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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.

Monday, June 25, 2012

Georgia Law Permits Damages for Stigma to Property

In Royal Capital Development, LLC v. Maryland Casualty Company, Case No. S12Q0209 (Ga., May 29, 2012), the Georgia Supreme Court ruled that a property owner suffering damages to its land may recover damages for the decrease in value in addition to the costs of repair.  In the decision, the court directed the law of recovery away from the course suggested by the opinion in the nuisance case of City of Atlanta v. Broadnax, 285 Ga. App. 430, 646 S.E.2d 279 (2007), which indicated that a property owner would be limited to either the diminution in value, or the cost of repairing damage.  The court of appeals had held a land owner could not recover damages for stigma to property remaining after a repair.  In Broadnax, the court of appeals had reasoned that a repair would restore the value to a property damaged from a flooding nuisance and that homeowners could not recover the lost value from the stigma of living in a flood prone area due to the city's inaction.  The supreme court's opinion in Royal Capital Development, LLC disapproved of this holding and held that a property owner can recover both types of damages.

The facts underlying the opinion in Royal Capital Development, LLC involved a claim on an insurance policy brought by an Atlanta property owner who suffered damages to a building due to shaking.     This decision will have a significant impact on the valuation of nuisance cases and other property owner cases in Georgia.  Property owners, such as landowners damages by flooding or blasting from a rock quarry, will be able to recover both the costs to restore their property to its predamaged condition in addition to the decrease in value that stems from owning "damaged goods."