Articles Posted in REAL ESTATE CONTRACTS & AGREEMENTS

March 6, 2012

ATLANTA, GEORGIA CONSTRUCTION ARBITRATION ATTORNEYS, ARBITRATION CLAUSES, THE RIGHT TO REPAIR ACT, AND MORE; FIND THE BEST GA CONSTRUCTION LAWYER TO ASSIST WITH CONTRACT AND ARBITRATION DISPUTES, LITIGATION, AND GEORGIA CONSTRUCTION CLAIMS

As a residential and commercial construction arbitration lawyer in Atlanta, Georgia, I can assure you that most persons entering into a Georgia construction contract do not think of worst case scenarios should any parties to the contract fail to perform their obligations according to Georgia construction contract law and construction industry standards.

• What is Georgia Construction arbitration; Is it binding? How does it work?

• What will happens if a contracting party fails to pay?

• What happens if the purchaser of contractor or builder services cannot be satisfied no matter what is done?

• What will happen if the contractor or builder neglects his duties?

• What do I do if I receive a Georgia “Right to Repair Act” Letter?

• Do I need to, and should I, send a Georgia “Right to Repair Act” Letter?

• What will happen if residential or commercial construction does not meet or exceed industry standards?

The questions and scenarios surrounding Georgia construction claims are endless as are the actual real life occurrences, which I witness happening day in and day out. To survive in the construction business world, it is best to be prepared for all possibilities. The best way to do this is to have a contract in place which fairly, resourcefully, and adequately covers almost any issues which might arise in any Georgia construction claim scenario.

For years, Georgia construction litigation was considered the more costly, more time consuming manner of dealing with disputes, and so many contracts included arbitration clauses instead. Georgia construction arbitration has many varied forms and phases, which are its counterparts to Georgia litigation. It is usually up to the parties to an arbitration, with the assistance of the arbitrator or arbitration panel, to make the decisions about pre-arbitration matters which are somewhat customized to the construction case. The most important and controversial aspect to Georgia construction arbitration clauses are that they are binding decisions and cannot be appealed to any court absent extraordinary circumstances. Even then, they are rarely overturned by a court of competent jurisdiction, but merely modified. One might say the good news in all of this is that Georgia construction arbitration can be a relatively fast and inexpensive forum for resolving Georgia construction disputes.

However, others counter this argument stating that the cost of arbitration has skyrocketed while the time it takes for a case to make its way through Georgia state courts has diminished significantly.

Two California Supreme Court cases held that the courts cannot overturn a binding arbitration award even if the arbitrator fails to follow California substantive law. As a result, it becomes literally impossible to have an erroneous decision reviewed by the courts. While this is a California case, State Supreme Court holdings often have a strong influence on the courts in other states.

Needless to say, if you enter into a Georgia Contract with arbitration, you should consult a Georgia contract lawyer with expertise in arbitration and alternative dispute resolution. This is especially true if the contract you are entering is a Georgia construction contract for new home construction, a renovation contract, or contract for any similar building, structure creation, or like-kind services.

Formerly a typical arbitration clause in a construction contract might read as follows:

All claims or disputes between the contractor and the Owner arising out of or relating to the Contract Documents, or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise. The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

– American Institute of Architects specifications (formA201) –

Due to the current trends in Georgia construction law and the arbitration process itself, as an Atlanta, Georgia construction lawyer with The Libby Law Firm, I would suggest incorporating certain additional considerations into arbitration clauses when used to give the parties to an arbitration greater control. For example,

Arbitration forum. The standard dispute resolution forum in the construction industry is the American Arbitration Association (AAA). However, recently, a number of other dispute resolution service providers (e.g. Judicial Arbitration and Mediation Service “JAMS”) have developed and many attorneys now prefer them over the AAA. The choice of an arbitration forum should be reviewed in context of the cost, arbitration panel members, and forum arbitration rules. Particular attention should be paid to the forum’s arbitration rules since they are incorporated into the arbitration clause. Though, the arbitration clause may include provisions that delete all or portions of the forum’s rules.

Discovery. Most arbitration clauses limit the scope of pre-arbitration discovery. A well-drafted arbitration clause will restrict or expand discovery to correlate to the dollar value of the dispute.

Standard for Court Review of the Award. An arbitration clause can be drafted to require the arbitrators’ decision to comply with the substantive law. If the arbitrator violates such a provision, the parties to the arbitration may seek to overturn the award since the arbitrator exceeded the authority granted under the arbitration contract clause. To ensure that a court has enough information to properly review the arbitrators’ award the arbitration clause should also require the arbitrators to render a well- reasoned opinion. The opinion should include a statement of the factual determination made by the arbitrators and the conclusions of law rendered by the arbitrator. Finally, if you want the decision to be reviewed by the courts for compliance with substantive law, a provision should be included in the clause that clearly states that desire.

The best method for ensuring that a Georgia construction dispute is correctly and fairly resolved is through situation-specific clauses in properly-drafted construction contracts. The arbitration clause is one of many clauses included in a typical construction contract, and each clause can be affected greatly by recent changes in the law. It is thus wise for any construction contract to be drafted or at least reviewed by counsel before signing.

The Libby Law Firm Georgia construction lawyers can negotiate, review, and draft your construction contract in light of all of the most recent changes in accordance to Georgia construction law and arbitration proceedings, which is most favorable to you. If you are considering entering into a construction contract or amending a previous contract in light of recent changes in the law, contact our Atlanta construction contract law firm and come in for a consultation. Seeking the assistance of a seasoned Atlanta, Georgia construction contract and arbitration lawyer adept is the least you can do to protect yourself from worst case scenarios.

As a well-known Georgia construction arbitration lawyer with a perfect Avvo rating of 10, I am here to tell you that if anything can go wrong in a construction contract or in construction, it will. The very nature, imperfection, and importance construction combined with the building a home or commercial structure readily lends itself to disputes and conflict. This is likely true because for many, a home is the biggest purchase you will ever make in your life. In addition, construction is not what it seems to be on paper. It is, by its nature, imperfect and the result and methods of construction are readily subjective.

In short, protect yourself because this construction is “big deal” to parties to the contract and maintains a high rate of conflict.

If you have legal dispute or binding arbitration with a contractor, builder, sub-contractor or architect whose work does not meet or exceed Georgia industry standards, you should contact The Libby Law Firm without delay.
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June 26, 2011

REAL ESTATE – PROPERTY ATTORNEYS IN ATLANTA, GEORGIA, LET YOU KNOW WHICH CONTRACTS MUST BE IN WRITING – DO NOT REGRET FAILING TO RETAIN AN EXPERIENCED REAL ESTATE – PROPERTY LAWYER

by Kasey Libby and Duncan Adams

As an Atlanta property lawyer that regularly handles proceedings dealing with Georgia business, real estate, construction, property, and contract matters, it is imperative that I know when a Georgia contract must be in writing to be legally enforceable. Being an attorney who does not cut corners and can be stubborn about achieving perfection, my quick answer is that every contract must be in writing. However, this is not true. Many contracts are not in writing. This is especially true for Georgia contract disputes and litigation, which in one way or another; end up on my desk to correct. In short, failure to memorialize your contractual agreement causes a plethora of problems, so please put everything in writing.

This is even true if you write your contractual agreement on a napkin from the restaurant, while having lunch with the contracting parties, with the waiter’s pen. The written contract should be a detailed written agreement that is signed, witnessed, and understood by all parties of the contract. Do not sign a contract you do not understand. This is because your signature on a contract affirms that you read, understood the contract fully, and agreed to it. The contract must contain and cover all material terms of the subject matter contract.

Now, the truth be known, the above-referenced scenario, while not a bad idea, is really me making a vain attempt to prevent future problems that could arise stem from uncertainties that often arise from oral contracts, and which are oftentimes prevented by written contract – even if it is on a restaurant napkin. Now it is time for the truth. I must admit I am purposefully wrong to prove a point. Georgia law holds that only certain Georgia contracts must be in writing. I still want to get one last word in that a contract on a restaurant napkin is abundantly better than an oral agreement.

In my Atlanta based property and Georgia real estate transaction and property dispute and litigation law firm, I know that contracts must legally only be in writing when they are subject to the Statute of Frauds. O.C.G.A. § 13-5-31 states that the following contracts do not have to be in writing to be legally enforceable. In short, they are not subject to the Statute of Frauds, which requires them to be in writing.

Conversely, it follows that contracts must be in writing when they are subject to the Statute of Frauds. In my Atlanta property dispute and litigation law firm, I know the exceptions to the Statute of Frauds. To be clear, contracts that must be in writing must meet the requirement that they be in writing because the Statute of Frauds dictates so.

Under O.C.G.A. § 13-5-31, the following types of cases are do not have to be in writing and thus one could say, they are not subject to the Statute of Frauds to be enforceable.

They are as follows:

• There has been performance concerning the contract terms by a party to the contract, and another party to the contract has accepted this performance. This indicates there is a contract, thus Georgia law states there is.

• Where there has been such part performance of the contract as would render it a fraud of the party refusing to comply if the court did not compel a performance.

• The contract has been fully performed. Since the contract has begun and finished, there is no reason to back up in time and require this contractual agreement be in writing.

As such, any oral contract is valid and legal enforceable so long as it complies with one of the above exceptions to the Statute of Frauds.

The binding authority that set forth and solidified the Statute of Frauds can be found in the case of Atlantis Realty Co., Inc. v. Morris, 142 Ga. App. 470, 236 S.E.2d 163, (Ga. Ct. App. 1977).

The lesson of this Blog Article? While it is possibly not evident, is that parties should always take the time to make a contract. Even more so, that certain contracts need not be in writing to be legally enforceable. However, if you are party to a contract, please take the time to put it in writing. If you feel a contract is pending, please take the necessary steps to have this contract put in writing. Truth be known, putting the contract in writing is only half the battle. If you are engaging in business with another party, please retain an experienced Atlanta, Georgia contract attorney to draft your contracts and make them binding on all parties. Additionally, by having your attorney draft the contracts, you can make sure your best interest are protected and promoted. I stated earlier that much litigation is generated from disputes over oral contracts. Well, there is a whole other sector that deals with Georgia contract disputes over poorly, ambiguously, or improperly drafted Georgia contracts. While a contract is just an agreement, in this business environment, a “handshake will not do anymore.” It is sad, but true.

August 25, 2010

GEORGIA COMMERCIAL REAL ESTATE TRANSACTIONS – DUE DILIGENCE IS ESSENTIAL

by Kasey Libby and Duncan Adams

“Due Diligence,” is an expansive term used in commercial real estate. This term is commonly used to refer to the process of examination, inspection, and investigation of real property to determine the suitability of the property for a certain transaction before a purchaser consummates the purchase of the property. The term “Due Diligence” is also used in business transactions to refer to the process of examination, inspection, and investigation of a business entity before an acquisition, merger, buy-out, loan, or other transaction takes place.

In almost all Georgia Commercial lease agreements and other commercial real estate transactions, due diligence should be unconditionally carried out before any agreement is entered into. Commercial transactions are usually complex and frequently cause problems when the parties involved fail to seek legal counsel to help them understand and guide them through the Georgia real estate transaction process. One reason for the complexity is that some real estate terms are not commonly understood by people outside of the industry and can carry significant legal consequences. Some of these terms include “subordination,” “triple net lease,” “tenant improvement allowance,” “estoppel certificates”, “demised area”, “CAM charges”, “base rent”, “escalation,” and/or “rise” An Atlanta, Georgia Real Estate Lease Attorney understands and uses these terms and can ensure that their client’s needs are met. In addition to terminology, there are many other factors that complicate real estate transactions but that need to be negotiated, like parking space allotment, signage restrictions, exclusivity provisions, and/or insurance requirements.

Because of the complex nature of commercial real estate leases and contracts, without thorough investigation and due diligence, a lessee or buyer can be bound by a contract that does not fully serve their needs or inhibits their business venture. Sometimes the terms of these agreements span several years, many decades, or are final. Thus, proper review, negotiation and preparation of contracts and agreements is critical. Additionally, most lease agreements or property purchases add value to a Georgia business entity as either an asset or a liability, so careful consideration is required during the due diligence period.

In my Atlanta, Georgia Real Estate Law Firm, I have seen many clients come to me regarding Georgia real estate transactions only after issues have already surfaced. It is much more efficient and cost effective to seek legal counsel before signing any real estate agreement. The trouble and money saved by putting in the proper due diligence up front is worth the nominal expense. As a lessee, it is important to keep in mind that commercial landlords will always present lease contracts that promote their own best interests. As a result, it is imperative to have your own Georgia attorney review all commercial real estate contracts and make the appropriate modifications in favor of your interests. The same is true for the seller’s of commercial real estate, and the same extreme caution must be taken to protect the buyer’s interests.
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March 2, 2010

PERSONAL GUARANTEE PROMISSORY NOTES – AVOID HE SAID” “SHE SAID” DEBTS

by Kasey Libby and Duncan Adams

Imagine the scenario: you and your partner establish a new business entity in Atlanta and after some minor adjustments to the layout of the new office space, you are finally ready to move in and begin day-to-day operations. You quickly realize that your current office equipment is inadequate and outdated. Furniture and computer equipment is required. Because this is a new business venture, there is little cash available and it is decided that each one of you will buy some of the equipment for the office. You both pay for the equipment with personal funds. You buy the furniture at a cost of $12,500 and your partner buys computer equipment for $18,200. As time passes, you and your partner enthusiastically focus on generating business and the exact amount that each of you spent on the equipment is a fading memory.

Initially these expenditures do not seem to pose a problem. Yet without proper documentation, this seemingly innocent scenario can turn into a conflict that, even when business is good, may put a strain on your relationship with your partner. More serious legal consequences may arise if your business is sold or liquidated. Without adequate legal intervention, it may become a matter of “he said, she said” debt that is difficult to resolve.

The good news is that this situation can easily be avoided by property setting up Personal Guarantee Promissory Notes. These promissory notes should reflect the specifics of the business deal in order to ensure fair treatment for all involved, so using a boilerplate agreement is usually insufficient. Seeking the help of an experienced Atlanta, Georgia Business Attorney who will take into consideration the relevant facts specific to your business is critical to having your interests fully addressed and enforced.

Never go it alone. Protect your self and your business by implementing the proper legal instrument through a qualified business attorney. Your attorney will draft a Personal Guarantee Promissory Note that is specific to the unique circumstances and needs of your business and will ensure that your wishes, needs and desires are fully addressed and enforced.
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