Upcoming Changes to Filing Requirements for Security Deeds in Georgia | Knowledge

A new Georgia law changes the information required on collateral deeds and will help Superior Court clerks eliminate backlogs in large counties across the state while making the filing process more efficient. From July 2023, lawyers who draft security deeds will be required to list essential information on the first page of the document.

Collateral deeds are usually drafted by the lender’s attorney and reviewed by the borrower’s attorney and the title company. The title company is the custodian and generally files the security deed as it is the priority insurer of the lien. All parties have an interest in timely registration of a security deed and should be aware of the new requirements.

The new law also requires all Superior Court clerks to offer e-filing for recording security deeds, as well as a public computer terminal for the courthouse to access Georgia Superior’s e-filing portal. Court Clerk’s Cooperative Authority.

The new law, House Bill (HB) 974, fixes inefficiencies in how data is dispersed across security acts and, in some cases, not listed anywhere. Collateral deeds for commercial transactions are usually 60-80 pages long, and essential information such as loan amount and due date can be found anywhere in the documents. This means that the clerk’s office must research the information before entering it into the required fields in their registration systems and often leads to deed rejections or delays if the information cannot be found. With the new format, all of the information the clerk’s office needs to enter into county records is in one convenient place.

Data points required on first page

Under HB 974, up to nine data points must be listed on the first page of a security deed or deed amendment. These data points are:

1. The date of the document
2. The names of the signatories of the document
3. The recipient’s mailing address
4. Map and plot identification information, if available
5. The original loan amount or the amount of any outstanding principal and additional advance under a loan modification
6. The original maturity date(s) of the debt
7. The amount of the immaterial registration tax to be paid
8. The amount, if any, of the immaterial registration fee imposed for an additional advance under a security deed amendment agreement or other additional advance secured by a security deed
9. If no immaterial tax is imposed, a summons to the authority providing for exemption from the tax

Takeaways and considerations

The most significant change is the requirement to list the amount of incorporeal tax. Currently, court clerks only require the loan amount and due date to be stated, leaving the court clerk to calculate the fee. The most common tax exemption is a loan term of less than three years. If the exemption and due date are not clearly stated and easily accessible in the documents, it may result in the rejection of the filing or at least a delay while the clerk’s office contacts the parties to the document. Most warranty deed rejections stem from a lack of clarity in tax information.

Failure to comply with the new format will not affect foreclosure rights or any other legal rights under a loan agreement, but failure to provide the required information on the first page of a security deed will result in an automatic rejection of the deposit. The Georgia General Assembly has specifically provided that failure to provide accurate tax package information will not void a transaction and nothing in the law affects the enforceability of any deed, mortgage, judgment or lien.

Although these filing requirements are not mandatory until July 1, 2023, it is recommended that parties to security acts begin complying with them immediately in order to set up a smooth process next year. Following the new format now will also help clerks’ offices become more efficient, which benefits all parties.

Sample cover sheet

The law does not impose a specific format for the documents, other than listing all the required information on the first page. Holland & Knight have included a model form which can be used for the first page of security deeds.