​Each person on a deed must execute the Seller Brokerage Agreement
If two or more persons own the property, each name must be listed as a seller on the Seller’s Brokerage Engagement and each owner must sign it. Likewise, each individual buyer whose name will be listed on the title must be listed as a buyer on the purchase agreement, and each should sign it.
 
In Georgia, which is not a community property state, even if a married person owns property individually, the spouse may still need to sign a seller brokerage engagement.  That is because the non-owning spouse may have equitable rights to property held solely in the name of the other spouse. For example, if the wife is the only titleholder of record, the husband may nonetheless have an equitable interest in the property. As a precaution, most closing attorneys will require that the husband sign a quitclaim deed transferring whatever equitable interest the husband may have in the property before the property can be transferred.

In a transaction in which the buyer is getting a mortgage, the closing attorney is representing the lender. If there is a dispute between the parties, the closing attorney, acting as Holder, has the same rights and duties of any other holder and holder may disburse the earnest money after 10-day letters and upon a reasonable interpretation of the Agreement.
 
It gets a bit more complicated when the transaction is all cash.  In that event, there is no lender to represent, so the closing attorney is representing either the buyer or the seller.  If the transaction is written on GAR forms, the Purchase and Sale Agreement states that the closing attorney in an all-cash transaction represents the buyer. 
 
Fiduciary Duty.
Unlike Realtors®, who do not own fiduciary duties to clients, attorneys in Georgia do owe fiduciary duties to their clients.  Therefore, attorneys must protect the best interest of their client and cannot act against their best interests. If there is a dispute, the closing attorney therefore has a potential conflict of interest. Per the GAR F510, Closing Attorney Acting as Holder of Earnest Money, the closing attorney’s only remedy is to interplead the funds into a court of competent jurisdiction. (GAR F510 p.8). 
 
Things happen. 
The cash buyer could default and the parties can’t come to an agreement regarding the earnest money. The closing attorney is blocked from disbursing funds to the seller because of fiduciary duty.  So, the attorney must interplead the funds. Then the parties wait, pay the costs of filing and litigation, possibly lose the interpleader and then pay the other parties costs of litigation.  A waste of both client funds and everybody’s time.
 
Here’s the takeaway.
If you want to avoid an interpleader in an all-cash transaction, consider NOT naming the closing attorney as the holder of earnest money. Your clients will thank you.

​Duty To Disclose
A seller of residential property owes a duty to disclose to prospective buyers hidden or latent defects in a property of which the seller knows of or should have known and that the buyer could not discover upon a reasonably diligent inspection of the property. The GAR Seller Property Disclosure (SPD) forms are the created for this purpose. Disclosing latent defects (and arguable latent defects) on these forms protects the Seller against claims of fraud and breach of contract. Even if a property is sold “as is,” known latent defects must be disclosed by the seller.  In the GAR form Property Sold with Right to Request Repairs, the buyer ‘s right to request repairs is limited to defects that were not disclosed in an SPD (so long as items are working). Further, a lawsuit for fraudulent concealment will not be successful if the Seller disclosed the defect on the SPD.  The more the Seller discloses on the SPD, the less chance there is of an accusation of fraud. It is recommended that the long form be used whenever possible.  

​We’ve had several Power of Attorney (POA) issues arise recently, so this week’s Broker Corner is a review of facts and issues to watch for in selling or buying real estate with a POA.
 
A POA to purchase or sell real estate must be in writing.
Since a contract for the sale of land must be in writing, the power of attorney giving someone the authority to sign a real estate contract on someone else’s behalf also must be in writing.
 
A POA must be witnessed and notarized if it to be used for the sale or purchase of real estate, but it is not required to be recorded.
Because a deed must be witnessed and notarized, the power of attorney must also be witnessed and notarized. A party may (but is not required to) record a power of attorney. If a party chooses to record the POA, the power of attorney may be recorded as a supporting document for the property deed.