This article aims to provide some context as to the inclusion of the Acknowledgement of Borrower’s Rights in our Georgia loan doc sets, as well as our understanding of Georgia law’s closing attorney requirements - Closing Attorney’s Affidavit.
Acknowledgement of Borrower’s Rights
This document is included in all of our loan doc sets when the collateral property is in GA. As we are aware, the intent of this document is to apprise the borrower of the lender’s right to sell the property utilizing nonjudicial foreclosure as set forth in Section V, or thereabout, of our Deed to Secure Debt; in Section V, the borrower also acknowledges that the power of sale granted in the Deed to Secure Debt may be exercised by the lender without prior judicial hearing. As such, the Acknowledgment of Borrower’s Rights document is basically just a further acknowledgement of the lender’s rights and the borrower’s waiver of rights (e.g., to a judicial hearing upon the beginning of nonjudicial foreclosing proceedings to the extent allowed under GA law) set forth in Section V.
As to whether this acknowledgment is or can be applicable to commercial real estate loan transactions, it appears that it is customarily included in closing loan doc sets for residential, consumer real estate loan transactions. Much of the commentary on this acknowledgment’s intent and use has been opined on by consumer-focused regulatory bodies, notably the CFPB. In fact this acknowledgment has undergone iterative change in name and content over the last few years, largely in part to a CFPB supervisory highlight issued in Summer 2021.
It is our understanding at GoDocs that notwithstanding the common use of this acknowledgment in residential, consumer real estate loan transactions, at least as of 2023 it is used in connection with commercial real estate loan transactions, as well.
This is why we include that document in our loan doc sets. That said, if your Georgia closing attorney feels differently, then as the closing attorney, he/she can feel free to remove it based on his/her expertise of GA law; if so done, then the references to the acknowledgement in the Closing Attorney’s Affidavit can be deleted.
Closing Attorney’s Affidavit
Per In Re UPL Advisory Opinion 2003-2.,277 Ga. 472 (2003), the GA Supreme Court approved of a Georgia Bar Association UPL advisory opinion that limited the closing attorney role to GA licensed attorneys. There, in dicta, the Court noted that it has “…consistently held that it is the unauthorized practice of law for someone other than a duly licensed Georgia attorney to close a real estate transaction or to prepare or facilitate the execution of such deed(s) for the benefit of a seller, borrower, or lender.” Id., at 472. Taking the foregoing into consideration, GA law is clear that a GA licensed attorney can only serve as the closing attorney, and, by extension, must be the one who executes the Closing Attorney’s Affidavit.