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A Blog about Real Estate, How it Can Be Damaged, and Disputes Over its Transfer

This blog is a personal blog written to discuss legal issues affecting Georgia property, and how it is damaged, transferred, and fought over. I write this partly to keep abreast of the law, and partly to offer a forum for my writing. In order to find content, I often analyze Georgia Supreme Court decisions. I try to update this blog as I can, but writing is a time consuming process.

Sunday, September 25, 2011

Ante Litem Notice Not Required for Open Records Act Suit

The Georgia Supreme Court on September 12, 2011 issued an opinion in City of Statesboro v. Dabbs, Case No. S11A0760, holding that a plaintiff does not have to give a city prior written notice of the plaintiff's intent to bring suit for a violation of the Open Records Act, O.C.G.A. Section 50-14-1, et seq. The Court also upheld an award of attorneys' fees and expenses to the plaintiff for the costs of bringing suit. The Court held that the ante litem notice provisions barring suit against the government only applied to suits for injuries to damages or property. Accordingly, a plaintiff bringing suit to enforce the Open Records Act need not file a demand prior to suit giving the city an opportunity to adjust a claim for failure to provide public records.

The Open Records Act in Georgia requires cities and counties to make all of their records open to the general public. Under the Act, a government has three (3) days withing which to respond in writing to a demand to inspect and copy public records. This law helps to ensure that the business of government is open to all members of the public. Associations and private organizations are not generally subject to the Act.

Tuesday, September 20, 2011

Associations and Storm Water Management Issues

With regard to the problems with storm water management, the issues that can arise are not limited to cases in which builders have caused downstream damages for recent construction. The recent Forsyth County case in which the homeowners were represented by Don Stack and other lawyers against Pulte Home Corporation involved only one type of case that can result from storm water. There is also a developing problem in Atlanta caused by a lack of expenditures to maintain storm water pipes and detention pond dams that were installed decades ago by developers.

Once a builder and developer finish a community, they transfer their responsibility for maintenance of the community to homeowner associations or governments. In fact, associations were originally created for the express purpose to maintain storm water systems in the wake of the Clean Water Act of 1972. See Homeowner association. They were not created solely to maintain tennis courts and swimming pools.
Some modern homeowner associations and their directors have repudiated the original purpose for property associations. Some associations focus on the amenities in a community instead of focusing on the nuts and bolts of community maintenance and management. In the wake of the 2009 flooding that exposed the developing problems in Metro Atlanta, the Atlanta Journal and Constitution ran a series of articles regarding storm water problems in the Atlanta area. Among other things, the series of articles highlighted the fact that some associations and boards of directors refuse to accept responsibility for the situations in their communities. This article can be read here.

My firm represents both property owner associations and individual members regarding a variety of issues pertaining to property management, including associations' legal responsibility for their storm water problems. We are currently representing individual homeowners, as well as boards of directors of associations.  We represent competing interests on both side affecting "mega-associations" with hundreds of lots. Our goal is to  advise clients regarding the law and represent their interests where an opposing party or insurer attempts to misrepresent the law. We have multiple land cases on trial and motions calendars currently, and we routinely speak at public meetings before city councils and county boards of commissioners when we are not litigating these issues.

There are arguments to be made for each interest that we represent. When representing homeowners and individual landowners, we emphasize the fact that responsible parties have to face up to the inescapable conclusion that public infrastructure has to be maintained. If governments will not accept that financial responsibility, then it must be borne by entities such as associations that can financially assess their members. In this same vein, individual property owners cannot address the problem. Pipes cross multiple lots, water is generated from streets and catch basins that collect water from all lots. Detention ponds service all lots.
Some associations, such as a local Forsyth County association with hundreds of lots, have tried to argue that each lot owner has to maintain the part of the system on the lot. The problem with this approach is that it literally would lead to a "collapse" of storm water systems. If just one homeowner cannot afford to replace the section of a storm water system component on his or her lot, then the whole system will clog, flooding entire communities, including lot owners who had no role in causing the problem or generating the flood waters. Ultimately though, these issues are not decided on question of fairness - they are decided by the law and the courts where one party of the other refuses to accept responsibility.

Monday, September 19, 2011

Jury Awards Homeowners $2.5 Million for Drainage Problem

Jurors in Forsyth County, Georgia recently awarded homeowners $2.5 Million against Pulte Home Corporation for a drainage and erosion problem that Pulte allegedly caused on their properties. This award for a nuisance was on top of a separate attorneys' fees award of more than $400,000 assessed against Pulte for allegedly destroying evidence stored on hardrives and in email software.

The case involved a large subdivision in central Forsyth County built by Pulte during the boom in residential construction that preceded the recession. The plaintiffs contended that Pulte's failure to comply with Best Management Practices (BMP'S) and failure to maintain Pulte's property in a way needed to protect other property owners had caused the plaintiffs' properties to lose value. Among other things, these homeowners appear to have contended that the marketability of their homes and land had been affected by the builder's actions.

The case has been heralded as involving the largest award of damages in Georgia history in a case based erosion and sedimentation due to the responsible party's failure to account for the impact of its storm water runoff. It is uncertain whether this contention is accurate in that other multi-million dollar verdicts regarding erosion and storm water have issued from other juries.

The jury awarded the plaintiffs attorneys' fees and punitive damages in addition to their compensatory damages. The gross amount of the damages award exceeded the property damage claims by a large numerical factor. The case stands for the proposition that jurors value property rights in Georgia, and that even conservative jurors in Forsyth County are not hesitant to issue large verdicts against parties that allegedly fail to take care of their storm water and sediment. Pulte has announced that it will appeal the verdict.

Sunday, September 11, 2011

Subdivision Homeowner Rights to Common Areas Not Cancelled by Foreclosure

Interchange Drive, LLC v. Nusloch, A11A0964, 2011 WL 3849510 (Ga. Ct. App. Sept. 1, 2011)

In a recent opinion in Interchange Drive, LLC v. Nusloch, Case No. A11A0964 (Slip Op., Sept. 1, 2011), the Court of Appeals upheld the rights of subdivision lot owners to access common areas. The Court held that notwithstanding the fact that the bank had foreclosed on the developer's rights in the subdivision, the owners of homes who bought their lots after the date of the security deed still had rights in the amenities. The Court reached this finding notwithstanding the fact that the bank had recorded its security deed prior to the date that the developer subjected the final plat to the declaration of covenants and prior to the recordation of the declaration of covenants in the deed records.

The bank had contended that the bank had perfected title under its security deed before the restrictions expressed in the covenants were imposed. Therefore, under black letter law regarding the superiority of rights under a security deed to subsequent covenants, the bank claimed the foreclosure of the security deed extinguished the covenants.

The Court of Appeals disagreed.

This case is significant in that there are a number of communities facing similar issues. Due to the recession, banks have foreclosed on the interests of developers in a large number of new developments. This case stands for the proposition that those homeowners who bought in such developments still enjoy rights in the swimming pools and other amenities notwithstanding a foreclosure on the developer and the lack of a release by the bank.

Sunday, September 4, 2011

Punitive Damages Accompany Awards of Attorneys Fees

Another interesting twist to the opinion in Kitchin v. Reidelberger, A11A0459, 2011 WL 2641280 (Ga. Ct. App. July 7, 2011), was that it emphasized the law that the standard for an award of punitive damages in a nuisance case is very similar to the standard for an award of attorneys' fees to the claimant.

In Kitchin, supra, the jury had initially failed to award punitive damages when awarding the property owners their attorneys' fees in the case. The trial court then sent the jury back out to reconsider whether punitive damages should be awarded. The Court of Appeals upheld this procedure.

The case is significant in its outcome in that it shows that whenever attorneys' fees are awarded in a case of damages to land, punitive damages are also an available form of relief to the injured property owner. Accordingly, both attorneys' fees and punitive damages are a proper form of damages in a flooding, storm water, or other nuisance case.