Appeals Court Decision May Limit Construction Warranties in Georgia to Eight Years

A recent case from the Court of Appeals of Georgia could lead to significant changes related to construction warranties. In Southern States Chemical v. Tampa Tank & Welding, the appellate court appeared to disregard the effects of certain long-term contractual warranties, instead finding that any action for damages is precluded by the eight year period under the statute of repose.

The case involved claims of breach of contract and breach of express written warranties related to faulty renovation and testing of a sulfuric acid storage tank. Southern States Chemical, the manufacturer who brought the action, had an express one-year warranty in its renovation contract, but brought the claim ten years after renovation was completed. To argue that the damage was still covered by warranty, it claimed that calculations of system life expectancy in post-installation reports acted as an express 40-plus year warranty.

After finding that Southern would not be covered by the 40-plus year warranty because of an issue with consideration, the court went further and considered the statute of repose.  Southern argued that the statute of repose did not apply because its claim was based on breach of an express promise, not negligence or construction deficiency. However, the court found no distinction in the statute between negligence and contract claims. It stated, “[w]hether in tort or in contract, the statute broadly precludes any action to recover damages brought outside the eight year period of repose.” Ultimately, the court held that Southern’s contractual claims were barred by the statute of repose because the action was brought ten years after renovations were completed.

The case is raising concerns for building owners and contractors, who rely on the validity of their warranties. Attorneys speaking to Bisnow gave multiple interpretations, many confirming the building owners’ and contractors’ concerns. One attorney claimed that the language of the decision is clear in limiting any actions based on property improvements, even when there is a signed warranty between the parties. Another attorney also understands the case to cut off warranties at eight years, a decision he says will deny owners of commercial real estate “their fundamental right of contract.” On the other hand, one attorney interprets the case slightly differently, claiming that the court may have come to a different decision had they been considering a true 40-plus year warranty, rather than the unofficial 40-plus year warranty at issue in the case.

Whether or not the decision does, in fact, limit all actions to recover damages to eight years, there will be numerous lawsuits brought following this case based on the new uncertainties. Owners of commercial real estate should closely follow the fallout of this case.

About the author

Melanie Tate is a J.D. candidate at Emory University School of Law. Melanie earned her B.A. in literature from Louisiana State University. She is a 2019 – 2020 legal intern at Caiaccio Law Firm.

Tax and Legal Summit Registration

Reduce Your Taxes, Protect Your Wealth at the 2020 Tax & Legal Summit

Learn how to reduce your taxes in 2020

We are happy to announce that CLF founder Kevin Caiaccio and Associate Attorney Trey Chancellor will be speaking at the virtual 2020 Tax & Legal Summit for Real Estate Investors. Mr. Caiaccio and Mr. Chancellor will join a stellar panel of credentialed speakers to answer questions and provide expert insight on tax and legal issues associated with real estate investments. This 2-day event will be broadcast as a live webinar on Saturday, February 29th and Sunday, March 1st 2020.

Sponsored in part by The Real Estate CPA and, the summit offers actionable advice to help investors build tax-efficient wealth. Attendees will learn how to save money and protect their assets by implementing key tax and legal strategies.

Topic areas include:

  • Deferring Capital Gains
  • Boosting Rental Losses
  • Rental Property Tax Optimization
  • High Net Worth Strategies
  • Entity Structuring Strategies
  • Partnership Legal Issues
  • Contracts and Agreements
  • Estate Planning Strategies

Mr. Caiaccio is a recognized leader and expert in commercial real estate law. Through more than 25 years of practice in this industry, he has developed strong relationships with real estate sponsors, lenders, developers, and investors. He is a frequent lecturer on real estate investment and development as well as equity structuring for commercial real estate ventures.

As a commercial real estate attorney, Mr. Chancellor has counseled developers, lenders, investors, and syndicators in all facets of a commercial real estate transaction, including entity formation, organizational structuring, commercial financing, securities law compliance, and acquisition and disposition of commercial assets.

If you’re interested in protecting your wealth and reducing taxes associated with your real estate investment, visit the Tax & Legal Summit registration website and reserve your seat today. Use promo code KEVINC20 or TREY20 to save 50% on your tickets!

About the author

Melanie Tate is a J.D. candidate at Emory University School of Law. Melanie earned her B.A. in literature from Louisiana State University. She is a 2019 – 2020 legal intern at Caiaccio Law Firm.

commercial real estate group people

The Commercial Real Estate Market in 2020… What Can We Expect?

The year is coming to an end, and there are a lot of questions about what to expect in the commercial real estate market as we kick-off a new decade.

As the fear of a recession wanes, most experts are predicting continued growth in the commercial real estate market. Hardy economic activity, strong property fundamentals, low-interest rates, and the attractiveness of real estate as an asset are the driving factors supporting the outlook according to the CBRE 2020 Real Estate Outlook report.

Here are some key predictions for 2020:


Slow economic growth caused the Federal Reserve to cut interest rates three times in 2019. The economic slow-down is expected to continue due to several issues creating higher levels of uncertainty including slowing global growth, ongoing trade wars, and the 2020 election. Experts predict at least two more cuts in 2020 as an attempt to stimulate the economy and prevent a recession. According to the CBRE 2020 outlook, the federal fund rate is expected to be reduced to a range of 1.0% – 1.5%.


Property fundamentals are predicted to continue on an upward trend but slow from the past two years. According to the report published by CBRE, the tech industry will drive demand for leased space in the coming year. As with most of the commercial outlook, growth in the flex workspace is anticipated to slow.


More retail stores are expected to open than close in the new decade. The recognition of the importance of a physical store to enhance brand awareness has grocers, franchisers and health and beauty brands opening storefronts nationwide. Companies in the health and beauty sector, such as specialty fitness, are leveraging their social presence to increase memberships and drive demand for more physical locations.


The CBRE report points to the six-year growth in specialty sectors including self-storage, medical office space, senior and student housing, etc. Investor interest in these areas has steadily increased recently and will continue in 2020.

Barring any unforeseen risks, commercial real estate is expected to yield positive results in 2020.

About the author

Kevin Caiaccio, founder of Caiaccio Law Firm, has more than 25 years of experience practicing commercial real estate law. His cut-through-the-noise mentality encourages clients and colleagues to be selective and focus on big-picture solutions. He believes in fighting for what’s important and filtering through obstacles that distract.

Dover Delaware map LLC

LLC FAQ: Why form an LLC in Delaware?

FAQs about LLC formation in Delaware

At CLF, we frequently form a limited liability company (LLC) for our real estate clients. More often than not, we form the LLC in the State of Delaware. Clients and their investors will sometimes ask, why Delaware rather than the state where the deal sponsor resides or where the property is located?

There are many reasons why Delaware is the premier location for forming entities in the United States:

Delaware Corporate Law is Well-developed and Pro-Business

Delaware takes pride in having one of the most advanced and pro-business statutes in the nation. The state legislature regularly updates the code with input from corporate law practitioners, and accordingly, the code is considered cutting edge and a model for other states. In addition to the code, the court system is designed for business. Corporate disputes are resolved in the Court of Chancery by judges who specialize in this area. The resulting case law is well developed which creates substantive guidance and greater predictability in outcomes. The judiciary and the legislature function together to develop the law, with the legislature at times responding based on the findings of the courts. For these reasons, corporate attorneys across the country know Delaware law, and institutional investors often prefer to invest in Delaware LLCs.

The Delaware Act Provides Superior Liability Protection

Delaware law offers liability protection superior to most other jurisdictions. As is generally true for LLCs and other limited liability entities, if a creditor obtains a judgement against the company—provided that the company is properly formed and maintained—the creditor may not enforce collection against the members’ assets (this is the standard liability protection). Delaware law, however, goes a step further. If a member of an LLC (even if a single member LLC) is subject to a judgment, the creditor cannot take control of the LLC or acquire any of the company assets. Creditors of a member can only receive an economic interest in the LLC’s distributions to that member, not a controlling interest or a right to liquidate the LLC (called a “charging order,” which is the exclusive remedy for creditors of the members). Many other states are less clear on whether the charging order is the creditor’s sole remedy.

The Law Allows for the Tailoring Manager Liability

One key aspect of Delaware corporate law is to honor the principle of freedom of contract by allowing the parties flexibility in drafting their governing documents. An example of the contractual freedom is that the law in Delaware allows a Manager to eliminate (or reduce) its fiduciary duties to the members, thus mitigating risk of investor lawsuits. In an effort to balance the risk allocation and to protect investors, the law expressly provides that the company and its officers may not eliminate the implied contractual covenant of good faith and fair dealing.

The Law Provides Freedom of Contract on a Wide Range of Issues

In addition to contractual freedom related to fiduciary duties, Delaware law provides freedom to contract on a variety of other issues. First, the law permits company agreements to provide for separate classes or groups of members and separate series of LLC interests. There are also many options for voting rights of members. Members can vote on a per capita, number, financial interest, class, group, or any other basis, and members are not required to have voting rights under the agreement. Finally, LLCs have flexibility to contract on issues including indemnification, exculpation, and informational rights. This significant freedom is balanced by the Delaware courts, who respect the considerable freedom given to LLCs, but also have the power to step in to prevent inequitable conduct.

The Costs are Reasonable

The cost of forming and maintaining an LLC in Delaware are reasonable: a $250 initial filing fee and a $150 annual registration fee are generally all that are required for most companies. You will need to hire a registered agent service located in the State which generally costs about $200 per year. Aside from these fees, there are no income taxes, sales taxes, or personal property taxes if the company does not do business in the state. In addition to low costs, formation can be as simple as needed. The law provides no minimum capital requirements and requires no more than a single member to form an LLC. 

The State Allows for Anonymity

Unlike some other states, Delaware law allows managers and members of the Company to remain anonymous. The only public filing for an LLC is the certificate formation which merely lists the company’s name and Delaware registered agent (which can be a corporate service with no other affiliation or ownership in the company). This anonymity makes it difficult for potential creditors to identify the owner of interests in the company and its assets. 

For these reasons, Delaware is considered the national forum for entity creation and is universally accepted and understood by attorneys, lenders, and investors around the country. The lawyers in our firm have vast experience and familiarity with Delaware law concerning LLCs, and hiring separate Delaware counsel is not required. If you have questions about the formation of your real estate LLC, please contact one of the attorneys at CLF.

About the authors

Kevin Caiaccio is the founder of Caiaccio Law Firm and has more than 25 years of experience practicing commercial real estate law. His cut-through-the-noise mentality encourages clients and colleagues to be selective and focus on big-picture solutions. He believes in fighting for what’s important, and filtering through obstacles that distract.

A native of Atlanta, Kevin is a graduate of Georgia State University. He earned his J.D. degree, cum laude, from The University of Georgia School of Law in 1995, where he was a member of the Managing Board and the Editorial Board of the Georgia Law Review. He has been a member of the State Bar of Georgia since 1995.

Melanie Tate is a J.D. candidate at Emory University School of Law. Melanie earned her B.A. in literature from Louisiana State University. She is a 2019 – 2020 legal intern at Caiaccio Law Firm.

multifamily construction

Multifamily Investment Forecast 2020

The multifamily segment of commercial real estate remained strong in 2019, but what does the forecast look like for 2020? 

With recent rate cuts by the Federal Reserve the commercial real estate sector is in a wait-and-see period for how these cuts will impact investment in multifamily properties.  Additionally, the on-again, off-again trade war has created a headwind on the commercial real estate market that adds to the wait-and-see approach due to the uncertainty of the repercussions, if any, of a possible resolution to that issue.

According to the Marcus & Millichap Multifamily Investment Forecast for 2020, household formation will continue to outpace new construction.  Construction will continue to increase but the rate will not be enough to catch up to household formation.  This will lead to downward pressure on vacancy rates for multifamily. The forecast is that vacancy rates will remain low with a strong outlook for the coming year.  The leading regions in the US for household formation and population growth are the Southeast and Southwest. Multifamily investment in these regions is strong as the demand for housing increases with the population increase.

The increased demand for housing is especially strong for affordable housing.  However, the cost of construction has created a limitation on the multifamily market.  Current constructions costs are to a point that building anything but Class A apartments is unprofitable.  These high costs will continue to lead to an inability to keep up with demand for affordable housing.

Overall, the outlook for multifamily investment in commercial real estate looks to continue to be strong for 2020.  The impact of the recent rate cuts by the Federal Reserve and the current trade war remain to be seen, but the signs of continued growth in multifamily are still good with household formation continuing to rise and vacancy rates staying low.  2020 looks to be another good year for multifamily investment.

About the Author

Attorney Michael Gay joined Caiaccio Law Firm in 2017 as an associate attorney handling commercial real estate transactions.  Prior to that, he worked in the corporate world, in business management and accounting. During his studies to transition into law, Michael served as Secretary of the Older Wiser Law Students organization at Mercer Law School.

Michael is married and has one son. He is an Eagle Scout, an avid college football fan, and he enjoys exploring the outdoors.

He can be reached at and by calling 404.846.4990 x 7.

apartment multifamily condo

Apartment Rent Growth Remains Strong 

Apartment rental rates continue to grow

After some deceleration in multifamily rent growth earlier this year, a recent report indicates that apartment rental rates resumed impressive gains in the third quarter. According to the report from Yardi Matrix, year-over-year rent growth in October was 3.2% nationwide in 30 major markets, increasing to an all-time high average of $1,476. 

There are many factors which continue to drive demand for multifamily units, including low unemployment, demographic changes, household creation, and a shortage of entry-level housing.  Due to these factors, the Yardi report concludes that in the near term rent growth should remain above the historical long-term average of 2.5% increases year-over-year.  

In the Southeast, rents increased faster than the national average as the region continues to benefit from national migratory and demographic trends. For example, several metro areas saw growth well in excess of the national average, including:  Raleigh (5.1%), Charlotte (4.8%) and Nashville (4.6%). Rents increased in these markets despite significant increases in supply as absorption rates remain high. 

In the Atlanta market, rental increases were near the national average for all multifamily asset classes and well above average (over 6%) in the “Renter-by-Necessity” asset class. Job creation in metro Atlanta remains above the national rate helping to sustain apartment demand. In particular, Class C assets are benefiting from vacancies near all-time lows. 

This recent performance continues a long-term trend with average apartment rents up 32% over the past eight years. 

Strong rent growth has, however, created a financial burden on many households and exacerbated problems with affordability. This has created immense political pressure to take action and has led to recent rent-control legislation. In addition to legislation recently passed in Oregon, New York and California, twelve states are currently considering similar restrictions on rental increases. While housing affordability remains a daunting challenge, rent-control laws tend to limit new supply and worsen the problem in the long term.  Accordingly, more innovative solutions will likely be required. 

At CLF, we note continued optimism from our multifamily investor clients as trading activity remains robust. 

About the Author

Kevin Caiaccio, founder of Caiaccio Law Firm, has more than 25 years of experience practicing commercial real estate law. His cut-through-the-noise mentality encourages clients and colleagues to be selective and focus on big-picture solutions. He believes in fighting for what’s important, and filtering through obstacles that distract.

multifamily building

Multifamily Lending: Regulators Increase Caps for Fannie Mae and Freddie Mac

Green Loans No Longer Excluded from Caps on Multifamily Lending

By: Kevin Caiaccio

The Federal Housing Finance Agency (FHFA) has revised and increased the caps on multifamily lending by Fannie Mae and Freddie Mac. The new caps, effective as of October 1, 2019, are $100 billion for each agency for the five-quarter period running Q4 2019 through Q4 2020. These caps represent an increase from prior limits and indicate continued bullishness for the multifamily originations market. 

Multifamily lending exclusions eliminated

In a tradeoff, the regulations have eliminated all exclusions, including the popular exclusion for green loans such as Fannie Mae’s Green Rewards and Freddie Mac’s Green Up programs. (These are multifamily loans that provide financing for energy efficiency improvements). Under prior policy enacted in 2016, there were no limits on the amount of multifamily green loans. As a result of the exclusions, which the regulators felt had become overly broad, the agencies’ market share has grown sharply. In fact, nearly half of the agencies’ loans were excluded from prior caps due in large part to the green programs (see chart below). 

New Guidelines

In other regulatory changes, the new guidelines mandate that 37.5% of all lending by the government-sponsored enterprises (GSEs) qualify as affordable housing by meeting certain definitions of “mission-driven loans.” This reflects the FHFA’s increasing emphasis on affordability and continued efforts to address the problem of lack of affordable housing across the United States:

“These new multifamily caps eliminate loopholes, provide ample support for the market without crowding out private capital, and significantly increase affordable housing support over previous levels,” FHFA Director Mark Calabria said in prepared remarks.

Prior to the enactment of the changes, GSE lending had slowed due to uncertainty in the marketplace. Because the new regulations will ensure good liquidity in the lending market for the next five quarters, they have been well received by borrowers and lenders.

Fannie Mae and Freddie Mac loans continue to be the most popular financing vehicles for CLF clients trading in stabilized multifamily assets.

About the author

Kevin Caiaccio, founder of Caiaccio Law Firm, has more than 25 years of experience practicing commercial real estate law. His cut-through-the-noise mentality encourages clients and colleagues to be selective and focus on big-picture solutions. He believes in fighting for what’s important, and filtering through obstacles that distract.

Real Estate Investors Alliance (REIA) panel in Atlanta

Trey Chancellor, Esq., spoke at a Real Estate Investors Alliance (REIA) panel discussion in July

Caiaccio Law Firm Attorney Trey Chancellor participated in a panel discussion with the Atlanta Real Estate Investors Alliance (REIA) on Thursday, July 25, 2019, to discuss the ins and outs of commercial real estate investing.

Caiaccio Law Firm Attorney Trey Chancellor participated in a panel discussion with the Atlanta Real Estate Investors Alliance (REIA) on Thursday, July 25, 2019, to discuss the ins and outs of commercial real estate investing.

The panelists consisted of a variety of professionals involved in varying aspects of commercial real estate and had an educational and engaging discussion with the attendees. Trey answered questions regarding the legal perspective on landing a deal, the nuances of negotiating terms, and what the current market is looking for when it comes to seller expectations.

Learn more about Caiaccio Law Firm’s real estate law services including acquisitions, leasing and, financing.

Real Estate Acquisitions

The Caiaccio Law Firm assists its clients by managing and facilitating the acquisition and development of real property from the initial contract negotiations through due diligence, deal structuring, closing, and resale. We act as a partner to our developer and investor clients by learning their business objectives and providing a legal perspective to the negotiations. While thoroughly representing our clients’ interests, we understand that business considerations drive deal making. The legal professional’s job is to provide information so that the principals can make appropriate business judgments concerning legal risks. Our goal is to help achieve the client’s objectives and to provide efficient, timely, and cost-effective closings.

Real Estate Financing

The Caiaccio Law Firm works with banks, private equity sources, and other lenders in all aspects of real estate financing, including debt, equity, and mezzanine lending. Our objective in closing a loan transaction is to manage and facilitate the process through regular communication. In representing banks and other regulated institutions, our goal is always to prevent any documentation exceptions and to provide responsive service. We understand that lenders need sophisticated legal counsel who provide superior service at competitive rates without sacrificing attention to detail.

Real Estate Leasing

In most commercial real estate transactions, the value of the asset is determined by the strength of the leases. At the Caiaccio Law Firm, we have broad experience in negotiating and drafting all manner of leases from both the perspective of the landlord and the tenant. This experience includes retail, residential, multi-family, office, and industrial leases. We have negotiated countless retail leases on behalf of landlords with many of the leading national retailers.

Real Estate Syndication – Entity Structuring, Legal Issues, & Tax Strategies

Are you on the brink of making a move on a corporate real estate venture? If so, it’s highly likely that you’ve encountered a myriad of questions and your research has quickly tripled or quadrupled in size. We’ve prepared some information that should help.

Contacting a Corporate Real Estate Attorney

One of the first issues you may face is deciding when to contact a corporate real estate attorney. Trey Chancellor of the Caiaccio Law Firm suggests to “bring us in when you’re comfortable you may have a deal so you can have us draft an early access agreement”. Named partner Kevin Caiaccio cautions about dead deal costs, “you don’t want to get into a deal, run up a legal bill and then it doesn’t pencil out the way you expect it and have to terminate.” 

There’s no question about it, legal issues related to acquiring and disposing of properties, entity structuring, and tax strategies tied to real estate syndication can be quite complex. 

Entity Structuring

Although there are some common characteristics such as dealing with LLCs; when it comes to entity structures “it’s certainly not one size fits all” explains Mr. Caiaccio. “Every structure has some nuances and unique qualities.” As a limited partner in a deal, Mr. Chancellor advises following the simple but extremely important step of “knowing who the syndicator or general partner (GP) is.”

Avoiding Legal Issues

From a legal expert’s perspective, “we approach when we are buying as if we could sell the property,” says Trey Chancellor. With this strategy in mind, plan ahead to mitigate any legal issues that may arise when it comes time to sell. Verify that titles, zoning, surveys, etc. are all clearly defined, accurate, and up to date. 

Planning Tax Strategies

Mr. Caiaccio and Mr. Chancellor both agree “there are a lot of attorneys out there who draft these operating agreements who do not fully understand the tax allocations.” They both advocate having a CPA in the “org chart from the outset.” Have your CPA make suggestions on how to word certain allocations as opposed to doing so when the first tax season rolls around after the deal is complete.  

For more information on this topic, check out the latest podcast from The Real Estate CPA with guests Kevin Caiaccio and Trey Chancellor. In the market for a Real Estate Attorney? Visit Caiaccio Law Firm at

Grand Opening of the Drayton Hotel

The Maypole Group has breathed new life into a beautiful piece of history nestled in downtown Savannah, Georgia. The Drayton Hotel, one of the oldest buildings in Savannah, has been stunningly reborn thanks to the efforts of Raghav Sapra, founder of Maypole Group. His firm, which will also operate this lovely boutique hotel, spared no expense creating a luxury lodging that captures the soul of its historic community.

On the outside, this new 50 room hotel stays true to its 19th-century origins with traditional Victorian architecture. The restoration process carefully preserved the exterior design responsible for the rich nostalgia that is represented throughout the first city of Georgia. On the inside, Mr. Sapra and the Maypole Group added luxury features while still preserving the iconic southern charm. The result is a contemporary aesthetic touched with classic Savannah style.

Don’t let the 130-year-old architecture fool you, this hotel features all the modern amenities guests want. In addition to luxurious rooms and suites, there is also a brasserie, coffee bar, downstairs cocktail lounge, and a breathtaking rooftop experience with 360 views of the Savannah River and cityscape. Mr. Sapra paid special attention to detail with custom furniture in almost every room and antiques or found objects accented throughout.

The Drayton’s restaurant, named St. Neo’s, after the patron saint of fish, will be a seafood brasserie and oyster bar. It will showcase fresh local seafood cooked to mimic the flavors of the old south. The ground floor coffee bar features freshly baked pastries and premium coffee available for guests to enjoy in the newly decorated lobby or on the go. The beautiful rooftop offers unmatched views of Savannah and picturesque sunsets– a perfect backdrop for evening cocktails. It also features several private and semi-private areas that are perfect for private events.

Rooms start off around $259 a night depending on the time of stay and room type. Reservations are available on The Drayton Hotel website.

The Caiaccio Law Firm provides comprehensive and sophisticated legal services to our clients in transactions involving commercial real estate assets throughout the U.S. We enhance their reputation while providing security and peace of mind. Our experts translate legal language to business terms, enabling our clients to completely understand every step of their transactions. We strive to be the most sophisticated boutique law firm in the Atlanta area, providing diversified risk management navigation to clients. Call us today at 404.846.4990 or visit our website.