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                                                                    EXHIBIT 5.1


                 [HOLT NEY ZATCOFF & WASSERMAN, LLP LETTERHEAD]


                                 April 6, 1998


American Realty Trust, Inc.
10670 North Central Expressway, Suite 300
Dallas, Texas 75231

Andrews & Kurth L.L.P.
Attn: J. Kevin Boardman, Esq.
1717 Main Street, Suite 3700
Dallas, Texas 75201

         Re:     POTENTIAL ISSUANCE OF SHARES OF COMMON STOCK, PAR VALue $.01
                 PER SHARE ("COMMON STOCK"), OF AMERICAN REALTY TRUST, INC., A
                 GEORGIA CORPORATION ("ART"), UPON EXERCISE OF OPTIONS GRANTED
                 PURSUANT TO ART'S 1997 STOCK OPTION PLAN (THE "PLAN")

Ladies and Gentlemen:

         We have acted as special Georgia counsel to ART with respect to the
application and interpretation of the Georgia Business Corporation Code (the
"GBCC") to the potential issuance of shares of Common Stock upon exercise of
options granted pursuant to the Plan. This opinion letter is rendered at the
request of ART to facilitate ART's contemporaneous registration (the
"Registration") of 300,000 shares of Common Stock with the Securities and
Exchange Commission for potential issuance upon exercise of options granted
pursuant to the Plan.

         In the capacity described above, we have considered such matters of
law and of fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of ART,
certificates of officers and representatives of ART, certificates of public
officials, and other documents as we have deemed appropriate as a basis for the
opinion hereinafter set forth.
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HOLT NEY ZATCOFF & WASSERMAN, LLP

American Realty Trust, Inc.
Andrews & Kurth L.L.P.
April 6, 1998
Page 2

         Based upon the foregoing, as of this date, and subject to the
assumptions, limitations and qualifications set forth in the lettered
paragraphs which follow this paragraph, we are of the opinion that upon a
Qualified Issuance (as defined in the following sentence) of shares of Common
Stock the shares of Common Stock issued in connection therewith will be duly
authorized, validly issued, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof. For purposes of this opinion, an
issuance of shares of Common Stock is a "Qualified Issuance" if, and only if:
(a) it is effected in accordance with the Plan upon exercise of one or more
options granted pursuant to the Plan; and (b) the number of shares of Common
Stock being issued in connection therewith does not cause the total number of
issued shares of Common Stock to exceed the total number of shares of Common
Stock which ART is authorized to issue.

         The opinion expressed herein is subject to the following assumptions,
limitations and qualifications.

         A.      As to various questions of fact material to this opinion, we
                 have relied solely upon the statements and certifications of
                 Robert A. Waldman, Secretary of ART.

         B.      We have made no investigation regarding the accuracy or
                 truthfulness of any representations, warranties, statements of
                 fact or assumptions of fact contained in any documents,
                 records, instruments, letters or other writings examined by
                 us, and we express no opinion herein regarding the same.

         C.      We expressly note that our opinion expressed herein does not
                 mean that: (a) any past or future authorization of shares of
                 Common Stock complied or will comply with agreements by which
                 ART is bound; (b) any particular issuance of shares of Common
                 Stock will be a Qualified Issuance or will comply with
                 agreements by which ART may now or then be bound; (c) any past
                 or future authorization of shares of Common Stock or any
                 particular issuance of shares of Common Stock complied or will
                 comply with (i) the fiduciary duties of the directors of ART
                 or (ii) any law other than the GBCC (including but not limited
                 to federal or state securities laws); (d) ART has reserved or
                 has available or will reserve or have available sufficient
                 numbers of authorized shares of Common Stock to effect any
                 particular issuance upon exercise of
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HOLT NEY ZATCOFF & WASSERMAN, LLP

American Realty Trust, Inc.
Andrews & Kurth L.L.P.
April 6, 1998
Page 3

                 options granted pursuant to the Plan; (e) the consideration
                 that ART will receive in connection with any particular
                 issuance of shares of Common Stock upon exercise of options
                 granted pursuant to the Plan will be (i) equivalent (or
                 approximately equivalent) in value to the value of the shares
                 being issued or (ii) adequate as a matter of fairness to ART
                 and its shareholders; (f) a holder of shares of Common Stock
                 issued upon exercise of an option granted pursuant to the Plan
                 will be immune from other types of liabilities, such as (i)
                 liability under any note or other evidence of indebtedness
                 issued by or other obligation undertaken by such holder in
                 connection with such exercise, or (ii) liability for
                 distributions in violation of Section 640 of the GBCC or under
                 the "piercing the corporate veil" theory; or (g) any past or
                 future authorization of shares of Common Stock, or any
                 particular issuance of shares of Common Stock, has not unfairly
                 diluted or will not unfairly dilute the investment value of
                 existing shareholders of ART. Our opinion assumes that each of
                 items (a) through (g) (other than item (e)(i)) is or will be
                 true.

         D.      This opinion letter is limited by, and is in accordance with, 
                 the January 1, 1992 edition of the Interpretive Standards (the
                 "Interpretive Standards") Applicable to Legal Opinions to Third
                 Parties in Corporate Transactions adopted by the Legal Opinion
                 Committee of the Corporate and Banking Law Section of the State
                 Bar of Georgia, which Interpretive Standards are incorporated
                 in this opinion letter by this reference; in particular,
                 without limiting the generality of the foregoing, our opinion
                 is subject to the exceptions stated in paragraph 23(i) of the
                 Interpretive Standards, which makes exception for the effect of
                 bankruptcy and similar laws as described therein.

         E.      The opinion set forth herein is based solely upon the GBCC. 
                 Nothing herein should be construed to express any opinion as to
                 the applicability or effect of any other law, be it a law of
                 any jurisdiction other than Georgia or a law of Georgia other
                 than the GBCC.

         F.      The opinion expressed herein is addressed exclusively to the
                 particular matters described herein, to the state of our
                 knowledge with respect thereto, to the state of all relevant
                 documents, including but not limited to ART's
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HOLT NEY ZATCOFF & WASSERMAN, LLP

American Realty Trust, Inc.
Andrews & Kurth L.L.P.
April 6, 1998
Page 4

                 Articles of Incorporation (as amended to the date hereof), and
                 to the state of the law applicable thereto, all as of the date
                 hereof. We assume no responsibility for commenting on any other
                 matters, or for updating this letter as of any subsequent date.

         G.      This opinion letter is being provided solely for the benefit of
                 its addressees, and no other person, natural or legal, shall be
                 entitled to rely hereon without the express written consent of
                 this firm. This opinion letter may not be referred to or quoted
                 from, in whole or in part, in any financial statement or other
                 document, nor may this opinion letter be filed with or
                 furnished to any person, natural or legal, other than its
                 addressees, including but not limited to any governmental
                 agency, in each case unless the prior written consent of this
                 firm has been obtained. Our consent is hereby given to the use
                 and filing of this opinion letter as an exhibit to ART's
                 Registration Statement on Form S-8 in respect of the
                 Registration, but in giving such consent we do not imply or
                 admit that we are an expert (within the meaning of the
                 Securities Act of 1933, as amended, or the rules and
                 regulations promulgated thereunder) with respect to any part of
                 such Registration Statement.

                                          Yours very truly,

                                          HOLT NEY ZATCOFF & WASSERMAN, LLP

                                          By       Michael G. Wasserman, P.C.

                                                   By:  /s/ MICHAEL G. WASSERMAN
                                                        -----------------------
                                                        Michael G. Wasserman