Georgia REIA's Final Legislative Report 2007

GaREIA Lobbyist's Final Legislative Report for the 2007 Session of the Georgia General Assembly

Wednesday, June 27, 2007

RE: Legislative Report # 2007-13 [FINAL]

I can’t say for certain that the 2007 Session of the Georgia General Assembly was its longest, but I’d bet $103.00 on it—one dollar for each day. It was a year of breakthroughs, victories and setbacks for GaREIA. Most of all, our presence at the Capitol advanced—our ultimate goal for the next few years.

We were consulted on, and involved with, bills and resolutions more this year than last year, and last’s year’s participation was more than the year before that. We created and submitted our own bill to cure homeowners’ associations abuse of landlords, which soared, and then was grounded [we have another shot at it next session]. And, for the first time, concerning a study committee that was to take up three new lien law bills, GaREIA was appointed to an Advisory Committee—a seat at the table. The resolution didn’t make it before the Legislature adjourned at midnight of the 40th day [12:02 a.m. of the “41st” Legislative Day, if the truth be known, but, who’s counting?], but our appointment presents an opportunity to be involved in the three bills’ markups during the summer, autumn and 2008 Session.

On another front, one of our most worthwhile and successful projects is GaREIA’s Legislative Intern Program, which the organization initiated after the 2005 Session. This year’s intern, Anne Kuhns, a third-year student at Georgia State University Law School, did a remarkably good job. She’s bright, dependable, enthusiastic and always willing to help or to take on an additional chore. She also has a winning personality, and based upon the feedback I received from legislators and staff, people liked her a lot—a good reflection upon GaREIA. I like to think that the program is worthwhile for our interns also. One of the most favorite parts of my job is teaching young persons the politics, personalities, history, physical layout, strategies, tactics and nuances of the Georgia Legislature—as well as exposing a few skeletons in the closets under the Gold Dome. I strongly recommend that GaREIA continue this program.

All in all, a very good year, and, without question, one in which we advanced.
Here are “Selected Bills and Resolutions”—matters of particular importance to GaREIA, whether they passed or not. Following that is the very important “Leftover Bills and Resolutions.” Since we are in the middle of the 2007–2008 Term of the General Assembly, any bill or resolution that was introduced this year [except, of course, those that were passed, defeated or vetoed], remain active, or “leftover,” without having to be refiled.

SELECTED BILLS AND RESOLUTIONS.

House Bill 261. Property owners’ associations; covenants running with the land; changes to limitations on amendments.

This is the first bill that GaREIA has ever originated. It was designed to curb several abuses of landlords by homeowners’ associations that have cropped up and accelerated since homeowners’ associations rights were strengthened by laws passed in the mid-1990s. Most egregiously, current law allows an HOA to ban leasing in a subdivision after an investor buys rental property. As one lawmaker sympathetic to our cause said, “That’s changing the rules after the game has begun.” HB 261 would have restored the law to pre-1994 status, where protections were in place against this and other bad HOA practices.

What’s the hope for the future? Since we are in the middle of the 2007–2008 Term, HB 261 is still alive and can be taken up again next year. The time to prepare and plan for that is now because January, when the 2008 Session begins, is too late. I am very hopeful that GaREIA will continue this fight and its legislative presence. As I told one lawmaker who was sort of sitting on the fence on HB 261, “There are a lot more homeowners than homeowner association officers.” Another avenue for us to explore during the summer is negotiating with those law firms and HOA officers opposed to our bill to try and develop an alternative bill that everyone could live with.

A very hearty and sincere thanks to the many persons, both on and off the Legislative Committee, who worked on this bill.

Senate Bill 115. Residential/General Contractors; revise the licensure procedure. HB 224. State Licensing Board for Residential and General Contractors; change certain provisions.
This law has been on the books since 2004, O.C.G.A. §§ 43-41-1 through 43-41-17, and it will finally kick in on July 1, 2008. These two lengthy and convoluted bills make several changes to the 2004 law, much of it minor, housekeeping or clarifying. However, there are a couple of new provisions:

The 2004 law established two divisions, the “general contractor” and the “residential contractor.” This bill would permit the licensure’s governing board to create further divisions within the general contractor category based upon “financial criteria.”

“Specialty contractors”—e.g., electricians, plumbers, HVAC, telephone, gas, etc., workers [who have their own licensing boards]—would be exempt from this board for non-specialty work incidental to their specialty work where such incidental work does not exceed either $10,000.00 or 25% of the total value of the work—whichever is greater.

Work on the construction or installation of mobile homes is specifically excluded but installation of “industrialized buildings”—those structures constructed from prefabricated parts that are assembled at a worksite and then transported to and secured upon a separately laid foundation—are specifically included. Governor signed May 29th. Effective date: May 29, 2007.

NOTE: No item—except, of course, our HB 261—has generated more emails and calls to me than SB 215 and the entire licensing law. Accordingly, this summer I plan on writing a line-for-line, plain English, nonlegalese analysis of this law which will be sent out to all members, just as this final Legislative Report is being transmitted. At that point, we may find that GaREIA needs to include some amendments to the law in a 2008 Legislative Package.

SB 94. Dispossessory Proceedings; clarify the process for judgments by defaults.
This pro-landlord bill, which GaREIA supported, clarifies two things: 1. When a lease states that a certain fee is nonrefundable, it is not part of the security deposit and it is not included in that portion of Georgia’s landlord-tenant law dealing with security deposits; and 2. If a tenant doesn’t answer a dispossessory warrant, a writ of possession shall issue and—regardless of what Georgia procedural laws may apply to other areas of the law—in landlord-tenant cases, “[t]he court . . . shall not require any further evidence nor hold any hearings and the [landlord] shall be entitled to a verdict and judgment by default.” Governor signed May 24th. Effective date: July 1, 2007.

HB 35. Credit report agency; person request security freeze; provisions. HB 38. Credit report; place security freeze; provisions. HB 130. Identity theft; security freezes; definitions; provisions.

These three bills, of similar natures and language, would provide mechanisms for all consumers to control the distribution of their credit reports by credit reporting agencies, such as Equifax, both with regard to who gets the report or during what time period it is distributed or both. Nominal fees are required for some of this.

GaREIA supports the bills, but has problems with one provision: the turnaround time is too long from when prospective tenants direct an agency to distribute their reports to prospective landlords to when the agency has to send it out. We’ve been engaged in this battle for a while, with ups and downs—including an effort to sneak it, together with our problem language, into another bill on the late afternoon of the last day of the 2007 session.

Subcommittee meetings on these bills are to be scheduled during the summer and autumn.
Senate Resolution 636. Senate Comprehensive Lien Law Study Committee; create.

The importance to GaREIA of this resolution exceeds its subject matter. For the first time, an investors group in Georgia is among those interest groups that have been appointed to an advisory committee. This means that GaREIA from the beginning will sit at the table among Realtors, mortgage bankers, home builders, apartment owners, contractors and others to craft this legislation.

This resolution grows out of SBs 63, 64 and 65, three pending bills filed this year. SBs 63 and 65 would impose informational and accountability tasks upon a contractor hired by a single-family residence; failing to complete these tasks would invalidate liens. SB 64 simply provides an expedited way of dealing with liens that have been wrongly filed.

HB 380. Tax collectors and commissioners; bill or notice of mailing; change certain provisions.
This bill, dealing with penalties for overdue property taxes, provides that a new purchaser for the first year won’t have to pay a onetime 10% penalty or the 1% monthly interest until two months after the tax bill has been forwarded to him or her. Governor signed May 16th. Effective date: July 1, 2007.

SB 114. Real Estate Brokers; criminal convictions; terms/conditions of sentence; provide that certain time periods shall pass; application for licensure.

This bill covers a lot of ground. It increases administrative punishment for real estate appraisers who commit serious or multiple criminal. (During the legislative process, the “appraisers” provisions were appended to the original “brokers” language.) And, a former appraiser who let his or her classification lapse would have to renew it in five years to avoid starting the application process all over again; current laws gives them 10 years.
The bill also allow a Realtor, etc., to talk to the other party represented by another Realtor if the second Realtor doesn’t provide “negotiation services,” in other words, all the second Realtor does is place the property in a multiple service listing.

And, the bill also amends administrative punishment for licensees who commit serious or multiple criminal offenses; amends some continuing education requirements; and eases CE requirements for licensees currently serving in the armed forces. Governor signed May 24th. Effective date: July 1, 2007.

HB 128. State sales and use tax; certain school items; clothing; exemption.
This is this year’s annual tax-free holiday bill. October 4th–7th: energy efficient dishwashers, clothes washers, air conditioners, ceiling fans, fluorescent light bulbs, dehumidifiers, programmable thermostats, refrigerators, doors or windows. August 2nd–5th: includes personal computers, keyboards, PDAs, handheld computers, monitors, other peripheral devices, modems and nonrecreational software. Two rules: price cannot be over $1,500.00 each and the purchase is for noncommercial home or personal use. Governor signed May 18th. Effective date: May 18, 2007.

HB 136. Public policy; contract of insurance; indemnification; provisions.
In a nutshell, this bill would reverse longstanding law by forbidding subcontractors from indemnifying (almost always, by insurance) prime contractors against negligence. Or, as one Georgia appellate case put it, "Public policy is reluctant to cast the burden for negligent actions upon those who are not actually at fault.” [Of course, the prime contractor can always obtain his or her own insurance for their own mistakes]. Governor signed May 18th. Effective date: July 1, 2007.

HB 471. Local government; privately constructed water systems; requiring ownership transfer; prohibit.

This rural bill only applies to local governments and other entities like water-system authorities that are outside the City of Atlanta, the 16-county Metropolitan Atlanta area and many of the other larger cities in the state. It deals with privately constructed water or sewer systems that are not to be connected to a publicly-owned one. The bill forbids the local government or authority to require a transfer of ownership as a condition for issuance or approval of local permits. The bill has a sunset provision, January 1, 2009, so look for it to come up next year and the years after that. [See the following related bill—which applies to municipalities only.] Governor signed May 24th. Effective date: May 24, 2007.

HB 247. Local Government; water and sewer systems; change certain provisions.
Under current law, a city is authorized to charge a resident for the operation of the city’s water system, whether that particular resident uses it or not [i.e., the resident uses a well]. This bill would allow—under certain circumstances relating to the size of the city and other factors—such resident to opt out of paying for a service he or she isn’t using. Governor signed May 30th. Effective date: July 1, 2007.

HB 383. Georgia Condominium Act; define terms; provisions.

This complicated bill makes fundamental changes to condominium law, primarily as a result of the proliferation of multi-use [residence, retail, office, etc.] construction. First, under current law, where a city, county, etc., requires a certificate of occupancy, the condo contract must state that the seller is required to deliver the CO to the buyer before closing. This bill eliminates both the requirement for the contract and the delivery. The reason? By way of example: Developer plans to install Corian countertops in all residential units; Mr. & Mrs. Rich New-Condo-Owner want marble. Avoiding the pre-closing CO will eliminate the developer’s having to install the Corian before closing, just to have it ripped out for the marble installation after closing.
Second, existing law requires, with some exceptions, that all condominium owners share equally in assessments, pursuant to a predetermined formula. This bill, essentially, sets up residential and retail sub-categories to more specifically tailor payments to use.

Third, for new condos, the bill will excuse most common area assessments from the developer and from owners of unsold or unoccupied units for up to the first two years of the condo’s existence. Again, there are some exceptions. For example, if the cost of fire damage exceeds insurance coverage, these excused owners would have to contribute to that deficiency.
Finally, the bill provides that, in certain circumstances, horizontal construction of “phased-in” condos will be protected against local authorities’ zoning, etc., rules for traditional subdivisions. Governor signed May 29th. Effective date: July 1, 2007.

SB 246. Buildings; advisory committee on industrialized buildings; appointment/vacancies; change composition.

This bill deals with the regulation of prefab, formed or assembled parts of a building that, once brought to the final site for assembly, cannot be disassembled for inspection. Georgia law terms this “industrialized building”; this does not include mobile homes. SB 246 tweaks the membership of this construction industry’s 11-person governing board. Of most note to our membership, the existing “One member shall be from the industrialized building industry,” will now be “One member shall be from the residential industrialized building industry [emphasis supplied].” All 11 are appointed by the Georgia Commissioner of Community Affairs, currently Mike Beatty, from Jackson County, in the northeast part of the state. It would be good to have at least one or two of those board members as members of GaREIA. Governor signed May 18th. Effective date: July 1, 2007.

HB 30. Consolidated housing authorities; two or more municipalities; change certain provisions.
Under existing law, two or more cities are allowed to consolidate their housing authorities into one, called, not surprisingly, a “consolidated housing authority [CHA].” And, when they do, soon after that, the individual housing authorities of the included cities ceases to exist. HB 30 clarifies that, when the cities do this, the CHA can be a brand-new entity or just an existing one from one of the cities.

At first blush, this may not appear to be a matter of strong interest to GaREIA members. I include it only as a heads-up to our members interested in Marietta and Cobb County politics because its original author is Rep. Steve “Thunder” Tumlin, from Marietta [this bill started out as the unsuccessful HB 777, and was slipped into HB 30 by a Senate committee about a week before the session ended]. Tumlin was, from our perspective, on the bad side of the entire “Marietta v. landlords” debacle of the last couple of years and its continuing aftermath. I should add that, over the years, I have found Tumlin reasonable to work with and thoughtful. Governor signed May 18th. Effective date: July 1, 2007.

LEFTOVER BILLS AND A HOUSE RESOLUTION.

The following are in numerical order. The captions of items of particular importance to GaREIA are UPPERCASED. Notice is given at the end where a bill has passed one chamber, but not the other.

HOUSE BILLS

HB 121. CORPORATIONS; SUMMONS OF GARNISHMENT; CHANGE PROVISIONS. Authored by the chairman of House Judiciary Committee, this bill would slightly loosen the procedure for serving some garnishments upon a corporation.

HB 138. Construction contracts; required insurance coverage. This complicated bill would provide verifiability, accountability and consequences for obligations to timely obtain and pay for insurance required in construction contracts up and down the line.

HB 196. Consumer reporting agencies; identical report to consumer and creditor; require. This bill would require consumer credit reporting agencies to timely send to a consumer an identical copy of the consumer’s credit report that it sends to a potential creditor.

HB 292 AND SB 41. CIVIL PRACTICE; PROVIDE FOR SERVICE UPON PERSONS RESIDING IN GATED/SECURED COMMUNITIES; STATE-WIDE REGISTRATION OF PERMANENT PROCESS SERVERS. These bills, which started out virtually identical, would, for the first time in Georgia, specifically create procedures for the serving of a lawsuit in gated communities. They also would allow existing civilian process servers to be set up statewide. I was surprised that neither of these bills passed, and I strongly anticipate their being back next year.

HB 338. SHERIFF’S SERVICES; INCREASE FEES FOR SERVICE IN CIVIL CASES. This bill would have raised the sheriff’s fee for, among several other services, serving dispossessory warrants from the current $25.00 to $100.00. We played a major role in killing this bill, but, even after that, there was an 11th hour attempt to revive it on the last day of the session—which we also successfully jumped on. Watch out for this one next year.


HB 339. Tax executions; tax collectors and commissioners; collection of costs; provide. This bill would add, in effect, a collection fee to the cost of satisfying the execution.

HB 386. Superior court fees; instrument recordings; provide additional fees. This bill [which had SB 14 piggybacked on it] passed the House and Senate but was vetoed. The House part would have added nominal charges for the clerk to record deed, mortgage, etc., satisfactions, cancellations, releases and cross-indexes, to which the Governor did not object. But, the Senate part would have extended certain deadlines to recording costs and the finalization of a statewide “uniform automated information system for real and personal property records” from the already distant existing 2012 to 2014, and the Governor objected to this. “Extending a program that is not set to expire for another five years even further into the future,” his Constitutionally-mandated veto message said, “undermines the concept of a legislative sunset.” I’ll bet you we’ll see this bill back next year under another number, with the “2014” struck. Governor VETOED May 30th.

HB 422. Specialized land transactions; minimum amount for liens; provide. This bill would preclude a condo association from foreclosing on a unit for failure to pay assessments, fines and the costs of unit repair until the lien reaches $2,000.00.

HB 450. Sales and use tax; maintenance contracting; provisions. This bill would reduce sales tax liability on equipment for non-Georgian subcontractors doing maintenance or rehab work; it does not cover original construction.

HB 479. Abatement; county or municipal ordinances; unfit buildings; change certain provisions. This bill would add “graffiti” to the existing justifications for a Superior Court judge to order closing, repair or demolition of a dilapidated building, e.g., crack house, that is declared a nuisance. However, if the sole basis for concluding that the building is a nuisance is graffiti, only repair can be ordered.

HB 503. Georgia Asbestos Safety Act; contractors; revise certain provisions. A licensed asbestos-removal contractor contracts with a property owner or operator of a business or residential property to remove asbestos from the property. This bill would clarify that an employee of the owner or operator is not [also] an employee of the contractor.

HB 564. DEPOSIT ACCOUNT FRAUD; INSUFFICIENT FUNDS; STOP PAYMENT; INCLUDE ACT. GaREIA had a hand in drafting this bill, which eases the requirements for getting a bad check criminal warrant: 1. A landlord, who often gets a check in the mail or a drop box, wouldn’t have to “witness” the tenant’s signing it; 2. Under certain circumstances, a warrant could be issued for a “Stop Payment” check; and 3. The requirement that there be written or printed on the check the name, address and phone number or check cashing number of the payor would be eliminated for started checks.
HB 579. Landlord liens; definitions; provisions. Mr. Smith buys a mobile/manufactured home financed by Jones Bank and places it, as a tenant, on Mr. Doe’s property. After a year or so, Tenant Smith skips out, so Jones Bank is left to foreclose—whenever it gets around to it—and Owner Doe, after going through the nail and mail dispossessory process, is left with a trailer on his land. This bill would allow Owner Doe to collect a storage fee—which Jones Bank would have to pay until the trailer is removed.

HB 642. LOCAL GOVERNMENT; RESIDENTIAL RENTAL PROPERTY; REQUIRE REGISTRATION. This bill involves existing law that was central to the long battle between the City of Marietta and landlords. Existing law forbids a county or municipality from requiring “the registration of residential rental property.” This bill would reverse that, and allow the local government to register. GaREIA had a strong hand in defeating this bill, but I wouldn’t be surprised to see it resurface next year. We need to remain involved in this issue during the summer and autumn, as well as vigil next legislative session.

HB 713. Water, gas and other services; limited liens for unpaid charges; change certain provisions. Under existing law, utility companies are forbidden from placing a lien upon a new owner’s property for an old owner’s unpaid bills, including sewerage service. This bill specifically would add that sewerage service “includes without limitation storm-water runoff.”

HB 800. GEORGIA PROPERTY OWNERS’ ASSOCIATION ACT; LOT OWNERS’ OBLIGATIONS; PROVISIONS. Here, verbatim, is the entire bill: “If a board of directors fails to comply with any requirement of this article [Article 6 – Property Owners' Associations], the articles of incorporation of the association, or the bylaws adopted by the association, then the lot owners´ obligations for the payment of any assessment for common expenses shall be suspended until such time as the board of directors brings itself back into compliance.” ’Nuff said.

HB 825. SAVANNAH, CITY OF; EVICTED TENANTS PROPERTY; PROVIDE CERTAIN PROCEDURES. This local bill, which was introduced four days before the 2007 session finally ended and is bad for GaREIA, would affect just Savannah: Where there has been “nail and mail” eviction notice upon a Savannah tenant, this bill would require the landlord, upon eviction, to place the tenant’s property in storage for at least 45 days. Costs for storage can be deducted from the security deposit and, if the tenant doesn’t claim the property in 60 days, the landlord can sell the property to “recoup his or her costs” for storage.
But, this local bill seems to run afoul of the Georgia Constitutional provision that “[l]aws of a general nature” have to apply statewide. No “local law” is allowed where “provision has been made by an existing general law.” So, while the legal argument is not foolproof, this bill faces uphill battles both on its subject matter, which GaREIA will strongly battle, and, as I see it, its constitutionality.

HOUSE RESOLUTIONS

HR 421. Real estate transfer tax and intangible recording tax; increases; authorize – Constitutional amendment. This resolution would, upon voters’ approval in November 2008, allow the Legislature to increase real estate transfer taxes and intangible recording taxes and to direct the increased funds to a Georgia Housing Trust Fund to assist low and moderate income Georgians get affordable housing. If this resolution passes [by ⅔ vote of both houses, because it calls for an amendment of the Constitution], the matter would be put to the voters in November 2008. I wouldn’t lose any sleep over this one.

SENATE BILLS

SB 8. Property Tax Assessments; appeals; payment of interest; change certain provisions. First scenario: Property owner appeals his tax assessment. The county agency and the Superior Court agree with him, so he’s entitled to a refund of, or credit for, the overpayment plus interest. The interest is $200. But, he’ll only get back $150.00 in interest from the county because that’s the most existing law says it has to pay him. Second scenario: Same facts, except he loses, so, in addition to the tax, he owes the county $200.00 in interest. If this bill passes next year, the most he would have to pay in interest is $150.00. This bill passed the Senate.

SB 41. See HB 292, this section.

SB 58. Taxation; payment of taxes where property lies in more than one county; repeal certain provisions. Under current law, when property overlaps over more than one county, the owner can pay property to one county, and the counties can divvy it up later. This bill would repeal that law.

SB 63. Property; provide for definition of single-family residential real estate; exemption to certain liens; SB 64. Liens; wrong real estate; provide for a special designation; and SB 65. Property; single family residential real estate; contract to perform work; provide requirements. See the blurb on Senate Resolution 636 in “Selected Bills and Resolutions,” above.

SB 159. Homestead Exemptions; change date of filing applications. This bill would extend the deadline in any given calendar year for filing for homestead exemption from the existing March 1st to “the date for the closing of the books for the return of taxes for the calendar year,” in a particular county.

SB 217. Property Owners’ Association; shall have standing as a party to bring action to enforce covenants. Next-door neighbors Sam and Bill live in a subdivision that has a homeowners’ association. Bill builds a fence which, as it turns out, encroaches by a foot onto Sam’s property. But, Sam doesn’t care and doesn’t plan to sue, so that’s the end of that. Under this bill, the HOA would have the right to sue Bill in most circumstances over the encroachment.

SB 271. Taxes; change the period of time within which a tax deed shall ripen by prescription. Under existing law, where a former owner has lost property by failure to pay taxes, even if there is no notice or insufficient or improper notice with regard to a subsequent sale, if the former owner fails to attempt to redeem within four years of the sale under virtually every circumstance, that right to redeem is lost forever. This bill would have reduced the four years to one year for all tax deeds executed on or after the bill’s effective date. This bill passed the Senate.

SB 291. Ad Valorem Taxation; provide annual hearings on property taxes by county/municipal governing authorities/independent school systems. Before a local governing authority could set property taxes in a given year, this bill would require a minimum of two public meetings at varied, convenient times. And, such meetings would have to be preceded by public advertisement of clear, detailed language of the dollars, increased dollars, etc., involved.

SB 334. STATE LICENSING BOARD OF HOME INSPECTORS; CREATE. GaREIA defeated a similar bill last year. This one would attempt to go further. Among other bad leftover provisions from the 2006 bill, this bill would prohibit an inspector from repairing a home which he or she inspected in the past 12 months. Also, of course, this bill would establish still another licensing board, staff, bureaucracy, etc. This bill was filed on the next to last day of the session, so it has had no airing whatsoever. In fact, SB 334 was the last Senate bill filed [there were 892 bills filed in the House].

I want to heartily thank all of you who put so much time, effort and thought into the 2007 Session for GaREIA’s membership. I especially extend my sincerest and heartfelt thanks and appreciation to the extraordinarily dedicated handful of stalwarts on the Legislative and PAC Committees. Sometimes, you guys make this work fun.

As always, I welcome your comments, questions and suggestions.
Ronald P. Jayson