A deed under power in Georgia is the document a lender uses to transfer ownership of real estate after a non-judicial foreclosure sale. It takes its name from the “power of sale” clause written into the original security deed, which authorizes the lender to auction the property if the borrower defaults and then convey title to the winning bidder without going through court.
Why Georgia Lenders Can Sell Without a Lawsuit
Georgia is a title theory state. When you borrow money to buy a home, you sign a security deed that gives the lender legal title to the property until the loan is paid off. Most security deeds contain a power of sale clause, and Georgia law requires those powers to be strictly construed and fairly exercised.1Justia. Georgia Code 23-2-114 – Powers of Sale to Be Construed Because the authority sits inside the security deed itself, the lender does not need a court order to foreclose. The tradeoff is a set of strict notice and advertising rules; miss one, and the sale can be voided.
What Must Happen Before the Sale
Two things have to be done before a valid foreclosure sale can occur: personal written notice to the borrower, and public advertisement of the sale.
Written Notice to the Borrower
The lender must send the borrower written notice at least 30 days before the sale date. The notice has to include the name, address, and phone number of whoever has full authority to negotiate, amend, or modify the loan terms. It must go by registered mail, certified mail, or statutory overnight delivery with return receipt requested, either to the property address or to another address the borrower designated in writing, and it must include a copy of the sale notice that will be published.2Justia. Georgia Code 44-14-162.2 – Mailing or Delivery of Notice to Debtor The party identified as having negotiating authority can be the lender, a loan servicer, or an attorney, as long as that person actually has the authority described.3Justia. You v. JP Morgan Chase Bank, N.A., 293 Ga. 67 (2013)
Public Advertisement
The sale must be advertised and conducted the same way a sheriff’s sale is in the county where the property sits.4Justia. Georgia Code 44-14-162 – Sales Made on Foreclosure Under Power of Sale That means weekly publication for four consecutive weeks in the county’s legal organ, the officially designated local newspaper.5Justia. Georgia Code 9-13-140 – How Judicial Sales Advertised The advertisement must include a full legal description of the property and, if available, the street address in bold type.
The Foreclosure Auction
Georgia foreclosure auctions take place on the first Tuesday of each month at the county courthouse, between 10:00 a.m. and 4:00 p.m. If that Tuesday is New Year’s Day or Independence Day, the sale moves to the following Wednesday. No other holidays shift the date.6Justia. Georgia Code 9-13-161 – Where and When Sales Under Execution Held
The property goes to the highest cash bidder. If no outside bidder shows up, the lender typically takes the property through a credit bid, applying the unpaid loan balance toward the purchase price. Once bidding ends, the lender executes the deed under power to convey title to the winning buyer.
What the Deed Must Contain and When It Gets Recorded
The deed under power must include the foreclosure sale date, a legal description of the property, and the name of the new owner. Georgia law requires deeds to real property to be in writing, signed by the maker, and attested by an officer and one additional witness.7Justia. Georgia Code 44-5-30 – Requisites of Deed to Lands A defective legal description can cloud title for years and usually requires a corrective deed or quiet title action to fix.
After execution, the deed is filed with the clerk of the superior court in the county where the property is located. Recording puts the ownership change on the public record and protects the new owner’s title against later claims by people who did not know about the transfer.8Justia. Georgia Code 44-2-2 – Duty of Clerk to Record Certain Transactions Affecting Real Estate
Georgia sets a filing deadline. The deed under power must be recorded within 90 days of the foreclosure sale. If the holder misses that window by more than 30 additional days, the clerk charges a $500 late filing penalty on top of standard recording fees. The penalty is collected by the county, and when the property is inside city limits, the county forwards it to the municipality.9Justia. Georgia Code 44-14-160 – Filing of Foreclosure and Deed Under Power
Transfer Tax
Georgia imposes a real estate transfer tax on deeds under power. The rate is $1.00 for the first $1,000 of value (or any fraction of it) and $0.10 for each additional $100, calculated on the sale price minus any preexisting liens that survived the sale.10Justia. Georgia Code 48-6-1 – Transfer Tax Rate The tax has to be paid before the clerk will record the deed. On a $200,000 sale with no surviving liens, that works out to roughly $201.
What It Means for the Borrower After the Sale
Once the deed under power is executed and recorded, the former borrower’s ownership interest in the property is gone. Georgia does not give borrowers a statutory right to redeem the property after a non-judicial foreclosure sale.
Deficiency Judgments
If the auction price does not cover the full loan balance, the lender can pursue the borrower for the difference, called a deficiency. The lender cannot simply send a bill. Within 30 days after the sale, the lender must report the sale to the superior court judge in the county where the property is located and ask the court to confirm it.11Justia. Georgia Code 44-14-161 – Sales Made on Foreclosure; Deficiency Judgment
The court requires evidence of the property’s true market value and will only confirm the sale if satisfied the property actually brought that amount at auction. The borrower gets at least five days’ notice of the confirmation hearing and can appear to contest the sale price. If the court finds the property sold for less than true market value, it can order a resale. If the lender misses the 30-day window, the right to a deficiency judgment is lost entirely.11Justia. Georgia Code 44-14-161 – Sales Made on Foreclosure; Deficiency Judgment Because there is no post-sale redemption right, this hearing is the borrower’s primary opportunity to challenge whether the sale was conducted properly.
A Tax Bill That Catches People Off Guard
A foreclosure can also trigger federal income tax. When the lender acquires the property, it files IRS Form 1099-A. If the lender cancels any remaining debt of $600 or more in the same year, it may also file Form 1099-C, and the IRS generally treats the canceled amount as taxable income to the borrower.12Internal Revenue Service. Instructions for Forms 1099-A and 1099-C The Mortgage Forgiveness Debt Relief Act, which long allowed borrowers to exclude canceled mortgage debt on a principal residence from income, expired on December 31, 2025, and as of 2026 has not been renewed. A borrower who loses a primary residence to foreclosure in 2026 may owe federal income tax on any forgiven debt unless another exclusion applies, such as insolvency at the time of cancellation. This is worth raising with a tax professional before or immediately after the sale.
Grounds for Challenging a Deed Under Power
The most common attack on a deed under power is defective notice. If the lender failed to send the required 30-day written notice to the borrower’s last known address, or left out the contact information for someone authorized to negotiate the loan, the sale may be void.2Justia. Georgia Code 44-14-162.2 – Mailing or Delivery of Notice to Debtor The same applies if the advertisement did not run for four consecutive weeks, or the sale was held at the wrong time or location.4Justia. Georgia Code 44-14-162 – Sales Made on Foreclosure Under Power of Sale
Execution defects matter too. A deed that was not properly signed and witnessed under Georgia law can be rejected by a court.7Justia. Georgia Code 44-5-30 – Requisites of Deed to Lands Legal description errors, such as a wrong lot number or missing parcel information, are another frequent problem. A borrower who spots a procedural defect early has a real chance of voiding the sale, and the confirmation hearing is a built-in moment to raise sale-price objections.
If You Are a Tenant in a Foreclosed Property
A deed under power does not automatically evict tenants. The federal Protecting Tenants at Foreclosure Act, made permanent in 2018, requires the new owner to honor existing leases through the end of their term. Month-to-month tenants and tenants with fewer than 90 days left on a lease must still receive at least 90 days’ written notice before being required to leave. The one exception is a new owner who plans to move in as a primary residence; that owner does not have to honor the remaining lease term but still must give 90 days’ notice.
The law applies only to “bona fide” tenants, meaning people who are not closely related to the former owner and who pay something close to market rent or receive a housing subsidy. Section 8 voucher holders get extra protection: a change of ownership through foreclosure alone is not good cause for eviction.
If You Are a Buyer at the Auction
A deed under power conveys whatever title the lender had authority to transfer. If the underlying foreclosure was flawed, the buyer’s ownership can be challenged later. Before bidding, examine the notice and advertisement records for the sale, and seriously consider title insurance to protect against claims arising out of defects in the foreclosure process.