Suing for Latent Defects in a Home Purchase in Georgia

Purchasing a home may be one of the most rewarding, yet terrifying transactions that a consumer can make in their lifetime.  It is universally understood for many of us that it is the single largest purchase we will ever make.  A commitment this large can make even the most self-assured buyer uneasy. 

Obvious defects in a home are not as worrisome in this case, as cracked walls and non-working electricity are straightforward to diagnose.  Issues that are less obvious are the ones that keep the would be purchaser up late at night.  These issues are referred to as “latent defects”.  Latent defects are those problems with property that are not visible to the naked eye.  These issues can be wide ranging, like asbestos in older homes, corroded piping that leads to a plumbing leak, or carbon monoxide leaking into the home.

In Georgia, like many states, the seller is required to provide disclosures of all known defects, obvious or not.  The purpose is to inform the cautious buyer of any issues that they may incur, and to avoid purchasing a home with such defects that they will have to fix.  Of course, while this is the law, this is not always followed to the extent a purchaser would like.

What happens when you have bought a home, only to find that latent defects exist and the seller failed to inform you?  While it is an uphill battle, you certainly do have options.  While you cannot seek remedy from everyone involved, there are a select few parties you can seek recourse from:

The Seller – As mentioned above, the seller in Georgia is required to provide disclosures on the home.  This disclosure requires the seller to provide a list of defects on the home that they are aware of, but may not be obvious.  While a seller may later deny that they knew about this, patchwork on drywall found after purchase where a leak has formed is an obvious sign that the seller knew there was an issue.

The Sellers agent – similar to the seller, the agent must disclose when asked of any defects on the home, and while their duties are limited, depending on the circumstances they may be on the hook as well.

The home inspector – While Georgia does not require inspections on the purchase of a home, a prudent purchaser will always have one conducted.  The inspector is a trained individual, who is well versed in home construction and accordingly has a higher aptitude for uncovering these issues.  Depending on the issue, a home inspector may be liable for missing it in their inspection of the home.

So now, you have a latent defect, and there is a responsibility for the parties that have not been met, but do you have a case?  There are certain conditions that need to be met before you can proceed. 

Was the defect there before you bought the home?  General wear and tear on the home is not actionable if the loss merely occurs under your ownership, however if the condition was pre-existing then you should be ok to proceed.  Is it a non-obvious defect that was not disclosed, but a prior party was aware of?  In the example above, plumbing may not always be an obvious issue, but if you later find steps have been taken to repair and conceal, and you relied on the non-disclosure of those parties, this condition will have been met.  Finally, the harmed purchaser must prove damages.  Is there an actual cost of repair, or a decrease in the home’s value as a result of the defect?  This will be what your claim in a lawsuit amounts to.

There are a number of legal theories that you can bring against the responsible parties depending on the situation.  It is recommended to review your case with a qualified attorney beforehand to ensure you are bringing an action on the correct theory.  Some of these claims include failure to disclose, negligence, fraud, breach of contract, breach of warranty, and negligent misrepresentation.

If you have recently purchased a home and discover a latent defect, but are unsure of your options, give us a call!  Thrift & McLemore’s attorneys pride themselves on their expertise in the real estate law arena and will fight to get you the recourse that you deserve.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150.

Statutory Close Corporations in Georgia – What are they good for anyway?

In creating a legal entity in Georgia, one would be understandably confused at the many possible variations in structure that are available to him or her. For validation, look no further than the numerous forms that a Corporation can take on. Many avoid a corporation because they feel that the formalities involved are too cumbersome, that this type of organization is reserved for the fortune 500 companies that trade daily on Wall Street. While part of this assumption is true, the other part is that many small businesses do not need avail themselves of the corporate form due to the perceived formalities that come with it.

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Enter the Statutory Close Corporation. Created pursuant to O.C.G.A. § 14-2-902, the Statutory Close Corporation is a corporation with fewer than 50 shareholders that includes a statement in its articles of incorporation that it elects to be a statutory close corporation. This corporate form introduces an element of “simplicity” that would benefit a smaller organization as compared to its fortune 500 counterparts.

By adopting the close corporate form, sole proprietors and partners who wish for the benefits and protections of a corporation can do so without all of the formality that comes with it. For example, a close corporation, at its election, can do away with the creation and maintenance of a Board of Directors. Many small organizations with ownership split among a select few will have no need for a formalized board, because they as owners are acting de facto in that capacity already. Additionally, with no uninterested shareholders to appease through quarterly meetings, there is no need to conduct an annual shareholders meeting and record meeting minutes, which come at a cost.

The close corporation also tends to streamline efficiencies and decision rights for the small operator. One of these efficiencies comes in the form of a simple “right of first refusal” requirement between shareholders. While a traditional corporate form is susceptible to proxy voting and corporate takeovers, when discord occurs within a close corporation, shareholders have the option to simply buy one another out. This can all vary when involving disparate ownership and limiting agreements, but holistically, this promotes business continuity within the corporation.

A Statutory Close Corporation is not the only option either, as there are competing corporate forms that provide similar benefits, such as the Limited Liability Company. It may seem that a corporation is an overly formal entity that has no place in small business, but it is possible to take advantage of the corporate form without the complexity and cost that comes along with it.

If you are looking into corporate formation in Georgia and find yourself intimidated by the many options available, reach out to us today! Thrift & McLemore’s attorneys can help you make an informed decision about the best corporate form for your new Georgia business. Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150.

Thrift & McLemore Receives 2019 Martindale-Hubbell Platinum Client Champion Award

Thrift & McLemore is to pleased to announce that we have received the 2019 Martindale-Hubbell Platinum Client Champion Award. The 2019 Martindale-Hubbell Platinum Client Champion Award recognizes those attorneys and law firms who excel at service as affirmed by their clients.  Thank You!

Learn more by visiting https://www.martindale.com/organization/thrift-mclemore-llc-158754093/.

Home Owners: Obtaining Recourse in Georgia from a Failed Home Inspection

Whether you are purchasing your first home or your fiftieth, one of the most important steps in the purchase process is hiring a home inspector.  This inspector will be the one to tell you whether the dream house you recently went under contract on is structurally sound, or contains issues that no longer qualify it as a dream home at all.

Most of us rely on these inspectors to catch every minor detail; after all, that is why you hired them in the first place!  However, what do we do when we have done our research, hired the best inspector we can find, yet defects in the home are still missed?  After all, there is nothing worse than an inspection stating the home you just purchased is in great shape, only to move in and find out that your foundation needs emergency repair, at a great cost.

In the state of Georgia, before immediately taking your grievance to the home inspector, you may have a better claim against the seller.  Although Georgia follows the mantra of “Buyer Beware”, there is a general duty in the state to disclose to would be buyers known defects within the house, especially if they are not easily discoverable.  Sellers could face liability to the buyer for failing to disclose these material defects, so long as it is provable that the defects were known.

Assuming that the seller was not aware of the defect, or there is no proof of fraudulent concealment on their part, then you can look to the home inspector for relief.  There are two general theories to obtain relief from a home inspector from a botched inspection.  Outlined below, these theories are Negligence and Breach of Contract.

Negligence, in any area of the law is generally the failure to act as a reasonable person as someone similarly situated would do.  In this case, if a different home inspector catches the issue at hand (which can be proven by getting a second opinion), then the original home inspector can be found negligent.  The state of Georgia requires all home inspectors to go through in depth training in order to be licensed, so lack of training is no defense.  One thing to consider is that the inspector is only liable to defects within the scope of the inspection.  If the house does not have running water on the day of inspection, the inspector cannot be liable for defects regarding the plumbing in the home.

Breach of Contract becomes a viable claim when the contract that you entered into with a home inspector contains language that you believe was clearly violated.  This could arise when you specifically negotiated to include tests for lead based paint, the inspection came back clean, and you later find evidence pointing to lead based paint in your home.  If you have a contract in writing with the inspector to perform any review, and you can prove that the review was never in fact completed, this would be the proper avenue for legal recourse.

Assuming that you have a valid claim based on the two legal theories above, there are still items to consider.  The home inspector may have inserted a waiver into the contract called an exculpatory clause.  This clause is common among home inspectors, and generally serves to limit liability in the event that defects in the home are uncovered after inspection.  Instead of being on the hook to replace a whole roof, they may simply attempt to refund the home inspection fee.  They may also have an arbitration or mediation provision, which would make it more difficult to file a lawsuit as a first step.

In summary, a failed home inspection in Georgia does not always leave the buyer out in the cold.  There are several avenues to recover losses in the instance that your home inspection did not uncover material defects in your home.  If you are not sure whether you have an actionable case, you should consult with an attorney before taking any action.

If you have questions regarding a home inspection gone wrong, give us a call!  Thrift & McLemore’s attorneys have represented Georgia home buyers seek legal recourse for defects in their homes not caught by the home inspection.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you today!

Atlanta Braves File Suit Against Local Taxi Company for Trademark Infringement

Credit – Ricky Leroux – Marietta Daily Journal

Credit – Ben Brasch – The Atlanta Journal-Constitution

A local Marietta based taxi company, Braves Taxi, who carries a logo closely resembling that of the Atlanta Braves baseball team has found itself on the opposite side of a lawsuit for federal trademark infringement.  The suit filed November 1, 2018 states that the services is using, “identical and confusingly similar iterations of the Atlanta Braves’ trademarks” on its vehicles.”

The complaint goes on to state that “(Braves Taxi is) intentionally freeriding on the success and popularity of the Atlanta Braves by brazenly copying the Atlanta Braves’ trademarks in an effort to dupe unwitting fans or other Atlantans into believing the taxi company is owned by, associated or affiliated with or sponsored or endorsed by the Atlanta Braves.”

It is worth noting that the taxi company’s logo includes typeface identical to that of the (ball club) Brave’s logo as well as a tomahawk.  The attorney for the company, Braves Taxi, has so far denied many of the allegations according to court filings.

The original complaint states that the taxi company started operating “virtually in the shadow of SunTrust Park.”  Records show, however, that the taxi company has been registered with the state since 2015, and in business long before that in the area surrounding the current Braves stadium.  Many argue that they were in the area long before the Braves made their way to Cobb County.

The Braves further argue in their filing that the company is “inflicting irreparable harm to the goodwill symbolized by the Braves’ marks.”  They also mention potential harm to their extensive sponsorship agreement with Uber to provide all ride sharing to and from the stadium.  Federal court cases can take years to resolve; it is expected that this will be completed sometime in late 2019.

Do you operate a business and have concerns as to whether or not you are unwittingly engaged in trademark infringement or some other legal offense?  Thrift & McLemore’s attorneys can help you to ensure that you are at all times on the right side of the law.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150.

Purchasing a Franchise in Georgia as a Career Change

We recently stated on our blog that 1 in 7 businesses in the U.S. operate as a franchise.  It makes sense, as anyone with a healthy amount of working capital can purchase an interest in a turnkey operation and simultaneously become their own boss.  Also recently, Forbes published an article titled, “Laid off, Why Now Could be the Best Time to Franchise.”  It offered a fresh take on what is surely a devastating time in anyone’s life, and suggested an opportunity to spurn working for someone else, and go into the business of yourself.

 

While I would caution anyone who recently lost their job against haphazardly disregarding the years spent advancing in their given field, and honing the specific skill sets acquired, the article does present the reader with some compelling points for evaluation.  What was the level of satisfaction with the prior career?  What is the reader’s age and/or opportunities for continued advancement?  Will employment be easy to obtain, or was the layoff a product of a larger industry shift?

While the article focused on the finer points in franchise ownership, before committing to a newfound career in franchise operations, it is important to evaluate all factors to ensure that this will be a good fit.  The would-be franchisor must first assess things critically, such as their financial position, business acumen and skillset, business and personal goals, and the type of franchise that would do well in the local marketplace.

The first, and arguably most defining factor involved is the franchisee’s access to capital.  All franchises carry an initial franchise fee.  This is how the franchisor makes money, and is typically in addition to royalties on continued financial success.  Without access to this capital, which can typically run up to $1,000,000 for the most established franchise models, the would be franchisee will not be able to make it past the application phase

The second factor involves the skillset and goals of the individual purchasing the franchise.  Perhaps you are an accountant, and possess the business knowledge to keep the entity profitable, but you hate the smell of fast food.  Similarly, if you are allergic to animals then a pet sitting franchise may not be in your best interest.  Luckily, there are resources designed to match potential owners with available franchises that provide the best fit.

The final factor, and arguably the most important of them all, is the preparation and execution of purchasing a franchise.  The purchase of a franchise is a detail intensive process with many agreements and legally binding documents.  It requires a complete understanding of the Franchise Disclosure Document (FDD) and the Franchise Agreement with the entity you will be franchising with.  While Franchises are regulated under Federal law, there are differences from state to state, with Georgia being no different.

If you are considering a career change into franchise operations, and would like help understanding the critical elements of the process, please reach out to us.  Thrift & McLemore’s attorneys will assist you in every phase of the agreement, and provide critical reviews along the way.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you today!

Thrift & McLemore Receives the 2019 AVVO Client’s Choice Award

Atlanta, GA – On February 22, 2019, and for the third consecutive year, Thrift & McLemore received the 2019 AVVO Client’s Choice Award for superior client service, fast response times and desired results.  We greatly value this honor and thank each of our clients.

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Bank Fraud, Phishing and Checksystems Case

Phishing is a cybercrime in which a target or targets are contacted by email, telephone or text message by someone posing as a legitimate institution to lure individuals into providing sensitive data such as personally identifiable information, banking and credit card details, and passwords. The information is then used to access important accounts and can result in identity theft and financial loss. Everyone makes mistakes. Customers make mistakes. Banks make mistakes. Statistics show that phishing generally occurs when someone least expects it. We have found that it is becoming more and more commonplace for online institutions to request sensitive information from customers in order to proceed with transactions.

Several of the institutions researched by this firm do this on a regular basis and legally work, on this basis, with large banks and financial institutions. So, as of 2018, a precedent has been set. While most “old school” customers would never give out sensitive information such as online banking user id’s and passwords, many younger customers are readily doing so for a number of reasons that include, but are not limited to, obtaining credit cards and loans. Simply put, the new “tech savvy” generation is more familiar with doing transactions online than simply approaching an established bank or lending institution.

In a recent case, a customer was approached by an online institution with an apparently known name and legitimate email address. Information was provided. The customer’s bank called days later and informed him or her that they were shutting down their account and reporting them to ChexSystems for fraud because several counterfeit checks had been deposited into their account by “mobile banking.” Chex Systems, Inc. (ChexSystems) is a nationwide specialty consumer reporting agency under the federal Fair Credit Reporting Act (FCRA). ChexSystems’ clients regularly contribute information on closed checking and savings accounts. ChexSystems provides services to financial institutions and other types of companies that have a permissible purpose under the FCRA. ChexSystems’ services primarily assist its clients in assessing the risk of opening new accounts. https://www.chexsystems.com. In this case, no investigation was made as to who actually committed the fraud and now the customer cannot open up any account at that institution ever again and also is blocked from opening up a new account with another bank. The customer had never even used mobile banking before.

Thrift & McLemore’s attorneys are well versed in bank fraud litigation and phishing scams.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can assist you.

Franchise Basics in Georgia

Most individuals dream of one day being their own boss, but find themselves intimidated by the prospect of quitting their day job.  Contrary to popular belief, one does not need a revolutionary idea like Jeff Bezos with Amazon or Elon Musk with Tesla to retire that old nine to five.  Franchising offers a type of entrepreneurial opportunity that tens of thousands of American’s utilize to quit their day jobs and own their own business.  Introduction to Franchise Basics in Georgia.

One in seven businesses operating in the U.S. today incorporate some form of franchise.  It is a business model that allows those without revolutionary ideas operate under the support of a corporate banner while simultaneously calling the shots and being in business for themselves.

The most common type of franchise is business format franchising, where in return for operating in conformity to rules laid out in a Franchise Agreement by a corporate franchiser, the franchisee or small business owner, is provided a full range of services and support by the corporation to offer them the best shot at maintaining a successful business.

The business model is simple.  The corporation (franchiser), lends the expertise of their successful and established business practice to a would be entrepreneur (franchisee) for a fee or royalty on the profits.  Both have a stake in the success of the business venture, so both work together to turn a profit.  This works too, as statistics show that licensees of franchises are more successful on average than those starting a business in the same industry by themselves.

Because franchising has become big business, there are regulations in place to govern the relationship.  Georgia residents should know that the state is not a franchise regulation state, meaning there is no fee or paperwork to file with the Georgia Secretary of State.  The Federal Franchise Rule and the Georgia Franchise Act, however, still govern rules in the state.

The Federal Franchise Rule is a regulation governing the relationship between a franchisor and a franchisee.  Written in very friendly terms to the franchisee, it takes into account that this individual is a far less sophisticated than the large corporation they are doing business with.  The rule writes in protections for deceptive practices and aims to facilitate informed decisions through mandatory disclosures.

One such document driving these disclosures is the Federal Disclosure Document (FDD).  This document requires franchisors to disclose to the franchisee at least 14 days before the sale, information needed to make an educated decision on the purchase.  This document includes a wealth of information, but most importantly outlines the start-up costs needed to support the business, as well as empirical data showing realistically what the franchisee can expect to earn from the venture.  These documents can run up to 200 pages, so it is important to be thorough and know fully the agreement that entered into.

Another document required by the Federal Franchise Rule is the actual Franchise Agreement itself.  This is the contract between the two would be partners that details the actual operational agreement.  It will include provisions that both parties understand the elements of the FDD, material terms of who owns what assets and the extent of the licensing agreement, as well as the length of the agreement.  As with any other contract, this governs the operation of the business, so it is best to leave the negotiations to attorneys with experience in evaluating Franchise Agreements so that they can negotiate substantive changes to protect your interests.

As stated above, while there is no requirement for franchises to register or file FDD documents in the state, there still exists the Georgia Franchise Act.  This act, while less expansive than the federal rule, defines what businesses qualify as a franchise in the state, as well as several terms important to franchise relationships such as franchise fee, franchisor, sub franchisor, etc.  The act also controls how actions such as transfer, termination, and renewal occur within the state.

Franchising in the state of Georgia offers a promising business opportunity, but can also become extremely complex.  If you are working towards the purchase of a franchise, or simply have questions about the process, give us a call!  Thrift & McLemore’s attorneys are well versed in drafting franchising agreements as well as post agreement support as you get your Georgia franchise off the ground.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you today!

Georgia Small Business Debt Collection Suggestions

Georgia Small Business Debt Collection:  It is no secret that the key to running a successful business is a healthy bottom line.  Businesses need profits to continue operating, paying their bills, and their employees.  For small businesses especially, every little bit counts, and it is important to keep an eye on everything coming in and going out.  This is why it can be especially devastating to small business owners when customers do not pay their invoices on time.  These delinquencies can create solvency issues for the business that may ultimately threaten its own ability to pay bills on time.

Some degree of invoice delinquency is simply unavoidable.  Be it a dispute regarding the service performed, solvency issues on behalf of the customer, or just people looking for a free ride – certain customers just do not pay their bills.  There are certainly means to address these customers, but there are also steps you can take as a small business in Georgia to minimize delinquent invoice accounts.

Keep your cool.  It is a natural reaction to become hostile with a customer who will not pay their bill after you have performed a valid service.  While you have every right to be frustrated, taking it out on the customer will be of no service in getting that bill paid.  Once hostility is introduced to the matter at hand, cooperation likely goes out the window.

Stay Organized.  This is critical in dealing with overdue invoices from a customer.  Businesses need to have great documentation of outstanding receivables, including each invoice delivered and the respective due date.  It should also monitor each time the customer received correspondence from the business, and the means by which this was done (mail, email, or phone).  Debt collection law in Georgia can be complicated, and keeping records like this will ultimately help down the road should the dispute turn into a lawsuit.

Remain Diligent.  While you may feel that you are at the mercy of the client, remember that this is a valid debt.  While remaining respectful, you should use every tool at your disposal to be paid for the work you have performed.  Regularly contact the customer.  It may be an honest mistake at first, and simply reminding the customer of the bill does the trick.  This can be done via a quick phone call or resending of the invoice.  If this does not work, you can institute a deadline for payment.

Know your options.  If you have followed all of the steps above and still gotten nowhere, it may be time to hire some help.  Many debts in Georgia can be considered delinquent after 90 days, at which point it is possible to take legal action.  Introducing a collections attorney can help to navigate the legalities of debt collection while turning up the pressure on the delinquent client.  If all else fails, this attorney can file a lawsuit for the debt.  An experienced attorney will be able to walk you through all of the necessary requirements for taking action of last resort.

If you have questions regarding a delinquent debt for your Georgia business and need some answers, let us help!  Thrift & McLemore’s attorneys are qualified in the State of Georgia to collect debts on behalf of their clients.  Contact Thrift & McLemore by email at [email protected] or by phone at 678-784-4150 to discuss how we can help you and your organization collect on your receivables and delinquent debts.

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