Category: News

Issue Number 2, March 2014

March into Peak Real Estate Season

At this time of year particularly in both the residential and commercial arenas, there is a lot of real estate activity. Title headaches, boundary line disputes, quiet title and deed issues occur in greater numbers.

Whether your real estate transactions are commercial or residential, Hecht Walker is ready to help you resolve any title issues or disputes that may interfere with or hold up your real estate closings.

How to Reduce Your Attorneys’ Hours in 2014, Part 2

An Interview with Greg Hecht, Esq. and Mark Walker, Esq.
Part two of a two part article.
Advice from attorneys Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, for the new year for businesses, local governments and other entities.

For Builders,  Developers and Purchasers

Builders, developers and purchasers of real property should work with cities and counties before buying property to determine if there are any local issues that will make permitting a problem, and to see if the design standards for the area are appropriate for the intended land use. Also, they should ensure that purchase contracts are contingent upon zoning appropriate for the property being purchased. Never count on a re-zoning to occur after the purchase. Once they  purchase the property, developers are stuck with the zoning in place at the time. In addition, if a change in the use of the property is planned, developers may lose any vested rights previously grandfathered for the property.

Also, it is important to check whether a potential purchase is within an overlay district. Overlay district designs and other requirements may destroy a proposed development and building budget as well as its proposed use. A developer can include a provision in the purchase agreement requiring the seller to materially represent that the zoning, design standards and district requirements are appropriate for the intended use, which should be spelled out in the contract. They should also be sure to have the latest set of covenants before entering into the Purchase and Sale Agreement.

Finally, builders should ensure that their workforce is I-9 compliant before entering a new jurisdiction. This includes determining whether the state has implemented a new work force development or workforce status check law. A project may not be feasible if the work force does not meet a local jurisdiction’s new work force development or status check law. (Read the Full Article)

Commercial Insurance and the Insurer’s Duty to Defend
By Joseph Cloud, Associate
Businesses have many different types of insurance policies available to them that cover all types of eventualities and losses. With the exception of automobile insurance, all commercial insurance policies are treated in largely in the same manner under Georgia law. Because an insurance policy is a contract, the language of the insurance policy controls what is covered under the policy. The common element to all commercial insurance policies is that they cover a business in case of particular types of loss or damage as defined by the policy.  Regardless of the type of insurance policy a business is making a claim under, whether Commercial General Liability (CGL), Professional Liability Insurance, or other policies covering specific circumstances or type of injury, you must first look to the language of the policy to determine what duty the insurer has to the insured.

In addition to covering certain types of claims, injuries, and damages, many commercial insurance policies include a separate “duty to defend” covered or potentially covered claims made against the insured. The extent of the insurer’s duty is determined by the contract.Loftin v. United States Fire Ins. Co., 106 Ga. App. 287 (1962). This is not an independent duty of insurance carriers under Georgia law, but many insurance policies include provisions requiring the insurer to provide either a defense of any lawsuit or other claim made against the insured if covered under the policy, or reimbursement for the costs of a defense of a lawsuit or other claim covered by the policy. Unfortunately, many insurance companies will rely on any rationale or possible exclusion in the policy to deny an insurance claim or to avoid providing for the cost of a defense of a lawsuit. (Read the Full Article)

Part two of a two part article.

Advice from attorneys Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, for the new year for businesses, local governments and other entities.

For Builders,  Developers and Purchasers

Builders, developers and purchasers of real property should work with cities and counties before buying property to determine if there are any local issues that will make permitting a problem, and to see if the design standards for the area are appropriate for the intended land use. Also, they should ensure that purchase contracts are contingent upon zoning appropriate for the property being purchased. Never count on a re-zoning to occur after the purchase. Once they  purchase the property, developers are stuck with the zoning in place at the time. In addition, if a change in the use of the property is planned, developers may lose any vested rights previously grandfathered for the property.

Also, it is important to check whether a potential purchase is within an overlay district. Overlay district designs and other requirements may destroy a proposed development and building budget as well as its proposed use. A developer can include a provision in the purchase agreement requiring the seller to materially represent that the zoning, design standards and district requirements are appropriate for the intended use, which should be spelled out in the contract. They should also be sure to have the latest set of covenants before entering into the Purchase and Sale Agreement.

Finally, builders should ensure that their workforce is I-9 compliant before entering a new jurisdiction. This includes determining whether the state has implemented a new work force development or workforce status check law. A project may not be feasible if the work force does not meet a local jurisdictions new work force development or status check law.

For Commercial Real Property Owners and Real Property Taxpayers

Property owners should watch out for higher valuations in property tax assessments this year, as cities and counties will most likely be tightening down on capitalization rates this year.

Says Greg Hecht, “In our property tax appeal practice, we believe property tax appeals are still effective tools to control certain operating costs for your projects for up to three years in relation to property taxes. As the economy rebounds, our fear is that many property managers and real property owners may ignore appeals in the upcoming year. An increase in the fair market value in an assessment may or may not be justified. The valuation should be reviewed in relationship to the income produced by the property and against comparative sales over the last few years.

For Clients with Insurance Coverage Issues

Says Greg Hecht, ” In our insurance coverage practice, we find bad faith denials of covered claims on a significant basis.” Individuals and businesses with coverage disputes need to be their own best advocates first, by reviewing their policy documents. Insured companies and individuals should not simply accept an insurers initial denial of a claim based on coverage limitations or claimed provision restrictions, but should check their insurance policy for coverage provisions and declarations, and have them readily available for transmission back to their insurer.

For All Clients and Potential Clients

Finally, in 2014, after doing everything to protect themselves within the confines of everyday business practices, clients should resolve to have an attorney review documents and changes in practice at the outset. Having an attorney in the process at the early stages of a contract, negotiation or issue, can often prevent larger problems or losses. This step can go a long way towards protecting individuals and businesses from liabilities and higher attorneys fees down the road.

With over 75 years of concurrent legal expertise, Hecht Walker’s team of attorneys can help you plan for the future and protect you from liabilities. And if you are facing a legal dispute, we can aggressively pursue your claims and your defense from any claims.

How to Reduce Your Attorneys’ Hours in 2014, Part 1

The wide range of areas in which attorney Greg Hecht focuses include business, commercial and real estate litigation, county, city and authority representation, loan and guaranty litigation, commercial property tax appeals, commercial landlord/tenant, contract, zoning, land use and employment law. In his more than two decades of service, Greg has been lead counsel in over 1000 hearings and over 300 trials, working tirelessly to achieve success for his clients.

Attorney Mark Walker is a partner at the law firm of Hecht Walker. In close to 30 years as an attorney, he has represented banks, creditors, lenders, landlords and businesses in commercial foreclosure actions, in lender liability matters and in bankruptcy proceedings. Mark has handled thousands of commercial foreclosure matters during his career, and has represented lenders and creditors in federal bankruptcy courts.

Issue Number 1, January 2014

Welcome to our newsletter!

The attorneys and staff of the Law Offices of Hecht Walker are pleased to announce the inaugural issue of our monthly newsletter.

How to Reduce Your Attorneys Hours in 2014, Part 1

An Interview with Greg Hecht, Principal and Mark Walker, Principal
Ever think youd be getting advice from attorneys on how you can reduce your attorneys fees? Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, offer advice for the new year for businesses, lenders, local governments, employers, landlords, tenants and other entities they routinely counsel.

We definitely want our clients to save money, time and headaches by utilizing ongoing diligent business practices to avoid unnecessary lawsuits and financial risks. Of course we also hope our clients know that when they do need our services, we are ready to help, says Greg Hecht.

Attorney Mark Walker suggests clients involve legal counsel early in the process. “Anytime you have something new going on, it never hurts to give your lawyer a call. Often, clients wait until things get out of hand to involve an attorney to try to save a little money. Better to know up front how to avoid expensive mistakes than to hire an attorney to clean up after a situation explodes.

Easing the Taxing Costs of Property Ownership

By Jon W. Jordan, Principal

Owners of real estate, whether residential or commercial are taxed for buying their property, selling their property, and even for simply owning their property. Each year around November, property owners receive a bill for ad valorem taxes on their real property. This bill is a combined tax assessment made by the State of Georgia, the County where the property is located, and in some instances the local municipality as well.

Unlike income taxes which are based upon verifiable data, ad valorem property taxes are often based upon a property valuation opinion made by a panel of taxpayers summoned to serve on the County Board of Tax Assessors. Often times, these opinions are based upon generalized assessments of the type of property being taxed and the general location of the property, without knowledge or consideration of the particular characteristics and condition of the property. After all, local governments simply do not have the resources to make individualized assessments of each and every property in the County before each tax assessment every year. As such, it is up to the taxpayer to ensure that his/her properties are valued and taxed properly. Otherwise, the taxpayer could risk overpaying the government thousands if not tens of thousands of dollars each year.

WHAT IS FAIR MARKET VALUE?

The Georgia Department of Revenue has established guidelines to assist County Tax Assessors with determining property values. Georgia statute defines a propertys fair market value as the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arms length, bona fide sale.

Creditor Representation

By Mark Walker, Principal

One of the many areas of law practiced at Hecht Walker is creditor representation. Though this area of law is by no means glamorous nor subject to much conversation at social events, it can be satisfying if done properly. Principals at Hecht Walker have decades of experience in creditor representation.

In simple terms, creditor representation is attorney representation of a client, such as a financial institution, credit company, individual, private entity or private investor, in the collection of debt owed to the creditor. This representation includes representing the lender in:

• bankruptcy
• real property foreclosures
• suing on Notes
• personal property foreclosures

This representation can include several other remedies available under Georgia law that allow the creditor to either regain its collateral which secures the loan, or alternatively, regain the funds loaned back from the borrower.

When a law firm is retained for this purpose by the creditor, the first step for the attorney is to review the creditors documentation to ensure that the creditor is a proper position to enforce the debt instrument. (Read the Full Article)

Businesses have many different types of insurance policies available to them that cover all types of eventualities and losses. With the exception of automobile insurance, all commercial insurance policies are treated in largely the same manner under Georgia law. Because an insurance policy is a contract, the language of the insurance policy controls what is covered under the policy. The common element to all commercial insurance policies is that they cover a business in case of particular types of loss or damage as defined by the policy. Regardless of the type of insurance policy a business is making a claim under, whether Commercial General Liability (CGL), Professional Liability Insurance, or other policies covering specific circumstances or type of injury, you must first look to the language of the policy to determine what duty the insurer has to the insured.

In addition to covering certain types of claims, injuries, and damages, many commercial insurance policies include a separate duty to defend covered or potentially covered claims made against the insured. The extent of the insurer’s duty is determined by the contract. Loftin v. United States Fire Ins. Co., 106 Ga. App. 287 (1962). This is not an independent duty of insurance carriers under Georgia law, but many insurance policies include provisions requiring the insurer to provide either a defense of any lawsuit or other claim made against the insured if covered under the policy, or reimbursement for the costs of a defense of a lawsuit or other claim covered by the policy. Unfortunately, many insurance companies will rely on any rationale or possible exclusion in the policy to deny an insurance claim or to avoid providing for the cost of a defense of a lawsuit.

Georgia law, however, tends to be favorable to insureds, rather than insurers, and provides that the duty to defend is actually broader than the duty to pay claims. A lawsuit filed against your business, even if it is frivolous and false, may require the insurance company to provide a defense of the lawsuit. Where the insurance policy provides a duty to defend, an insurer is required to defend a lawsuit, regardless of whether the allegations are true or false, if the allegations in the lawsuit would even arguably place the suit within the policys coverage.  City of Atlanta v. St. Paul Fire & Marien Ins. Co., 231 Ga. App. 206 (1998); Auto Owners Ins. Co. v. State Farm Fire & Cas. Co., 297 Ga. App. 751 (2009). This is true even if only a portion of the lawsuit would ultimately, if proven true, be covered by the policy.  Utica Mut. Ins. Co. v. Kelly & Cohen, 233 Ga. App. 555 (1998).

In addition to requiring insurers to provide coverage when the insurance policy contains a duty to defend and the complaint arguably places the injury within the policys coverage, Georgia law also provides that in certain circumstances, the insurer is required to provide a defense even where the allegations of the lawsuit would otherwise exclude coverage. A common example of this is when a Plaintiff in a lawsuit claims that the injury allegedly caused by the covered company is a result of intentional actions by the company or employees of the company. Most CGL policies will exclude injuries caused by intentional conduct from the policys definition of injuries covered by the policy. When a lawsuit against a covered company contains such allegations, the insurance company will usually deny a defense of the lawsuit based on such allegations.

Generally speaking, the insurer is under no obligation to investigate or verify the truth of a claim made.  However, even if the lawsuit on its face would not fall within the insurance coverage triggering the duty to defend under the policy, the insured can, through proper procedures, create a duty on behalf of the insurance company to investigate a claim.  When an insured provides notice to the insurer of facts that would place the lawsuit or claim within coverage, the insurer has a duty to investigate the lawsuit. Anderson v. Southern Guaranty Ins. Co. of Georgia, 235 Ga. App. 306 (1998); Colonial Oil Industries, Inc. v. Underwriters Subscribing to Policy Nos. TO31504670 and TO31504671, 268 Ga. 561 (1997). Once an insurer has been given notice of factual contentions by its insured, the insurer is required under Georgia law to base its decision whether or not to provide insurance coverage and a duty to defend on true facts.  Id. Many insurers, either because of internal practices or because they primarily provide insurance in states that do not require such an investigation, will not take this necessary step and simply rest on its denial of coverage. Failing to properly investigate the “true facts and base the acceptance or denial of liability for the lawsuit thereon can expose the insurer to penalties under Georgias bad faith denial of insurance coverage statutes.

Considering that even a frivolous lawsuit can cost tens of thousands or even hundreds of thousands of dollars in attorneys fees for a business, it is important that to properly create a duty to investigate and possibly a duty to defend as well as establish a bad faith claim in the situations in which an insurance company fails to make the proper investigation. Furthermore, because insurance companies are provided with an easy remedy under Georgia law to determine the extent of their liability for a particular claim by judicial determination, the Georgia courts have proven not to be particularly friendly to insurance companies that erroneously deny coverage or a defense of covered claims. Additionally, a properly preserved bad faith claim can entitle a covered company to recoup the cost of its attorneys fees in the defense of the original lawsuit and the amount of any damages that have to be paid in connection with the covered loss, plus a 50% penalty above and beyond the damages owed. Additionally, through a properly preserved bad faith action, the attorneys fees necessitated by that action are also recoverable under Georgias bad faith law.

At Hecht Walker we routinely deal with insurance coverage issues on behalf of insured businesses, including issues related to erroneous denials by insurance companies related to the duty to defend and/or investigate a claim, as well as the litigation involving bad faith claims against insurance coverage.  We represent businesses and individuals against insurance companies in actions seeking to recoup losses for improperly denied claims or for situations in which an insured does not provide a defense required under the policy. If we can be of any assistance to you please do not hesitate to contact our law firm.

For Employers, Managers, Landlords, Property Managers, Tenants, Counties, Cities and Local Government Authorities

Ever think you’d be getting advice from attorneys on how you can reduce your attorneys’ fees? Greg Hecht and Mark Walker, principals at the Atlanta law firm of Hecht Walker, offer advice for the new year for businesses, lenders, local governments, employers, landlords, tenants and other entities they routinely counsel.

“We definitely want our clients to save money, time and headaches by utilizing ongoing diligent business practices to avoid unnecessary lawsuits and financial risks. Of course we also hope our clients know that when they do need our services, we are ready to help, says Greg Hecht.

Attorney Mark Walker suggests clients involve legal counsel early in the process. “Anytime you have something new going on, it never hurts to give your lawyer a call. Often, clients wait until things get out of hand to involve an attorney to try to save a little money. Better to know up front how to avoid expensive mistakes than to hire an attorney to clean up after a situation explodes.

Going into 2014, here are some specific suggestions for the New Year from Hecht Walker:

For Employers and Management

People respond across the board to positive interaction, clear and consistent management, and timely feedback.  In regard to management practices when an employer conducts candid performance evaluations with each employee every six months and files them in the employee’s file, performance improves and mistakes are reduced. Says Hecht, “When you ensure that your team is reporting to you on a regular basis for project management, then problems can be addressed before they require the services of an attorney. ”

To motivate and help employees and team members stay on course and add strong value  to the team, the partners at Hecht Walker suggest giving positive, constructive feedback to team members on each project at regularly scheduled project status meetings.

Every business and individual will face challenges. The key is to point out the problems and solutions to the entire team without singling out a particular team member. The individual team member may be addressed in private between manager and team member. The purpose of team-wide problem identification and solutions is not to place blame on one person, but to prevent the problem from being repeated system-wide. Hecht’s advice, Keep your team motivated to pay attention to details. When one person does something well, complement him or her to the entire team but keep it in the context of a strong team success. Your company’s success starts with observant, hard-working team leaders dedicated to servant leadership principles. The example of a servant leader who promotes team success results in diminished liabilities and a bright future for your company or firm.”

Hecht has spent over 25 years in commercial, local government and employment law practice, and he has worked with businesses, financial institutions and government entities as an attorney, a business owner and as a legislator. Working with a variety of business owners, elected and appointed officials, and executives has allowed Hecht extensive insights into a variety of leadership styles. “I saw how many of our clients improved each year on their risk protection and how other companies continued to make the same mistakes, says Hecht, Good risk management practices can improve your bottom line and protect you from liability. It is very important  to address problems head on and expeditiously and to let the entire team know what mistakes are being made and how to avoid those mistakes in the future.”

For Landlords and Property Managers

Landlords and property managers will want to remember to ask for financial records of commercial tenants at least once a year, which should be provided for in the terms of the lease. Says Hecht, “We have seen many landlords and property managers forget to gain the tenant’s financials each year, despite the provision for such information being required to be provided annually in the lease. The financials can provide astute landlords and property managers with forewarnings of a potential default. This advanced warning may allow landlords and property managers to check with their brokers for potential replacement tenants before an inevitable default occurs. If the future defaulting Tenant knows that a replacement tenant is available or even likely available to take its place, the present Tenant is much more likely to work with the Landlord on an advanced resolution of its Lease Obligations without the Landlord having to pay an attorney to dispossess the Tenant and sue on the lease obligations.”

At Hecht Walker, we represent many Landlords and Property Managers, and we preach early meetings with Tenants who have bad financials. Burying your head in the sand can only lead to one result: hiring an attorney for dispossessory actions and lease and guaranty enforcement. Many of our clients who at first use us to litigate lease matters, return to us over and over, because we offer advice to save them money and protect their liabilities with time tested advice before the next dispossessory event occurs.

For those lessors who do not already have the annual financial statements provision contained in their leases, the attorneys of Hecht Walker recommend adding this provision in a renewal document or requiring a tenant to sign such an addendum at the time of acceptance of any late payment before agreeing to take the late payment. (You should also ensure that the lease contains a non-waiver of future defaults clause before accepting any late payment.) If the lease is not close to renewal and there is not a late payment involved, some tenants may be willing to give their financial information to the Landlord or Property Manager voluntarily pursuant to a non-disclosure agreement. Many tenants will expect such requests if there has ever been a prior late payment or even a non-monetary default.

For Tenants and Sub-Tenants

For all tenants and sub-tenants, it is advisable to inspect the leased premises every six months, especially the MEP systems – mechanical, electrical and plumbing. It is a good idea to follow up quickly with the landlord, property manager or sub-lessor when repairs are needed or appear to be needed shortly. Negotiations over potential repairs are much easier before a mechanical system fails than when a system goes down and the tenant’s business is affected. Many times, the tenant may request a landlord or property manager to check a system on a routine basis to avoid business disruption. A tenant may want to include such a provision in its lease.

Before putting a repair request in to their landlord, tenants should review their lease to make sure it is the landlord’s responsibility, as opposed to theirs, for repairs. If premises inspections are a routine, scheduled item each year, tenants can save themselves the headache of a business disruption issue that could require the services of a law firm such as Hecht Walker.

For Counties, Cities and Local Government Authorities

Officials and Managers for Georgia’s cities, counties and authorities should check revenue projections for accuracy on a routine and frequent basis. Most City and County Managers check with their CFO on a regular basis to determine the financial position of the local government. However, we have seen a lack of uniform financial review in some cases over the last 25 years. If revenue is not meeting the city or county budget for a quarter or for two consecutive quarters, consider making a mid-year adjustment in the budget. This strategy might forestall deficits.

Just as important to your bottom line is the economic development of your area. The economy is rebounding slowly, and competition for commercial tax dollars is heavy. Government entities should focus on being proactive to increase future revenues. This concept requires empowering your team and retention of your economic development directors. Elected officials maintain the best intentions of taking significant time with business leaders and targets to bring quality projects to their area, but the demands of real life and many other rigors of elected office make it impossible on your own to accomplish these time consuming transactions. Work with and through your economic development directors, your financial advisors, finance officers, attorneys and authority members to create one, five and ten year incentive plans and to assign tasks to build your team to attract quality commercial taxpayers. Economic development tools such as tax allocation districts, community improvement districts, zone allowances and other incentives are critical as well. If you plan for the utilization of the tools and the people on a comprehensive team, you will reap the rewards of properly contemplated commercial development.

And government entities should remember to include their constituents in this process, says Greg Hecht. “Public participation meetings can be very helpful in this area. They can go a long way towards generating support for and developing momentum behind future projects. If financial advisors outline the pros and cons of a tool, many citizen groups may even be apt to provide district wide support. Just make sure you do a lot of the hard work, research and planning early in the process.”

Adds Mark Walker, “I offer the same advice that we try to live by at Hecht Walker. Every attorney should be looking out for the client’s best interests but at Hecht Walker we are strongly committed to following our mantra: ‘Hard Work, Honest Work, Great Responsiveness, Great Results. These fundamentals are not just platitudes. These principles enable us to serve our clients best, and we know that our clients who practice and teach these principles are best enabled to succeed.”

The wide range of areas in which attorney Greg Hecht focuses include business, commercial and real estate litigation, county, city and authority representation, loan and guaranty litigation, commercial property tax appeals, commercial landlord/tenant, contract, zoning, land use and employment law. In his more than two decades of service, Greg has been lead counsel in over 1000 hearings and over 300 trials, working tirelessly to achieve success for his clients.

Attorney Mark Walker is a partner at the law firm of Hecht Walker. In close to 30 years as an attorney, he has represented banks, creditors, lenders, landlords and businesses in commercial foreclosure actions, in lender liability matters and in bankruptcy proceedings. Mark has handled thousands of commercial foreclosure matters during his career, and has represented lenders and creditors in federal bankruptcy courts.

Owners of real estate, whether residential or commercial are taxed for buying their property, selling their property, and even for simply owning their property. Each year around November, property owners receive a bill for ad valorem taxes on their real property[1]. This bill is a combined tax assessment made by the State of Georgia, the County where the property is located, and in some instances the local municipality as well.

Unlike income taxes which are based upon verifiable data, ad valorem property taxes are often based upon a property valuation opinion made by a panel of taxpayers summoned to serve on the County Board of Tax Assessors. Often times, these opinions are based upon generalized assessments of the type of property being taxed and the general location of the property, without knowledge or consideration of the particular characteristics and condition of the property.  After all, local governments simply do not have the resources to make individualized assessments of each and every property in the County before each tax assessment every year.  As such, it is up to the taxpayer to ensure that his/her properties are valued and taxed properly.  Otherwise, the taxpayer could risk overpaying the government thousands if not tens of thousands of dollars each year.

WHAT IS FAIR MARKET VALUE?

The Georgia Department of Revenue has established guidelines to assist County Tax Assessors with determining property values. Georgia statute defines a property’s fair market value as the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm’s length, bona fide sale. The best indicator of fair market value is the sale amount for a recent arm’s length, bona fide sale of the taxpayer’s property.

However, where no recent sale occurs, there are three alternate general methods by which to determine a property’s fair market value. The first method is the Sales Comparison Method in which recent sales of similar properties in similar locales are used as indicators of the fair market value of the taxpayer’s property, and adjustments are made depending on apparent differences.  For income producing properties such as shopping centers, office buildings, warehouses, and hotels, a property’s value is the potential income to be generated by the property which is estimated by projecting a future income stream that reflects typical management and current market conditions. A third and less used method is determining the cost of replacing the property as of that tax year. These three methods involve more complex factors as well but illustrate how differences of opinion can arise from the valuation of property.

WHEN TO DISPUTE A TAX ASSESSMENT

Owners of real property in Georgia are required to file a real property tax return with their local Tax Assessors office by April 1[2], declaring what they believe the fair market value to be.  The local Board of Tax Assessors then makes its own determination of value and in the Spring each year, mails each taxpayer an official tax assessment, notifying the taxpayer of the fair market value the County placed on the property, and the assessed value of the property. The assessed value is 40% of the fair market value of the property and is the value that is taxed by the County. Property owners should consider disputing a tax assessment when the County’s fair market value determination exceeds what the taxpayer believes the fair market value to be.

As a general rule, the savings resulting from a successful tax appeal can be estimated at $1,500.00 for every decrease of $100,000.00 from the County’s opinion of the property’s fair market value. For example, one of our firm’s clients received a tax bill for its commercial property valued at $8,301,000.00.  After an appeal, our firm was able to assist in having the valuation lowered to $5,900,000.00, saving our client more than $360,000.00 for that tax year alone. While we cannot guarantee this type of recovery, tax appeals can be a very effective means by which to lower the costs of owning real property.

A taxpayer has 30 days from the mailing of his/her assessment to dispute the assessment by filing a notice of appeal with the local Tax Assessors Office. Prompt action is required to avoid a waiver of appeal rights. It’s in your best interest to work with a commercial real estate attorney.

HOW TO DISPUTE A VALUATION ASSESSMENT

Every property owner has the right to dispute State and local government real property ad valorem taxes by mailing or delivering in person a simple Notice of Appeal to the local County Tax Assessor’s Office within 30 days from the County’s mailing of current year’s tax assessment notice. Taxpayers should keep evidence of their mailing or delivery of the notice to better protect their appeal rights. Using certified mail or gaining a time-stamped copy of your filing from the Assessor’s office upon personal delivery are both good methods of preserving evidence of timely filing. There are three grounds upon which a taxpayer may base its dispute (1) fair market value (2) uniformity, and (3) taxability. The grounds for appeal must be expressly stated in the Notice of Appeal or are considered waived. In an abundance of caution, taxpayers should preserve all three grounds for appeal.

A. Board of Assessors Reevaluation of Tax Assessment – Upon the filing of a Notice of Appeal, the County Board of Tax Assessors will review the taxpayer’s dispute and reevaluate the fair market value of the taxpayer’s property. If the Board of Assessors makes any change in the taxpayer’s property tax assessment, it will provide notice of such to the taxpayer by certified mail. The taxpayer then has 30 days to dispute the reassessment by filing a Notice of Appeal of the reassessment with the County Board of Tax Assessors. The taxpayer’s appeal is then sent to the Board of Equalization which will schedule a hearing date for the taxpayer and County Tax Assessor’s Office.[3]

B. Board of Equalization – If the County Board of Assessors does not resolve the taxpayer’s tax appeal to the taxpayer’s satisfaction, a hearing date will be scheduled for the County Board of Equalization to consider the County’s tax assessment and the taxpayer’s concerns, or if properly requested the taxpayer may have the alternative of forwarding the dispute to arbitration or having the matter heard by a neutral hearing officer. The Board of Equalization consists of three (3) members selected by means similar to being summoned for jury duty. The County Tax Assessors office will have the opportunity to argue why it believes the tax assessment to be correct, and the taxpayer will have his/her opportunity to argue otherwise.  The Board of Equalization will often mail the taxpayer its decision the same day. If the Board of Equalization did not resolve the appeal to the taxpayer’s satisfaction, the taxpayer may then continue the appeal by filing a Notice of Appeal to Superior Court. As with prior appeal notices, the Notice of Appeal to Superior Court is filed with the County Tax Assessor’s Office and must state all grounds upon which the appeal will be based (1) fair market value, (2) uniformity, and/or (3) taxability.  The taxpayer has 30 days from the mailing of the Board of Assessors’ decision to file its Notice of Appeal to Superior Court with the County Tax Assessor’s Office.

C. Superior Court – Upon the filing of a Notice of Appeal to Superior Court, the County Tax Assessor’s Office will certify (file) the appeal with the Superior Court and send the Superior Court all documents presented to the Board of Equalization. The taxpayer will then receive a Civil Action File number and the action will proceed much like an ordinary lawsuit. While individual taxpayers may represent themselves in Superior Court, the law requires that businesses and other entities be represented by legal counsel.

Our commercial real estate lawyers at Hecht Walker, P.C. have provided valuable and effective services for numerous companies looking to gain relief from their real property tax bills. We have been successful in resolving tax appeals for our clients at the Board of Equalization level and in litigation. In the event you are interested in gaining more information about how we might be able to assist you in seeking real estate property tax relief, please do not hesitate to contact us at 404-348-4881.

This article is not intended to replace the need to contact legal counsel in the event you would like to preserve or appeal your tax appeal rights. This article is based upon applicable laws as of the date above, and contains general information that may change depending on particular circumstances of certain matters.  Our firm advises cities, counties, authorities, and real property owners regarding land use and property taxation issues as a part of our practice. Please note that every situation is different and contains unique facts that may allow for a successful claim or defense or not. We always advise that you speak to legal counsel directly in order to learn how to preserve and protect your tax appeal rights.

Attorney Jon Jordan’s legal practice areas are commercial disputes, property tax appeals and government issues. Prior to becoming an attorney, Jon worked for Senator Arlen Specter, serving as Deputy Press Secretary, Legislative Aide for Foreign Affairs and Defense issues, and as Special Assistant to the Senator.

One of the many areas of law practiced at Hecht Walker is creditor representation.  Though this area of law is by no means glamorous nor subject to much conversation at social events, it can be satisfying if done properly. Principals at Hecht Walker have decades of experience in creditor representation.

In simple terms, creditor representation is attorney representation of a client, such as a financial institution, credit company, individual, private entity or private investor, in the collection of debt owed to the creditor.  This representation includes representing the lender in:

• bankruptcy
• commercial real property foreclosures
• enforcing Notes and Guaranties by suit and other means
• personal property foreclosures

This representation can include several other remedies available under Georgia law that allow the creditor to either regain its collateral which secures the loan, or alternatively, regain the funds loaned back from the borrower.

When a law firm is retained for this purpose by the creditor, the first step for the attorney is to review the creditor’s documentation to ensure that the creditor is in a proper position to enforce the debt instrument. Also, the review is important to determine if the creditor maintains the rights which it believes it possesses. Throughout the years, we have seen several notes, security deeds, and related collateral instruments which do not allow for the rights or enforcement of rights which the creditor believed it maintained.

The initial review may show flaws in the documents, process malfunctions at the closing, or plain oversights. For example, an assignment to the creditor may  not have been properly filed,  or a Promissory Note or Security Deed  may not have been properly executed. Similarly, a security interest may not have been properly reflected in the Security Deed, or a UCC-1 Financing Statement may not have been properly filed. We have seen a host of similar potential problems which must be addressed before enforcing a debt or foreclosing on a commercial property.

After the documentation has been reviewed and it is confirmed that the client is in fact in the position that they believe that they are supposed to be in to enforce the debt, the next question for the client is how do they want to proceed in the collection of the debt. Often a creditor will have a security interest in real property through a Security Deed which secures a Promissory Note in favor of the creditor.  Assuming the Security Deed has the appropriate language in it  to allow for a non-judicial foreclosure, then, a real property foreclosure would be an obvious remedy available to the creditor. However, is this the best remedy available to the creditor?

In making a determination as to whether or not to foreclose, the creditor must consider the value of the property, the financial stability of the borrower, whether the Promissory Note has matured, and how  delinquent the borrower is.  Often a borrower would be in a better position to sell the property, as opposed to the creditor after foreclosing on the property, because the borrower is more familiar with the property. Also, the foreclosure sale of the property to the creditor could substantially affect the marketability and value of the property.Thus, if the borrower is not too far in default, it may be advisable to allow the borrower some time to attempt to market and sell the property prior to initiating the foreclosure. This step may also allow the creditor to avoid the need for dealing with the borrower and the property in bankruptcy .

If it is determined through financial statements of the borrower that the borrower has the means to pay the debt and just is refusing to do so, filing suit on the Note may be a better alternative to foreclosing upon the property. However, if there is substantial equity in the property over and above the debt owed to the lender, foreclosing on the property may be the best remedy.

From the experience of Hecht Walker creditor representation lawyers, it appears that most lenders want to find some type of resolution short of filing suit, or alternatively foreclosing, so long as the borrowers are in communication with the creditor and are making a good faith effort to work with the creditor to resolve the situation. If the borrower is not communicating, then the creditor will have no other alternative but to proceed as referenced above.

Creditors should note that when this market does turn around and there are in fact borrowers willing to borrow money, the way in which creditors have treated them in the past will certainly alter their thinking as to where they want to borrow money in the future. As creditors/lenders are in the business of lending money, this effect is an important point to bear in mind during the foreclosure, work-out or suit on note stage.

In over two decades of creditor representation, Hecht Walker credit representation attorneys have successfully handled thousands of creditor representation matters. If your business needs assistance with creditor representation in debt collection including but not limited to note and guaranty enforcement, foreclosures or assertion of claims in bankruptcy, then we would enjoy the opportunity to assist you at 404-348-4881.

Attorney Mark Walker is a partner at the law firm of Hecht Walker. In close to 30 years as an attorney, he has represented banks, creditors, lenders, landlords, businesses and individuals in foreclosure actions, in lender liability matters and in bankruptcy proceedings. Mark has handled thousands of foreclosure matters during his career, and has represented lenders and creditors in federal bankruptcy courts.

Georgia and a handful of other states recently passed laws requiring business owners to use E-Verify to validate their employees’ eligibility status. July 1 marked the final implementation of this law, which now affects all businesses employing more than 10 full-time workers. The E-Verify system is a free online system that crosschecks an employee’s I-9 information across databases belonging to the Social Security Administration and the Department of Homeland Security. With the E-Verify requirement, the onus is now on business owners to ensure that their employees have the legal documentation to work in the US.

HB 87 is part of a general trend in immigration, that started in Arizona with the passage of SB 1070 in 2010. The Georgia law looks beyond individuals to focus on the businesses employing them. If employers are found to have illegally hired workers without documentation, they may face large fines and even criminal or civil charges.

Business owners consider the law punitive and bad for Georgia’s economy. They argue that not only are the checks required burdensome to businesses, but they will likely prevent new business investment in the state. Businesses expected to be impacted by the law go beyond the agriculture, restaurant and construction industries to include fields like IT.

One bright spot in the HB 87 debate: several months ago a federal court struck down Section 7 of the law, which criminalized transporting or housing illegal workers. However, it remains to be seen how the remainder of HB 87 impacts Georgia’s economy and workforce. In the meantime, businesses are advised to speak with an employment law attorney if they have questions about the legality of new hires.

The economic downturn of 2008, along with the financial crisis in mortgage-backed securities, has resulted in insolvency and FDIC takeover of many local banks. These assets are ultimately sold by the FDIC to other banks to be serviced. Assuming that the FDIC loss share program will cover some losses sustained for toxic assets and bad debt, some banks have begun to very quickly and abruptly file lawsuits on many of them. In response to the sheer volume of debts, some banks adopted the practice of filing “Robo-Complaints and supporting “Robo-Affidavits.

But this tactic – an effort to gain quick judgments against debtors – may prove more of a burden than a benefit. Often banks and their counsel make mistakes or take shortcuts in obtaining the proper documentation or witnesses necessary to establish their claims. The result – unnecessary years of litigation. We will show you what mistakes are being made by certain lenders and their attorneys and what actions should be taken to better ensure a prompt judgment in their favor.

Make Sure You Have The Right Documents

Our firm has been involved in many commercial bank disputes, representing both Lenders and Borrowers in matters from foreclosures to loan and guaranty suits. While representing Borrowers, we have found instances of banks suing on promissory notes from the FDIC without providing documentation that the notes were assigned to them from the original failing bank. Only the holder of a promissory note may sue on that note. Because the original note was entered into by the original failing bank and the creditor, the new bank must show that that original promissory note  – and the rights to sue under that note - was assigned to it.

Proving promissory note assignment can be surprisingly complex, involving multiple transactions, each with their own documentation requirements. In some cases where banks have failed to prove assignments, they have been unable to enforce promissory notes. Even when a borrower has admitted on record to signing a note and failing to pay pursuant to it,  the court has been unable to give a judgment to the bank if it fails to prove it actually owns the note.

These simple administrative and clerical issues have prevented banks from collecting millions in outstanding debt purchased from the FDIC. If banks and their attorneys paid a more particular eye to these details, they would be better able to gain summary judgment on these promissory notes. However, because of the volume-based practice, the banks may walk away empty-handed – unless you include the bills from the creditor representation lawyers.

Make Sure You Have The Right People

Another problem that banks find in obtaining judgments is the absence of proper witnesses in signed affidavits of support, either for a  motion for summary judgment or at trial. Usually a bank will submit a Motion for Summary Judgment, in which it argues that with no material facts in dispute, the bank is entitled to a judgment in its favor based on the law of the state of Georgia. To do this, a bank submits an affidavit that is supposed to be based on the personal knowledge of the witness. However, some banks are failing to find witnesses that have any personal knowledge of the assignment transaction, the promissory notes being sued on, the actual calculations of the amount due, or any of the defenses or denials raised by the defendants. Additionally, many of these affidavits are, in fact, drafted by the attorneys and not reviewed by the affiant (the person who is signing the affidavit), making such affidavits inadmissible.

If the defense counsel scrutinizes closely enough the affidavit and documents provided by a bank in support of its motion for summary judgment, the defense counsel may find grounds to have the affidavit struck from the record, thus making the plaintiff not entitled to a judgment as a matter of law. The lender may be forced to go to trial on a case where the defendants have already admitted to signing the promissory notes and not paying.

The banks should spend more time ensuring that they have the proper documents and proper witnesses before proceeding with a lawsuit. Satisfying these requirements will make it much easier for the bank to obtain the summary judgment against the borrowers with lower attorneys fees and costs.

What Else Do You Need To Know?

With years of experience in commercial loan lawsuits, our firm has been successful in representing both lenders and borrowers. Ensuring that proper documentation and witnesses are in place before proceeding is one of the keys to a successful commercial loan case.

Interested in learning more about how to properly gain a summary judgment on commercial loans? Contact the creditor representation attorneys at our office at 404-348-4881.