Flipping houses can be exciting, especially when the market is hot. But before you dive into renovations and quick resales, it’s smart to understand the legal rules that apply in Georgia. Making the wrong move could lead to fines or worse.
Understanding property disclosure laws
When you sell a flipped house in Georgia, you’re required to tell buyers about known defects. Even if you fixed a problem, you must share that it existed. Skipping this step can lead to lawsuits. Georgia follows a “caveat emptor” or “buyer beware” rule, but if you hide major issues, that protection won’t help. To stay on the safe side, provide full written disclosures.
Permits and code compliance matter
Renovations often need permits, especially for plumbing, electrical, or structural changes. Without them, you risk violating local building codes. If your flip doesn’t meet code, it could block the sale or bring fines from local officials. Make sure all work meets Georgia building regulations and passes required inspections before listing the home.
Avoiding unlicensed contractor trouble
If you hire help, use licensed contractors. Georgia law requires contractors to be licensed for major construction work. Hiring unlicensed workers can result in penalties and make you liable for faulty repairs. Always check their license and keep written contracts for every job.
Watch out for financing and tax issues
Flipping houses counts as a business, not just an investment. That means your profits are subject to income tax, not capital gains rates. If you’re funding your flip through loans, make sure your financing terms follow state laws on private lending and interest rates. Georgia usury laws can apply if you borrow from individuals instead of banks.
Understanding the rules helps your flip go smoothly and keeps you out of legal trouble.