Articles Posted in Real Estate

In any LLC, there are limits to what the managing member can do. There are also, however, limits to what an associate member can do to stop a managing member from acting in a way it opposes. Experienced Georgia business litigation counsel can help you determine what your options are when it comes to an LLC dispute.

A recent example was a case that pitted two LLCs against each other, each of whom was in the business of buying, selling, and managing commercial properties, including shopping centers, apartments, office buildings, and others. The two LLCs jointly formed a third LLC, with this one’s purpose being the purchase and ownership of an apartment complex in Columbus, Ga. The LLC that served as the managing member had a 25% ownership, while the other LLC, serving as the associate member, had a 75% stake.

After making the purchase, the managing member identified what it believed was a problem. GDOT had recently installed a median running down the center of the parkway that the complex faced. This meant that residents, as they sought to enter the parkway via the complex’s only exit, could only turn in one direction. This inconvenience allegedly had triggered a downturn in the complex’s occupancy rate.

In most cases, a party initiates a civil lawsuit because it has been harmed and it seeks an award of money damages to compensate it for the harm it suffered. Sometimes, though, the type of harm that is caused by a breach of a contract cannot be corrected through an award of money damages, regardless of the amount. When that is the case, such as in disputes over parcels of real estate, the injured party may seek other remedies, like a court order demanding that the other party complete the performance promised in the contract. This is called specific performance, and it can be difficult to obtain unless your case meets a exact set of criteria. If you have been harmed by another party’s breach of a real estate contract, make sure you have skilled Atlanta real estate attorneys on your side to protect your interests.

One example of a specific performance case was a litigation action recently decided by the Court of Appeals. In the summer of 2016, a man named Rahmat entered into a contractual agreement to purchase a shopping mall plaza from a family limited partnership. The buyer paid earnest money and also paid for an environmental assessment. Furthermore, the buyer allegedly put up more than $450,000 of the property’s $525,000 sale price. After the two sides held a meeting to talk about “expenses related to the ownership and management of the property,” the seller abruptly canceled the contract.

The buyer sued for specific performance. Specific performance, if awarded by a court, means that a reluctant contractual party is ordered by the court to perform as it had promised within the underlying agreement. Specific performance is a rare outcome and requires the judge to determine that an award of money damages could not provide proper compensation to the party allegedly victimized by the breach of the contract. A plaintiff is more likely to obtain an order of specific performance in a real estate sale dispute than in many other types of litigation actions. That is because of the inherently unique nature of a parcel of real estate.

The zoning of a parcel can be a critical concern for a buyer when entering into a purchase and sale agreement. In a recent Georgia appellate decision, a buyer appealed from summary judgment in favor of the defendants regarding fraud in the sale of real property. The buyer argued that the question of fraud was one for the jury since the defendants had knowingly misrepresented the zoning and concealed the city’s intent to demolish the property and the buyer shouldn’t be charged with constructive knowledge of demolition orders that were brought outside the chain of title.

The appellate court affirmed the part of the lower court’s order granting the defendants summary judgment for their misrepresentations about zoning, but reversed the lower court’s order granting summary judgment to the defendants with regard to misrepresentations about the city’s planned demolition of the property.

In 2012, the bank (trustee for two loan trust entities) foreclosed on two real property parcels that were sold to the buyer. The city had zoned the property as Urban Rural – Historical Infill. The zoning prevented multi-family housing, and the parcels had been granted a legal non-conforming use status. The city planner believed that a property’s legal non-conforming use could be verified through completion of an Application for Zoning Verification that could be attained by the city.

Continue reading →

There are many benefits to owning investment property in Georgia. But, like any investment, there are also risks. Tenants can be unpredictable at best and destructive at worst. So what can property investors do when they are stuck with a troublesome tenant?

In Georgia, a landlord may evict a tenant if: (1) the tenant fails to pay rent as agreed; (2) the tenant remains in possession of the property beyond the term of the lease; or (3) there is a tenancy at will or at sufferance. See O.C.G.A. § 44-7-50. A landlord may also evict a tenant if the lease agreement identifies a condition that, if breached, allows the landlord to terminate the lease.

However, in order to evict a tenant, landlords and property managers alike must follow Georgia’s strict statutory eviction process. This process requires the landlord to make a formal demand for the tenant to surrender possession of and vacate the property, and to file a dispossessory action. Dispossessory actions are typically filed in the magistrate court of the county in which the rental property is located.