Update: Georgia Restrictive Covenant Act

The Georgia Legislature has taken its first step toward resolving constitutional questions regarding the new Georgia Restrictive Covenant Act (the “Act”).

As discussed in an earlier alert, the Act was intended to take effect on November 3, 2010, immediately following Georgia voters’ ratification of a Constitutional amendment designed to give effect to the Act. However, because the Constitutional amendment itself failed to include an effective date, the amendment did not take effect until January 1, 2011, two months after the Act. As a result, the Act was exposed to possible constitutional challenge, including questions as to

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