).⁴

The proponents of "lay conveyancing" (described by the court as "the practice by which non-lawyers close real estate transactions, provide settlement services, or select, prepare and complete certain real estate closing documents")⁵ or witness only closings (described by the court as closings where "notaries, signing agents and other individuals who are not a party to the real estate closing preside 'over the execution of the deeds of conveyance and other closing documents, but purport to do so merely as a witness and notary, not as someone who is practicing law'"),⁶ argued that requiring the services of a Georgia attorney for real estate closings and the execution of deeds of conveyance harmed the public interest by increasing costs and stifling competition.⁷ The court rejected this argument, determining that the public interest was best protected when an attorney trained to recognize the issues at closing oversees the transaction.⁸ The court stated that should attorneys fail in their duties, the attorneys could be held accountable through a malpractice or bar disciplinary action.⁹ "In contrast, the public has little or no recourse if a non-lawyer fails to close the transaction properly. It is thus clear that true protection of the public interest in Georgia requires that an attorney licensed in Georgia participate in the real estate transaction."¹⁰ The opinion, however, did not change section 15-19-52 of the Official Code of Georgia Annotated ("O.C.G.A."),¹¹ which allows non-lawyers to prepare documents to which they are a party so long as no fee is charged.¹²

III. Title to Land

In Mansour Properties, LLC v. I-85/Ga. 20 Ventures, Inc.,¹³ the parties owned approximately 110 acres ofundeveloped land in Gwinnett County. I-85/Ga. 20 Ventures, Inc. ("I-85"), the assignee of a fifty-percent interest in the property, petitioned for statutory partition ofthat real property. The property was jointly held by the owners as tenants in common pursuant to a tenancy in common agreement. Under the agreement each party agreed to be responsible for its share ofpromisso-ry notes. Mansour took the role of investor, providing the cash for closing, while I-85 was to market the property for sale. The agreement prohibited either party from transferring or encumbering the property without the permission of the other. A party could transfer its interest in the property if it had paid its portion of the notes held. First, however, that party was to notify the other party of the potential purchase, the price, and certify that the purchaser would assume the selling party's rights and obligations. The non-selling party would have a right of first refusal.¹⁴

I-85 sought to partition the property without first offering to sell its interest to Mansour. The trial court determined that partitioning of the property would depreciate its value. The trial court ruled that the property would be sold at public sale unless Mansour deposited $12,202,666.67 into the court's registry, which represented Mansour's portion of the appraised value.¹⁵

Mansour appealed and claimed that the tenancy in common agreement prohibited partitioning.¹⁶ Relying on Rhodes v. Lane,¹⁷ the supreme court agreed and held that the right to first refusal in the agreement implicitly precluded partitioning until Mansour was given the opportunity to purchase I-85's interest.¹⁸ The agreement also required I-85 to certify that a potential purchaser would assume I-85's duties, which included its duty to market the property. Certification would not be possible if the property was offered for public sale.¹⁹

In 1845 La Dawn Lane, LLC v. Bowman,²⁰ the supreme court considered who had proper title to a parcel of land originally planned as a street, but never opened.²¹ Sarah O. Bowman and Dorothy P. Bryant lived next door to one another on Cardova Street in Atlanta. Running between their properties was the land in dispute, a rectangular parcel originally planned as a street. Both Bowman and Bryant's deeds described one boundary of their respective properties by referencing the land strip as a "future street."²²

The subdivision where Bowman and Bryant lived was originally developed in the 1940s by B.A. Martin. The chains of title descended to Bowman and Bryant from Martin.²³ The strip of land between Bowman and Bryant was designated on the subdivision plat as "Future Street," but the parcel was "never . . . accepted as a public street, either expressly or implicitly, by either Fulton County or the City of Atlanta following annexation."²⁴ Subsequently, 1845 La Dawn Lane, LLC ("La Dawn") purchased a 3.29 acre tract known as Little Woods, which had not been part of the subdivision and was never owned by Martin. La Dawn claimed that Martin never transferred title to the parcel designated as the future street. Rather, La Dawn claimed that title to the strip remained in Martin's daughter as Martin's beneficiary under his will. By quitclaim deed, Martin's daughter transferred all rights to the strip to Southern Investments Associates from which La Dawn claimed the future street parcel along with Little Woods.²⁵

Bowman and Bryant brought a quiet title action to establish that each had fee simple title to the centerline of the future street parcel. Following a hearing before a special master, the special master found that fee simple title resided in Bowman and Bryant because, as a matter of law, when Martin sold the lots that Bowman and Bryant now owned, he also conveyed the fee interest to the centerline of the undeveloped street. The trial court adopted the special master's report and La Dawn appealed.²⁶

The supreme court held that designation of the parcel as a "future" street was insufficient to serve as a grantor's express intent to reserve title in himself.²⁷ Further, fee interest of the parcel passed when the grantor conveyed title to the abutting property owners' predecessors-in-title; thus, the later quitclaim deed from grantor's daughter could pass no title to La Dawn.²⁸ La Dawn also argued that the parcel had been abandoned by the adjoining owners, but the court held that title to that parcel could not pass from abutting property owners by mere abandon-ment.²⁹ Finally, La Dawn argued that it had a right of access over the parcel onto its property because the parcel was dedicated as a road.³⁰ The court determined that "[a] right of public access to a road does not occur until the road has been dedicated and accepted, either expressly or impliedly, by the governing body."³¹ Because the parcel had never been accepted as a road, La Dawn's argument failed.³²

In Parks v. Stepp,³³ two adjoining land owners disputed the ownership of a tract of land granted to both by a common grantor. A 2000 survey revealed that the metes and bounds ofthe property deeded to the parties overlapped by 3.93 acres. Parks filed a complaint in ejectment that concerned the disputed land.³⁴

The evidence at trial established that Stepp had obtained title through his predecessor who had entered into a contract with the original developer of the land. A plat of the property, certified by a registered land surveyor, was attached and incorporated into the original contract for sale.³⁵ "[The] contract with the attached plat was filed and recorded in the office of the clerk of the superior court of Dawson County on January 30, 1978."³⁶ When Stepp obtained the property from his predecessor, the...