Real Estate Q & A - Vance Remele

What is the difference between a condominium and a townhome?
"Condominium" is a form of property ownership created when property is submitted to the
Georgia Condominium Act. A condominium consists of Units that are individually owned, and
common elements (typically including the land upon which Units are built, building foundation, roof and exterior, interior corridors, community center, recreation facilities, parking areas, etc.), which all of the unit owners own in common. Any type of construction can be submitted to the condominium form of ownership, including commercial property, parking buildings, or marina boat slips and townhomes.

"Townhome" refers to a type of construction in which a dwelling shares one or more walls with adjoining dwellings. A townhome development can be organized as a condominium or simply subjected to a set of covenants (often called a Declaration of Covenants, Conditions and Restrictions) designed to help protect property values. The later type of development is sometimes referred to as fee simple townhomes because the owners in such projects typically own the land underneath their townhomes in fee simple. In most townhome developments which are not organized as a condominium, there is still a townhome association composed of all of the townhome owners. The association often owns common property such as roads, walkways and recreational facilities benefiting the community as a whole.

How are property taxes assessed in a condominium or a townhome?
The key to understanding this issue is understanding who owns the property being taxed.

Condominiums: Contrary to what many consumers think, the condominium association does
not own the common elements such as the building exteriors or recreational facilities. Since
each unit of a condominium owns an undivided interest in the common elements, each owner's tax assessment includes taxes on his or her interest in the common elements as well as taxes on his or her individual unit. In other words, taxes on those common elements are not paid by the condominium association, but by the individual unit owners. Since the fair market value of each unit includes the value of the common elements, ad valorem property taxes should be assessed based upon the fair market value of each of the units.

Townhomes: If the townhome development is not a condominium and there is common
property (i.e., recreational facilities, clubhouse, park areas), that is owned by the homeowners' association. The Association will normally receive a tax bill on the common property. The common property is usually taxed at a nominal value because the recorded covenants limit its use and essentially strip the property of value for other purposes.

Does a real estate sales contract automatically terminate if the buyer does not show up for the closing?
No, unless the contract specifically provides otherwise. When a party fails to perform under a contract, the contract is terminable due to the breach by that party but is not automatically terminated. For the contract to be terminated, a formal notice of termination must be sent to the breaching party.

Can one spouse sign a contract for another spouse?
No. In Georgia, a person cannot sign a contract for another person unless they are legally
authorized to do so. Being married does not give one spouse the legal authority to sign for the other. If a person wants to grant the person’s spouse the right to sign a contract on hi or her behalf, he or she would need to sign a power of attorney granting that right.

Is there any consumer protection law where a buyer has a few days after singing a
contract to terminate it?
With one exception, the answer to this question is no. However, the initial sale of a
condominium unit in Georgia is subject to a 7 day right of rescission on the part of the buyer commencing from the date that a binding contract is created and an acknowledgement is signed that they buyer has received the condominium disclosure package. (See O.C.G.A. § 44-3-111.)

Is a contract enforceable if the parties agree that the earnest money will be zero ($0) dollars?
Yes. While there must be consideration for a contract to be enforceable the consideration can be the mutual promises of the parties to perform their respective obligations under the contract.

Can a party withdraw an offer to purchase or sell property even though the party agreed that it would remain open for a specified period of time?
The general answer to this question is yes. A person making an offer or counteroffer can
normally withdraw it at any time prior to it being accepted and returned to the party who made the offer. An exception to this rule, however, would be an option contract, where a party pays money or some other valuable consideration for the right to buy a property on set terms during a specified period.

What is the difference between the “Acceptance Date” and the “Binding Agreement
Date” in the GAR form contracts?
The Acceptance Date is the date that the party who has been presented with an offer or
counteroffer signs and accepts it. However, a legally enforceable contract is not created until the accepted contract is then delivered back to the party who made the offer or counteroffer. The date this party (or the party’s broker if the broker is representing the party as a client) gets back the accepted contract is the Binding Agreement Date.

Can an offer be accepted after the time limit of the offer has expired?
When a party accepts an offer after it has expired, and returns it to the party making the offer, it is technically a counteroffer rather than an acceptance. However, there is case law in Georgia which provides that if the counteroffer is then not signed, it can still be held to be an enforceable contract if both parties proceed in reliance on the contract as if it is in full force and effect.

Can members of the military get out of their leases if they are transferred to another party of the country?
The answer is yes under both federal and state law. Under state law, if a member of the military enters into a residential lease for occupancy by that person or that person’s immediate family and subsequently receives permanent change of station orders or temporary duty orders for a period of more than 60 days, his or her liability is limited. In such cases, liability of the tenant may not exceed 30 days after written notice and proof of re-assignment are given to the landlord, plus the cost of repairing any damage caused by the act or omission of the tenant. (See O.C.G.A. § 44-7-22) Under federal law, a person who enters into a residential lease and thereafter enters military service may terminate the lease at any time after his or her entry into military service. If a member of the military enters into a lease while they are already in the military, and then receives either permanent change of station orders, or a temporary assignment elsewhere for a period of not less than 90 days, he or she may terminate the lease. Such termination will also terminate any liability on behalf of any co-tenant under the same lease. (See 50 App. USCA 534.)

Is there a limit on the term of a brokerage relationship?
No. In theory, parties are free to enter into a brokerage relationship for as long a term as they want. Therefore, a seller could sign a seven year listing agreement. The Brokerage
Relationship in Real Estate Transactions Act (“BRRETA”) places limits on the length of a
brokerage agreement only if the agreement is silent on its duration. Specifically, BRRETA
provides that if no expiration is provided, the agreement terminates “one year after initiation of the engagement.” The meaning of this phrase has yet to be interpreted by the courts in
Georgia. A question exists regarding whether agreements with automatic renewal provisions
provide for expiration. Some have argued that brokerage agreements must have a fixed date of expiration. They have made this argument based on two separate sections BRRETA. The first section says that the agreement ends on “any date of expiration agreed upon by the parties.” The second then provides that if no expiration is provided … one year after initiation of the engagement.” A different reading is that the brokerage agreement, of course, ends on any date of expiration agreed to by the parties, and that if there is no expiration at all, the agreement ends one year after it was entered into. This provides that it ends on a specific date, it therefore automatically ends after one year. This is a more expansive reading of the law and focuses on the fact that the specific section of the law limiting agreements to one year only applies if no expiration is provided at all rather than if no fixed expiration date is provided. To be safe, REALTORS® wishing to avoid arguments on this point should always, include an outside date of expiration even when there is an automatic renewal provision. So, for example, a listing would provide that it is for an initial term of one (1) year and shall automatically renew for successive one (1) year terms unless either party notifies the other not less than thirty days prior to the end of a renewal term. However, the agreement should, for example, then provide that notwithstanding the above, the agreement shall end five (5) years (or whatever specific period is agreeable) after the date it was entered into. In this way, the agreement has an absolute fixed date of expiration.

Do I have to present an oral offer?
Yes. Under the Brokerage Relationships in Real Estate Transactions Act, a broker engaged by the buyer or seller must timely present all offers, whether written or oral, to or from the buyer or seller. (See O.C.G.A. § 10-6A-5 and O.C.G.A. § 10-GA-7.)

The article is intended to provide helpful information . It is not, however, intended as specific legal advice to Persons seeking such advice should consult an attorney. The answers to the questions set forth herein can change with the passage of time, the adoption of new laws, and the issuance of new court decisions.