September 2, 2011
Authored by: Luke Lantta
In Georgia, if you inherit real property from a debtor by virtue of intestacy, you’re on the hook for debts relating to that property that accrue after the debtor’s death. Even if that property goes into foreclosure. Those are your debts, not the debtor’s. So says the Georgia Court of Appeals in its most recent estate litigation decision. In Villas at Stone Mountain Condominium Association, Inc. v. Blair, the Georgia Court of Appeals construed together sections of the Georgia Probate Code and Georgia Condominium Act to decide that an heir, who immediately became the owner of a condo upon the owner’s death, was liable for monthly condo assessments and late fees that were incurred between the owner’s death and a foreclosure sale.
Pauline Blair’s mother owned a condo unit at the Villas at Stone Mountain and died intestate on November 21, 2008. Blair never resided at the condo either before or after her mother’s death, never received any financial benefit from the condo (e.g., rent), and never even claimed ownership of the condo. Approximately a year and a half after the mother’s death, the condo was sold at foreclosure. The condominium association sued Blair and her sister seeking past due monthly condominium assessments and late fees.
In a case of first impression, the Court of Appeals construed together that portion of the Georgia Probate Code that provides that upon the death of an intestate decedent the title of the decedent’s interest in real property vests immediately in the decedent’s heirs at law (subject to divestment by the appointment of an administrator) with that portion of the Georgia Condominium Act that provides that all sums lawfully assessed by the association against any unit owner shall be the obligation of the unit owner from the time they become due and payable.
Thus, when the mother died, Blair and her sister immediately became owners of the condo. When they became owners of the condo, Blair and her sister became liable for all assessments and fees that became due and payable from that point forward.
Blair unsuccessfully tried to argue that she never actually acquired an interest in the condo due to foreclosure. Of course, that argument ignores the Georgia Probate Code provision that Blair immediately became an owner upon her mother’s death. Furthermore, the condo association was only seeking to collect those assessments and fees that accrued between the mother’s death and the foreclosure. Therefore, the condo association was not trying to recover a judgment against Blair for her mother’s indebtedness.
Blair obviously appeared uninterested in doing anything with the condo. Given that approach toward the condo, Blair should have immediately renounced her interest in the condo (within nine months of her mother’s death, of course) rather than let the assessments and fees accrue against her.