Update: Georgia Restrictive Covenant Act

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 whether it did or could take effect as intended.

State Representative Wendall Willard, Chairman of the House Judiciary Committee, therefore recently introduced House Bill 30, which states that its intention is to “remove any such uncertainty by substantially reenacting the substantive provisions of HB 173 [the Restrictive Covenant Act].” The Bill also states that its enactment should not be taken as evidence that the previous statute was invalid. If passed, House Bill 30 would go into effect immediately when the Governor signs it, but would not retroactively apply to any contract signed before it takes effect.

Whether and when this new bill may pass is currently unknown. It is not yet on the legislative calendar.

Whether you are for or against this legislation, you should contact your local representative to voice your opinion.

This information is presented for educational purposes and is not intended to constitute legal advice. Opinions expressed are those of the author and not of Morris, Manning & Martin, LLP; see disclaimer at http://www.www.mmmtechlaw.com/privacy-policy-and-disclaimer/. Contact Jason D’Cruz or Brian Harris for more information at jdcruz@mmmlaw.com and bharris@mmmlaw.com.