Georgia Ltd. Partners LLC v. City Nat'l Bank

The evidence supported the trial court's finding that the price the bank paid for an apartment complex at a foreclosure sale was equal to or greater than the fair market value of the property on the auction date.

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

City National Bank auctioned Georgia Limited Partners, LLC’s property at foreclosure and then initiated confirmation proceedings. After a hearing, the Superior Court of Cobb County determined that the auction price was equal to or greater than the fair market value of the property and granted the bank’s application for confirmation. Georgia Limited Partners, LLC, and Paul Steinfurth collectively “the debtor”1 appeal, contending that the bank failed to carry its burden of proving the fair market value of the property and, therefore, that the trial court erred in granting the bank’s application. For the reasons explained below, we affirm.

Georgia law provides that, when a party holding a security interest in real property pursues non-judicial foreclosure, the secured party may not obtain a judgment for any deficiency unless the secured party timely reports the sale and obtains confirmation of the sale from the superior court in which the land is located. OCGA § 44-14-161 a. “The court shall require evidence to show the true market value of the property sold under the powers contained in a security deed or other lien contract and shall not confirm the sale unless it is satisfied that the property so sold brought its true market value on such foreclosure sale.” OCGA § 44-14-161 b. Our appellate courts have read OCGA § 44-14-161 b “to require proof of true market value under the usual market conditions for sales of such property.” Citations, punctuation, and emphasis omitted. Gutherie v. Ford Equip. Leasing Co., 206 Ga. App. 258, 261 1 424 SE2d 889 1992. Because foreclosure sales are forced sales and are conducted under conditions that differ from the ordinary market for the property in question, they “notoriously fail to bring the true market price of the property.” Citations and punctuation omitted. Id. Thus, in order to achieve the legislative purpose of providing debtor relief by limiting and abating deficiency judgments, Georgia’s confirmation statute requires evidence of fair market value other than the public sale price. Id.

Georgia Ltd. Partners LLC v. City Nat'l Bank

The evidence supported the trial court's finding that the price the bank paid for an apartment complex at a foreclosure sale was equal to or greater than the fair market value of the property on the auction date.

Share with Email

Thank you for sharing!

Trending Stories

More From ALM

Subscribe to Daily Report