Document:

Exhibit 10.20.3
                           CONSTRUCTION LOAN AGREEMENT

         This Agreement is dated as of June 28, 2001 by and between ROBERTS
PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership ("Borrower"), having
its address at 8010 Roswell Road, Suite 120, Atlanta, Georgia 30350, Attention:
Chief Financial Officer, and BANK OF NORTH GEORGIA, ("Bank") having an address
at 8025 Westside Parkway, Alpharetta, Georgia 30004;

         In consideration of the Loan described below and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, Bank
and Borrower agree as follows:

         1. Definitions and Reference Terms. In addition to any other terms
defined herein, the following terms shall have the meanings set forth with
respect thereto:

                  (a) Agent to Request Disbursements: Charles S. Roberts or
Charles R. Elliott

                  (b) Architect: Lyman Davidson Dooley, Inc.

                  (c) Budget: The budget attached hereto as Exhibit A setting
forth in detail all direct and indirect costs for the construction of the
Improvements.

                  (d) Completion Date: February 28, 2002.

                  (e) Construction Commitment: The agreement between Borrower
and Bank dated June 21, 2001, and attached hereto as Exhibit B, the terms of
which are incorporated herein.

                  (f) Contractor: Roberts Properties Construction, Inc.

                  (g) Guarantor: Not applicable.

                  (h) Guaranty: Not applicable.

                  (i) Hazardous Materials: All materials defined as hazardous
wastes or substances under any local, state or federal environmental laws, rules
or regulations, and petroleum, petroleum products, oil and asbestos.

                  (j) Improvements: The buildings and other improvements
constructed or to be constructed on the Land, generally including the following:
37,864 square foot office building fronting on Northridge Parkway, Atlanta,
Fulton County, Georgia, with associated site work.

                  (k) Inspecting Agent: USA Inspection Services, LLC

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                  (l) Land: The land located at Land Lots 25 and 26 in the 17th
District, Fulton County, Georgia as more particularly described in the Mortgage
and any additional property which may become subject to the Mortgage.

                  (m) Loan: The loan in the principal amount of up to
$5,280,000.00 for the financing and construction of the Premises in accordance
with this Agreement.

                  (n) Loan Documents: This Agreement and the Construction
Commitment (and all items and documents required therein), the Note, the
Mortgage, and all other instruments, documents and agreements required by Bank
which evidence, secure or otherwise relate to the Loan including, without
limitation, any guaranties, financing statements, assignments of lessor's
interest in leases, rents and profits, and assignments of construction
documents, together with any amendments, renewals, and extensions thereof, all
of which are incorporated herein by reference and made a part hereof. References
herein to the Loan Documents shall include all such documents, instruments and
other agreements collectively, except that any such reference shall mean the
appropriate individual document, instrument or agreement if the context shall so
require.

                  (o) Mortgage: The first lien mortgage, deed of trust, or deed
to secure debt and security agreement securing the Note and the performance of
Borrower's obligations with respect to the Loan, and all amendments, renewals
and extensions thereof.

                  (p) Note: The promissory note or notes and other instruments,
documents or agreements evidencing Borrower's indebtedness for the Loan, and all
amendments, renewals and extensions thereof.

                  (q) Obligors: The Borrower and all other makers, co-makers,
endorsers, guarantors and others obligated, primarily or secondarily, for the
payment of the indebtedness evidenced by the Note or performance of Borrower's
obligations under the Loan Documents (including, without limitation, all general
partners of Borrower if Borrower, is a partnership), collectively.

                  (r) Plans: The plans and specifications entitled "Roberts
Properties, Inc. Corporate Headquarters, Fulton County" prepared by Lyman
Davidson Dooley, Inc. last revised January 31, 2001 and all amendments thereto
approved by Bank.

                  (s) Premises. The Land and the Improvements,

         2. Loan. Subject to the terms and conditions of this Agreement and the
Loan Documents, Bank agrees to lend to Borrower (in periodic disbursements) up
to the principal sum set forth in Section 1 (m) hereof. The Loan shall bear
interest at the rate or rates set forth in the Note and shall be evidenced
thereby and secured by the Mortgage and other Loan Documents.

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         3. Representations and Warranties of Borrower. As an inducement to Bank
to enter into this Agreement and to make the Loan, Borrower represents and
warrants to Bank as follows:

                  (a) Borrower Organization. Borrower is duly organized and
existing in good standing under the laws of the state of its organization and is
duly qualified in the state where the Land is located to own, construct and
operate the Improvements. Borrower has the authority and the legal right to
carry on the business now being conducted by it and to engage in the
transactions contemplated by the Loan Documents.

                  (b) Binding Documents. The Loan Documents are legal, valid and
binding in accordance with their terms and have been duly authorized, executed
and delivered.

                  (c) Legal and Environmental Compliance. The Plans for the
Improvements and the anticipated use of the Premises and all easements and
rights appurtenant thereto comply with all applicable restrictive covenants,
zoning ordinances, building laws and codes, and other laws, regulations and
governmental requirements, including but not limited to those regarding
environmental matters and access and facilities for persons with disabilities.
All permits and approvals necessary to continue work on the Premises, including-
without limitation all building and site work permits, have been obtained by
Borrower.

         During Borrower's ownership of the Premises and to the best of
Borrower's knowledge prior thereto, the Premises have not been used in violation
of any federal laws, rules or ordinances for environmental protection,
regulations of the Environmental Protection Agency and any applicable local or
state law, rule, regulation or rule of common law and any judicial
interpretation thereof relating primarily to the environment or Hazardous
Materials. Borrower will not use or permit any other party to use any Hazardous
Materials on the Premises except such materials as are incidental to Borrower's
normal course of business, maintenance and repairs and which are handled in
compliance with all applicable environmental laws.

                  (d) Utilities Availability. All utility services necessary for
the construction and full utilization of the Premises for their intended
purposes are presently available at the boundaries of the Land through public or
unencumbered private easements or rights of way and are available for connection
to the Improvements at ordinary costs.

                  (e) Access to the Premises. Access necessary for the
construction and full utilization of the Premises for their intended purposes is
presently available to the Premises over private easement areas and/or streets
or roads which have been dedicated to public use and accepted therefor by
appropriate governmental authorities and any permits necessary for connecting
the driveways on the Premises to such streets or roads will be obtained if
necessary.

                  (f) Financial Statements. Each financial statement delivered
to Bank in connection with the Loan is true and correct in all material
respects, has been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly

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represents the financial condition of its subject, and no material, adverse
change has occurred in the financial condition of its subject since the date
thereof.

                  (g) Litigation. There is no litigation against Borrower
wherein the claim against Borrower exceeds the sum of $50,000.00 pending or, to
the knowledge of Borrower, threatened before any court or governmental
authority, agency or arbitration authority, except as set forth in Exhibit C
attached hereto.

                  (h) Leases. All leases delivered to Bank purporting to cover
any of the Premises are in full force and effect and have not been modified or
terminated.

                  (i) Reaffirmations. Each request for a Loan disbursement under
this Agreement shall constitute an affirmation that the representations and
warranties of this Section 3 are true and correct on the date of each request
and on the date of its disbursement.

         4. Covenants of Borrower. Borrower covenants and agrees with Bank as
follows:

                  (a) Progress of Work; Lien Free Completion. Borrower has
commenced construction and will continually prosecute the work and substantially
complete the building shell of the Premises on or before the Completion Date,
all in substantial conformity with the approved Plans and the Budget and in
compliance with all legal requirements and restrictions. Borrower will not
permit cessation of work on the Premises for a period in excess of fifteen (15)
business days (whether or not consecutive, but excluding federal holidays and
days on which work cannot be performed because of inclement weather) without
Bank's prior written consent. Borrower will, within fifteen (15) days after
Borrower obtains knowledge thereof, correct any material defect in the
Improvements, any material departure from Plans, legal requirements or good
construction practices, and any encroachment by the Improvements on any property
line, set-back line, easement or other restricted area. Borrower will keep the
Premises free at all times from all liens for services, labor, materials or
indebtedness (other than the Loan and the liens securing the Loan).

                  (b) Plans, Contracts and Budget Approval; Assignment of
Contracts. Borrower will submit Borrower's contract with Contractor for
construction and other services to the Premises, the Plans, the Budget, surveys
of the Land, and all other items required by the Loan Documents to Bank for its
approval, and Bank shall have no obligation to make any disbursement hereunder
until it has approved those items, which consent shall not be unreasonably
withheld. Borrower agrees that the approved construction contract will not be
terminated and that it and the Plans and Budget will not be modified or
otherwise changed, in whole or in part, without the prior written consent of
Bank, which approval shall not be unreasonably withheld. (Provided, however,
Borrower may make changes to the Plans without Bank's consent as long as the
aggregate amount of such changes constitutes an increase in the cost of the
improvements and does not exceed 4% of the principal amount of the Loan).
Borrower further agrees to perform all of its obligations under the approved
construction contracts in a timely manner, Borrower hereby assigns to Bank

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and grants Bank a security interest in all Borrower's rights and interests, but
not the obligations, in and to the Plans and all construction and architectural
contracts related to the Premises.

                  (c) Insurance. Borrower will obtain and maintain (or will
cause to be obtained and maintained) such insurance as Bank may reasonably
require, including, but not limited to, lender's title insurance, builder's risk
insurance, permanent hazard insurance, public liability insurance, worker's
compensation insurance and business interruption or rent loss insurance
(consequential loss insurance). Insurance coverages shall be in such amounts and
on such terms as may be reasonably required by Bank, shall name Bank as an
insured or a mortgagee as required by Bank, shall be issued by companies
acceptable to Bank, and shall be kept in full force and effect. Borrower will
promptly deliver satisfactory evidence of such insurance and renewals thereof to
Bank prior to the first disbursement hereunder, together with evidence of
premium payments.

                  (d) Foundation Survey. Upon the completion of the construction
of each foundation of the Improvements, Borrower will promptly provide to Bank a
foundation survey showing the location of the foundation relative to the
boundaries of the land, any set-back lines, easements and other restricted
areas.

                  (e) Title Instruments. Borrower will submit all Proposed
easements, permits, licenses and other instruments, which would or may
materially affect title to the Premises to Bank for approval prior to the
execution thereof by Borrower.

                  (f) Consent to Leases. [Intentionally deleted.]

                  (g) Use of Proceeds. Borrower will hold in trust and use the
proceeds of the Loan solely for the purpose of paying for the costs of
construction of the Improvements in accordance with the Plans and the Budget and
as set forth in the requests for disbursements required by Term 5 hereof and for
such other purposes associated therewith as Bank shall have specifically
approved in writing.

                  (h) Sufficient Funding; Borrower's Equity Investment
Obligation. If the undisbursed portion of the Loan and sums deposited by
Borrower with Bank hereunder are at any time insufficient, in Bank's
commercially reasonable judgment, to fully complete the Improvements in
accordance with the Plans and to pay all other sums under the Loan Documents
when due, Borrower will within seven (7) days after written notice thereof from
Bank, deposit with Bank such sums of money in cash as Bank may require to remedy
such condition and to pay any liens for services and materials alleged to be due
and payable at that time. At Bank's option, no further disbursements of Loan
proceeds shall be made until Borrower has fully complied with this requirement.
All deposited sums shall stand as additional security for Borrower's obligations
under this Agreement and may be disbursed, at Bank's option, before any further
Loan disbursements.

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                  (i) Environmental Inspections, Inspection of Improvements.
Borrower agrees to permit Bank, its agents, contractors and employees to enter
and inspect the Premises at any reasonable time upon three (3) days prior notice
for the purposes of conducting an environmental investigation and audit
(including taking physical samples) to insure that Borrower is complying with
the provisions of Term 3 (c) hereof. Any such environmental investigation and
audit shall be at Bank's cost unless just cause exists for Bank to believe such
an investigation and audit is necessary. Borrower shall provide Bank, its
agents, contractors, employees and representatives with access to and copies of
any and all data and documents relating to or dealing with any Hazardous
Materials used, generated, manufactured, stored or disposed on the Premises
within five (5) days of the request therefore.

         Borrower will permit Bank and its representatives to enter upon the
Premises at any reasonable time upon three (3) days prior notice and to inspect
the Improvements and all materials used in the construction thereof. Bank shall
have the right, in its reasonable judgment, to reject and require Borrower to
replace any material or work which does not comply with the Plans or good
construction practices. It is understood and agreed that Bank's rights under
this Section 4 (i) are solely for Bank's loan administration purposes and do not
impose any duty of care of Bank to Borrower or to any other person or entity.
Bank shall have no liability, obligation or responsibility whatsoever with
respect to the construction of the Improvements except to disburse the Loan
proceeds pursuant to this Agreement. Bank shall not be obligated to cause to be
performed any environmental audit or investigation or inspect the Premises or
the construction of the Improvements. Bank shall not be liable for any defect in
the Premises by reason of inspecting or not inspecting the same. Bank shall not
be liable for the performance or default of Borrower, any architect, engineer,
contractor, construction consultant or any other party, nor for any failure to
construct, complete, protect or insure the Improvements, nor for the payment of
any costs of labor, materials or services supplied for the construction of the
Improvements, nor for the performance of any obligation of Borrower.

                  (j) Notice of Claims and Actions. Borrower shall immediately
advise Bank in writing of any and all enforcement, cleanup, remedial, removal or
other governmental or regulatory actions instituted, completed or threatened
pursuant to any applicable federal, state, or local laws, ordinances or
regulations relating to any Hazardous Materials affecting the Premises or the
use of the Premises; and (ii) all claims made or threatened by any third party
against Borrower relating to damages, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials. Borrower shall
immediately notify Bank of any remedial action taken by Borrower with respect to
the Premises or the use of the Premises.

         Borrower will promptly notify Bank in writing of any litigation or
other proceedings before any court or governmental or administrative authority
which affects the Premises and of any litigation or proceedings against the
Borrower or affecting Borrower's other assets which would, if successful,
materially affect Borrower or such other assets or where the amount exceeds
$50,000.

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                  (k) Books and Records. Borrower will keep and maintain, in
accordance with generally accepted accounting principles consistently applied,
proper and accurate books, records and accounts reflecting all items of income
and expense in connection with the construction, equipping and operation of the
Premises.

         Borrower will make all of the books, records and accounts available to
Bank and its representatives at the corporate offices of Borrower upon request
and will permit them, at any reasonable time upon three (3) days prior notice,
to examine and copy the same. Borrower shall also furnish to Bank such operating
statements for the Premises and financial statements (including, without
limitation, income statements, balance sheets and internal financial reports) of
Borrower and any of the other Obligors as Bank may require from time to time.

                  (l) Management of Borrower. Borrower will promptly notify Bank
in writing of any change in the roster of the executive officers of Borrower as
constituted on the date of this Agreement, and Bank shall be fully authorized to
deal with any present manager, member, officer, partner or director in his or
her present capacity until written notice to the contrary is received by Bank.

                  (m) Notice of Default. Borrower will promptly notify Bank in
writing of any event constituting a default hereunder, and any event which, with
the giving of notice or lapse of time or both, would constitute a default
hereunder, and shall specify the nature of the default or event.

                  (n) Rent Rolls. At Bank's request and if applicable, Borrower
shall deliver to Bank a monthly certified rent roll list with respect to the
Premises within fifteen (15) days of Bank's request.

                  (o) Additional Acts and Agreements. On demand of Bank,
Borrower will do any acts or execute any additional documents required by Bank
to secure the Loan, confirm the lien of the Mortgage or any other lien created
by the Loan Documents, or further carry out the intent and purposes of this
Agreement.

                  (p) Restriction on Secondary Financing and Sale of Premises.
During the term of the Note, the Premises shall remain free and clear of all
encumbrances, liens, mortgages, security interests and secondary financing,
except those approved in writing by Bank. Borrower shall not, without the prior
written consent of Bank, sell, transfer, or convey all or any part of its
interest in the Premises or any portion thereof, except to Roberts Realty
Investors, Inc. or a Permitted Transferee (as hereinafter defined). Any sale,
transfer or conveyance to any person or entity, other than Roberts Realty
Investors, Inc. or an entity whose shares of stock or limited partnership units
are publicly traded, shall be conditioned upon Bank's receipt of an unlimited
personal guaranty of Charles S. Roberts of such transferee's obligations to Bank
pursuant to this Agreement and the Loan Documents. Borrower, or any successor or
assignee of Borrower, shall not, without the prior written consent of Bank,
sell, transfer or convey all or any ownership interest in Borrower, or any
successor or assignee of Borrower. Such restriction shall not apply

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to the sale or transfer of any publicly traded shares of stock or limited
partnership units of Borrower, or any successors or assignee of Borrower. Such
restriction shall further not apply to any sale, transfer or conveyance of any
ownership interest in a Permitted Transferee, provided such sale, transfer or
conveyance does not result in Charles S. Roberts owning less than a fifty-one
(51%) percent controlling interest in such entity. For purposes of this
Agreement, a Permitted Transferee shall be defined as any entity of which
Charles S. Roberts owns at least fifty-one (51%) percent of the ownership
interests.

                  (q) Structural Report. [Intentionally deleted.]

         5.       Disbursements.

                  (a) Disbursement Conditions. Bank shall not be obligated at
any time to disburse any proceeds of the Loan unless the following conditions
have been satisfied:

                           (i) All Loan Documents required by Bank shall have
been delivered to the proper parties and all conditions and requirements set
forth therein shall have been and shall continue to be satisfied, including,
without limitation, all requirements contained in the Construction Commitment.

                           (ii) Borrower has delivered to Bank a final AIA
contract with Contractor for the construction of the Improvements including,
without limitation, all site work.

                           (iii) No default or event which, with the giving of
notice or lapse of time or both, would constitute a default under this Agreement
or any other Loan Document shall have occurred and be continuing.

                           (iv) The Premises shall not have been damaged unless,
in the judgment and opinion of Bank, sufficient insurance proceeds shall have
been received and satisfactory arrangements shall have been made for the repair
of the same.

                           (v) If required in Bank's title insurance policy or
if otherwise required by Bank, Bank shall have received an endorsement to such
policy advancing the effective date of its coverage to the date of the
disbursement, increasing the amount of coverage to include such disbursement,
and indicating no liens, encumbrances, and other matters not previously approved
by Bank. Bank shall have the option of requiring lien releases and/or waivers
from persons furnishing labor, materials and services to the Premises in order
to provide Bank with further assurance that no mechanic's or materialman's liens
or other encumbrances (other than the lien of the Mortgage) affect the Premises.

                           (vi) Borrower shall have paid or invested in the
Premises all amounts required to meet Borrower's equity investment obligation
which is set forth in Section 4 (h) hereof.

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                           (vii) Prior to the final Loan disbursement, with
respect to construction work on the Premises, Borrower shall have satisfied all
requirements of this Agreement and shall have delivered to Bank such
certificates, documents and other evidence of substantial completion of the
Improvements required by the Construction Commitment or as Bank may reasonably
require, including, but not limited to, certificates of occupancy for the
building shell of the Premises, three (3) copies of an as-built final survey,
tenant estoppel letters, subordination and attornment agreements, permanent
hazard insurance and evidence that all sums due for construction costs have been
paid or will be paid out of the final disbursement including, but not limited
to, receipt by Bank of a final Contractor's affidavit and such other information
as is sufficient in the reasonable opinion of Bank's counsel to void any
materialman's or mechanic's liens (inchoate or otherwise) which would affect
title to the Premises.

                           (viii) Disbursements (prior to final disbursement)
allocable to a payment on account of construction work and materials shall not
exceed an amount equal to 95% of the total value of work and materials in place
and completed, less the sum of all payments previously made against construction
work and materials. The total value of work and materials in place and completed
shall be reasonably determined by Bank and shall be binding on Borrower. In no
event shall disbursements for individual items exceed the amounts specified
therefor in the approved Budget, except that any savings with respect to
individual items may be used to offset overages with respect to other individual
items in the approved Budget, provided such transfers or offsets are documented
and disclosed to Bank prior to disbursement. Unless otherwise agreed by Bank,
disbursements shall not be made for materials stored on site or off site.

                  (b) Disbursement Procedures and Requirements. Bank agrees to
make periodic Loan disbursements up to the face amount of the Note pursuant to
the following procedures and requirements:

                           (i) Borrower or Borrower's Agent to Request
Disbursements shall complete, sign and deliver to Bank a written request for
disbursement in a form satisfactory to Bank. Bank may require that such requests
be signed by the Contractor.

                           (ii) Each request for disbursement shall be supported
by such receipts, invoices and supporting documents as may be reasonably
required by Bank.

                           (iii) Each request for disbursement shall be
submitted to Bank at least five (5) business days prior to the date of the
requested disbursement. Unless Bank shall otherwise agree, disbursements shall
not be made more frequently than monthly.

                           (iv) Each request for disbursement shall be inspected
and reported upon to the Bank by the Inspecting Agent prior to funding the draw
request. Borrower will permit the Bank, Inspecting Agent and its representatives
to enter upon the Premises and to inspect all materials used in the construction
thereof. Bank shall have the reasonable right to reject or require

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Borrower to replace any material or work which does not substantially comply
with the Plans or good construction practices. Borrower shall reimburse the Bank
on demand for the costs of any such inspection.

                           (v) If Bank shall so request, Borrower will
immediately deposit all proceeds of the Loan disbursed by Bank into a separate
and exclusive account at Bank's office located at the address set forth above.

                           (vi) Loan disbursements may be made, at the option of
Bank, to one or more of the following: Borrower; Borrower's Agent to Request
Disbursements; or, after an Event of Default, at the Bank's option, to the
Contractor, or to any subcontractor, materialman, or other supplier providing
labor, services or materials in connection with the Improvements. The execution
of this Agreement by Borrower constitutes an irrevocable direction and
authorization for Bank to so disburse the Loan proceeds. Bank may rely on
requests for disbursements made by the Agent to Request Disbursements.

                  (c) Obligation for Further Disbursements. No disbursement made
hereunder shall constitute a waiver of any condition precedent to the obligation
of Bank to make any further disbursement or preclude Bank from thereafter
declaring the failure of Borrower to satisfy such condition precedent to be a
default. At Bank's sole option, any such condition precedent may be waived by
Bank, in whole or in part, at any time. All conditions precedent to Bank's
obligations to make disbursements are imposed solely for the benefit of Bank,
and no other party may require any such condition precedent or be entitled to
assume that Bank will refuse to make any disbursement in the absence of strict
compliance with such condition precedent.

         6.       Defaults and Remedies.

                  (a) Defaults. Borrower shall be in default under this
Agreement and under each of the other Loan Documents if, after notice and the
failure of Borrower to cure within ten (10) days of such notice, Borrower shall
fail to pay any amounts due and owing under the Note, as and when due, or should
Borrower fail to timely and properly observe, keep or perform any term,
covenant, agreement or condition in any of the Loan Documents or in any other
loan agreement, promissory note, security agreement, deed of trust, mortgage,
assignment or other contract securing or evidencing payment of any indebtedness
of Borrower to Bank or any affiliate or subsidiary of Bank of North Georgia and
such failure is not cured within any applicable cure period therefor. For
non-payment matters hereunder, Borrower shall have thirty (30) days following
receipt of notice thereof from Bank before same shall be deemed defaults
hereunder. In the event Borrower's cure of any non-payment matter cannot be
completed or achieved within thirty (30) days of receipt of Bank's notice
thereof, Borrower shall have an additional sixty (60) days to cure same,
provided Borrower, in Bank's reasonable opinion, is diligently pursuing said
cure. Any default under the other Loan Documents which is not cured within any
applicable cure period therefor shall constitute a default hereunder.

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                  (b) Remedies. In the event of any default hereunder,
Bank may, at its option, exercise any or all of the rights, options, privileges,
and remedies provided by this Agreement or by the other Loan Documents
(including, without limitation, the right to accelerate the indebtedness
evidenced by the Note and to commence foreclosure proceedings or a sale under
power of sale) or otherwise available to Bank at law, in equity or under any
other contract. In addition, Bank may, at its option and at the risk, cost and
expense of Borrower: (i) enter upon and take possession of the Premises and the
materials and equipment being used in the construction of the Improvements; (ii)
take such action as Bank shall deem appropriate to protect the Premises; and
(iii) take such action as Bank shall deem appropriate to continue construction
of the Improvements with such changes therein as Bank may elect to make.

                  If Bank shall elect to continue construction, Bank may: (i)
assume or reject any construction or other contracts made by Borrower in
connection with the construction or operation of the Improvements; (ii) engage
or employ contractors, subcontractors, architects, engineers and others for the
construction of the Improvements; (iii) pay, settle or compromise existing or
future bills or claims relating to the construction of the Improvements or the
Premises or affecting title thereto; (iv) and take or refrain from taking such
other action (including, without limitation, discontinuing construction), in its
name or in the name of Borrower, as Bank may determine.

                  All reasonable costs and expenses incurred by Bank in taking
and protecting the Premises and in constructing the Improvements shall be paid
by Borrower to Bank upon demand, with interest at the rate provided in the Note
from the date of disbursement to the date of payment to Bank, and the payment of
such sums shall be secured by the Mortgage and the other Loan Documents, Bank
shall have no obligation to take any of the foregoing actions, and if Bank
should do so, it shall have no liability to Borrower or any other Obligor for
the sufficiency of any such actions or otherwise, except with respect to Bank's
gross negligence or intentional misconduct.

                  (c) Set Off. Bank shall also have a continuing security
interest in, lien on and right of set-off against all property and deposit
accounts belonging to Borrower or any other Obligor which are at or under the
control of Bank.

                  (d) Cumulative Rights and Remedies. All rights, options,
privileges and remedies provided by this Agreement and the other Loan Documents
and otherwise available to Bank at law, in equity or under any other contract
shall be cumulative, and no such right, option, privilege or remedy shall be
deemed to be exclusive or alternative.

         7.       General Conditions.

                  (a) Bank Approvals. All surveys, appraisals, insurance
policies, construction contracts and subcontracts, leases, plans and
specifications, legal opinions, requests for disbursement, and other Loan
Documents and items required for the Loan shall be reasonably satisfactory to
Bank in all material respects.

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                  (b) Costs and Expenses. Borrower will pay when due, and if
paid by Bank reimburse Bank on demand for, all reasonable, out-of-pocket costs
and expenses (including, without limitation, the cost and expense for insurance
premiums, appraisals, surveys, recording documents, environmental assessments,
Bank's construction consultant (if any), title insurance, taxes due on Loan
Documents, and legal counsel for Bank) in connection with the preparation,
administration, modification or enforcement of this Agreement and the other Loan
Documents.

                  (c) No Third Party Beneficiaries. This Agreement is for the
sole protection and benefit of Bank and Borrower, and no other person or entity
shall have any right as a third party beneficiary hereunder or any right to
bring an action hereon or claim the proceeds of the Loan hereunder.

                  (d) No Waiver. No failure on the part of Bank to exercise any
right, option, privilege, or remedy available to Bank shall operate as a waiver
thereof, nor shall any single or partial exercise or waiver of any such right,
option, privilege, or remedy preclude any other or further exercise thereof to
its fullest extent or the exercise of any other right, option, privilege, or
remedy.

                  (e) Notices. Notices, requests, demands and other
communications which any party is required or may desire to give to any other
party under any provision of this Agreement must be in writing and delivered to
the other party (and, in the case of Borrower, to Sanford H. Zatcoff, Esq., 100
Galleria Parkway, Suite 600, Atlanta, Georgia 30339-5911) at the address set
forth in the first paragraph of this Agreement (or to such other address as any
party may designate by written notice to the other party). Each such notice,
request, demand or other communication shall be deemed given or made as follows:
if sent by mail, upon the earlier of the date of receipt or five (5) days after
deposit in the U.S. Mail, first class postage prepaid; if sent by any other
means, upon delivery.

                  (f) Transfer of Rights. Except as set forth in and allowed
under Section 4(p) with respect to the sale of the Premises, Borrower shall not
assign or otherwise transfer this Agreement or the Loan Documents, in whole or
in part, without the prior written consent of Bank. Bank may create and sell
participation interests in the Loan or otherwise assign or transfer this
Agreement and the Loan Documents, in whole or in part, at any time and in the
event of an assignment or transfer by Bank, the term "Bank" shall include any
such assignee or transferee to the extent of the interest assigned or
transferred. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, successors, personal
representatives, and assigns.

                  (g) Indemnification. Borrower shall indemnify, defend and hold
Bank and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs or
other expenses (including reasonable attorneys' fees and court costs) arising
from or in any way related to actual or threatened damage to the environment,
agency costs of investigation, personal injury or death, or property damage, due
to

                                       12
<PAGE>

a release or alleged release of Hazardous Materials on or under the Premises,
or arising from any other condition existing on or under the Premises or from
any business operations conducted thereon resulting from the use or existence of
Hazardous Materials, whether such claim proves to be true or false. Borrower
further agrees that its indemnity obligations shall include, but are not limited
to, liability for damages resulting from the personal injury or death of an
employee of the Borrower, regardless of whether the Borrower has paid the
employee under the worker's compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term "property
damage" as used in this paragraph includes, but is not limited to, damage to any
real or personal property of Borrower, Bank, and of any third parties.
Borrower's obligations under this paragraph shall survive the repayment of the
Loan and any deed in lieu of foreclosure or foreclosure of the Mortgage and/or
any security agreement securing the Loan; provided, however, Borrower shall have
no liability hereunder with respect to Hazardous Materials placed on or under
the Premises following transfer of the Premises by Borrower or any deed in lieu
of foreclosure or foreclosure of the Mortgage.

                  (h) Joint and Several Obligations. If more than one person or
entity is named as Borrower herein, this Agreement shall be binding upon all
such persons and entities, jointly and severally.

                  (i) Severability. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision herein, and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.

                  (j) Advertising. Bank shall have the right to erect no more
than two (2) signs on the Premises advertising its financing of the
Improvements.

                  (k) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia and applicable
United States federal law.

                  (l) Attorneys Fees. In the event it is necessary for Bank to
enforce this Agreement, or any part thereof, by or through an attorney at law,
Borrower agrees to pay all costs of collection including, but not limited to,
attorneys fees incurred by Bank. Notwithstanding anything contained herein or in
the Note to the contrary, if under any circumstances Borrower is required
hereunder to pay any or all of Bank's attorney's fees and expenses, Borrower
shall be responsible for actual legal fees and out of pocket expenses incurred
by Bank at normal hourly rates for the work done. Borrower shall not be liable
under any circumstances for any additional attorney's fees or expenses under
O.C.G.A. ss. 13-1-11 or otherwise, and, to the extent Bank may be permitted to
charge or receive additional attorney's fees or expenses under O.C.G.A. ss.
13-1-11, Bank hereby waives such right.

                                       13

<PAGE>

         8. Exhibits/Additional Provisions. This Agreement includes any
exhibits and attachments referred to herein. The terms of such exhibits and
attachments are made a part hereof, whether actually attached hereto or not. If
any additional provision contained in any such exhibit or attachment is in
conflict with another term or condition of this Agreement, the additional
provision shall control.

         9. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), AND THE RULES OF PRACTICE AND PROCEDURE FOR THE
ARBITRATION OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION
SERVICES, INC. (J.A.M.S.), AND THE `SPECIAL RULES' SET FORTH BELOW. IN THE EVENT
OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,
TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT
APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

                  (A)      SPECIAL RULES. THE ARBITRATION SHALL BE
                           CONDUCTED IN THE CITY OF THE BORROWER'S DOMICILE AT
                           THE TIME OF THIS AGREEMENT'S EXECUTION AND
                           ADMINISTERED BY J.A.M.S. WHICH WILL APPOINT AN
                           ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
                           PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
                           THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
                           ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
                           DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
                           ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
                           PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING
                           FOR UP TO AN ADDITIONAL 60 DAYS.

                  (B)      RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT
                           SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
                           OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE
                           AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II)
                           BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT
                           BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT
                           STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK OR
                           BORROWER HERETO (A) TO EXERCISE SELF HELP REMEDIES
                           SUCH AS (BUT
                                       14

<PAGE>

                           NOT LIMITED TO) SET OFF, OR (B) TO FORECLOSE AGAINST
                           ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO
                           OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
                           SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT
                           OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK
                           OR BORROWER MAY EXERCISE SUCH SELF HELP RIGHTS,
                           FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
                           PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
                           AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
                           BROUGHT PURSUANT TO THIS AGREEMENT. NEITHER THIS
                           EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
                           MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
                           PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A
                           WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
                           CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS
                           OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO
                           SUCH REMEDIES.

         10. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         In Witness Whereof, the parties have duly executed this Agreement under
seal as of the day and year first above written.
                                     "Borrower"

                                     ROBERTS PROPERTIES RESIDENTIAL, L.P.,
                                     a Georgia limited partnership

                                     By: Roberts Realty Investors, Inc.
                                      a Georgia corporation, as General Partner

                                             By: /s/ Charles R. Elliott
                                                 -------------------------------
                                                   Charles R. Elliott,
                                                   Chief Financial Officer and
                                                   Secretary/Treasurer

                                       15
<PAGE>

                                                       [CORPORATE SEAL]

                                     "Bank"

                                     BANK OF NORTH GEORGIA

                                     By: /s/ Allen Barker
                                        ----------------------------------------
                                           Allen Barker, Senior Vice President

                                                       [BANK SEAL]

                                       16Exhibit 10.20.4

                                         After recording return to:
                                         Edwin A. Tate, Esq.
                                         Seacrest,  Karesh, Tate & Bicknese, LLP
                                         56 Perimeter Center East, Suite 450
                                         Atlanta, GA  30346

STATE OF GEORGIA

COUNTY OF DEKALB

                               DEED TO SECURE DEBT

         THIS DEED TO SECURE DEBT, made this the 28th day of June in the Year of
our Lord Two Thousand One, between Roberts Properties Residential, L.P., a
Georgia limited partnership ("Grantor"), and Bank of North Georgia, 8025
Westside Parkway, Alpharetta, Georgia 30004 ("Grantee") of the State of Georgia
and County of Fulton, (the terms Grantor and Grantee to include their respective
heirs, successors and assigns where the context requires or permits),

         WITNESSETH THAT: Grantor, for the consideration hereinafter set forth,
in hand paid at and before the sealing and delivery of these presents, the
receipt and sufficiency of which being hereby acknowledged by Grantor, has
granted, bargained, sold, aliened, conveyed and confirmed, and by these presents
does hereby grant, bargain, sell, alien, convey and confirm unto Grantee, the
following described real property, hereinafter referred to as the "property," to
wit:

                  All that tract or parcel of land lying and being in Land Lots
                  25 and 26 of the 17th District, Fulton County, Georgia, and
                  being more particularly described on Exhibit "A" attached
                  hereto and made a part hereof.

         TO HAVE AND TO HOLD the property with all and singular the rights,
members and appurtenances thereto appertaining to the only proper use, benefit
and behoof of Grantee, in fee simple; and Grantor will warrant and forever
defend the right and title to the property unto Grantee against the claims of
all persons whomsoever, except as to these matters set forth on Exhibit "B"
attached hereto and made a part hereof.

<PAGE>

         This conveyance is made under the existing Code of the State of Georgia
pertaining to conveyances to secure a debt, and is not a mortgage, and upon
payment of the indebtedness secured hereby, this deed shall be canceled and
surrendered pursuant thereto. The indebtedness secured hereby , together with
interest thereon, is evidenced by that certain Promissory Note (hereinafter
referred to as the "Note" and to which Note reference is hereby made for all
purposes) dated of even date herewith, made by Grantor, payable to the order of
Grantee in the principal face amount of Five Million Two Hundred Eighty Thousand
and No/100 ($5,280,000.00) Dollars with the final payment being due on May 28,
2004; together with any and all modifications, renewals and/or extensions of the
indebtedness evidenced by the Note and any and all other indebtedness now due by
Grantor to Grantee or hereafter incurred by Grantor, whether directly or
indirectly as principal, endorser, guarantor or otherwise.

         As further security for the payment of the indebtedness secured hereby,
Grantor hereby sells, assigns, sets over and transfers to Grantee all of the
rent which shall hereafter become due or be paid for the use of the property,
reserving only the right to Grantor to collect the rent so long as there is no
default which is not cured within the applicable cure period in the obligations
of Grantor under this deed or in payment of the indebtedness secured hereby. In
the event of such default, Grantee may enter upon the property and collect the
rent therefrom and Grantee is hereby constituted and appointed as Grantor's
agent and attorney-in-fact to collect such rent by any appropriate proceedings,
and Grantee may direct tenants of the property, as agent for Grantor, to pay
rent to Grantee. Grantee shall be authorized to deduct and pay from rent so
collected, if any, actual costs of collection including actual attorney's fees
plus reasonable real estate commission or fees to a rental or real estate agent
or agents, the net amount of such rent following such deductions, however, to be
applied toward payment, or reimbursement to Grantee for payment, of the
indebtedness secured hereby , the application thereof to be toward portions of
the indebtedness designated by Grantee in Grantee's discretion.

         Grantor hereby covenants, for so long as the indebtedness secured
hereby, or any part thereof, shall remain unpaid, to keep the property in as
good condition as now exists, natural wear and tear excepted, and also not to
demolish, destroy or remove any permanent structure now or hereafter existing
thereon or make any alteration thereto which would constitute a structural
change without the express prior written consent of Grantee provided, however,
the foregoing shall not relate to the construction activities to be performed by
Grantor on the property; to pay all real property ad valorem taxes and
assessments that may be liens upon the property, as they become due; and to keep
the property and improvements thereon insured by an insurance company or
companies acceptable to Grantee against loss by fire or other hazards, plus
general public liability insurance, as may, from time to time, be reasonably
required by Grantee in amounts of no less than shall be designated by Grantee,
with loss, if any, payable to Grantee, and shall deliver copies of the policies
of insurance to Grantee; and that any such tax, assessment or premium of
insurance not paid when due by Grantor, may be paid by Grantee and any amount so
paid shall bear interest from the time of payment at the note rate, and shall,
with such interest, be covered by the security of this deed. Should Grantee
receive any money for damages covered by such insurance, such money shall be
paid over, either in full or in part, in accordance with the disbursement
procedures contained in that certain Construction

                                       2

<PAGE>

Loan Agreement between Grantor and Grantee of even date herewith, to Grantor to
enable Grantor to repair or replace improvements without affecting the lien and
priority of this deed for the full amount secured hereby before such damage or
such payment occurred.

         Time being of the essence of this contract, Grantee, after notice to
Grantor, and failure to cure by Grantor any monetary default under the Note or
this deed within ten (10) days, or any nonmonetary default under the Note or
this deed within thirty (30) days, of such notice, subject to the following
sentence, shall have the right to accelerate the maturity of the indebtedness
secured hereby, by declaring the entire indebtedness to be in default and
immediately due and payable. In the event Borrower's cure of any nonmonetary
default under the Note or this deed cannot be completed or achieved within
thirty (30) days of receipt of Grantee's notice thereof, Grantor shall have an
additional sixty (60) days to cure same, provided Grantor, in Grantee's
reasonable opinion, is diligently pursuing said cure.

         CROSS DEFAULT CLAUSE: Grantor agrees that any default under any note
and failure to cure said default by Grantor shall constitute a default under
this deed as well as under all other deeds to secure debt or security agreements
executed by Grantor in favor of Grantee. Failure of Grantor to pay as when due
and payable any amounts owed by Grantor to Grantee under any note, contract,
obligation, guaranty or account and the failure to observe any term, covenant,
condition or agreement in any other document between Grantor and Grantee in
favor of Grantee shall constitute a default under this deed as well as under all
other deeds to secure debt or security agreements executed by Grantor in favor
of Grantee.

         CROSS COLLATERALIZATION CLAUSE: Grantor agrees that, in the event that
this deed is foreclosed, and the proceeds of such foreclosure exceed the primary
indebtedness secured thereby, the excess proceeds shall be retained by Grantee
and applied to any other outstanding indebtedness secured by any other deed to
secure debt, security deed, or security agreement by Grantor in favor of
Grantee. Grantee shall be entitled to retain all proceeds of any foreclosure
sale until all indebtedness secured by this deed and any other deed to secure
debt, security deed or security agreement by Grantor in favor of Grantee shall
have been paid in full.

         In the event of default in the payment of the indebtedness secured
hereby which is not cured within the applicable cure period therefor, either in
due course or by acceleration as hereby provided, or in the event of default in
the performance of any of the other obligations required of the Grantor by the
terms of this deed which is not cured within the applicable cure period
therefor, Grantee shall be entitled to have a receiver appointed for the
property, in connection with or as part of any proceeding to foreclose this deed
or to enforce any of its terms or the collection of all or any part of the
indebtedness, and Grantor agrees to the appointment of such receiver without
regard to the value of the property or to proof of insolvency or other statutory
grounds, and hereby appoints Grantee as its attorney-in-fact with authority to
consent for Grantor to the appointment of such receiver.

         The title, interest, rights and powers granted herein by Grantor to
Grantee, and in particular the power of sale herein granted, shall inure to the
benefit of any party to whom or to which Grantee

                                       3

<PAGE>

may assign the indebtedness secured hereby or convey the property, as well as to
the heirs, successors, assigns and legal representatives of Grantee.

         In case the indebtedness secured hereby or any part thereof shall not
be paid when it becomes due by maturity or in due course which failure to pay is
not cured within the applicable cure period, or by reason of any other default
as herein provided which is not cured within the applicable cure period
therefor, Grantor hereby grants to Grantee the following irrevocable power of
attorney: to sell all or any part of the property at auction, at the usual place
for conducting sales at the Courthouse in the County where the property or any
part thereof lies, in the State of Georgia, to the highest bidder for cash,
after advertising the time, terms and place of such sale once a week for four
weeks immediately preceding such sale (but without regard to the number of days)
in a newspaper published in the County where the property or any part thereof
lies, or in the paper in which the Sheriff's advertisements for such County are
published, all other notice except as otherwise provided herein, being hereby
waived by Grantor, and Grantee or any person on behalf of Grantee may bid and
purchase at such sale and thereupon execute and deliver to the purchaser or
purchasers at such sale a sufficient conveyance of the property in fee simple,
which conveyance shall contain recitals as to the happenings of the default upon
which the execution of the power of sale herein granted depends, and Grantor
hereby constitutes and appoints Grantee the agent and attorney-in-fact of
Grantor to make such recitals, and hereby covenants and agrees that the recitals
so to be made by Grantee shall be binding and conclusive upon Grantor, and that
the conveyance to be made by Grantee shall be effectual to bar all equity of
redemption of Grantor in and to the property, and Grantee shall collect the
proceeds of such sale, and after reserving therefrom the entire amount of
principal and interest due, together with the amount of any taxes, assessments
and premiums of insurance or other payments theretofore paid by Grantee, with
interest thereon from date of payment at the note rate, together with all costs
and expenses of sale and the actual amount of Grantee's attorney's fees, shall
pay any over-plus to Grantor as provided by law.

         Grantor further covenants that in case of a sale as herein above
provided, Grantor, or any person in possession under Grantor, shall then become
and be tenants holding over and shall forthwith deliver possessions to the
purchaser at such sale, or be summarily dispossessed in accordance with the
provisions of law applicable to tenants holding over.

         Grantor further covenants that it will not place any additional
indebtedness on the property, nor will it allow any inferior deeds to secure
debt to be recorded of record without Grantee's prior written consent, and
breach of the foregoing covenant shall constitute an additional event of
default.

         If all or any part of the property or any interest in it is sold or
transferred, without the prior written consent of Bank, except to Roberts Realty
Investors, Inc. or a Permitted Transferee (as hereinafter defined), Grantor may,
at its option, require immediate payment in full of all sums secured by this
deed. However, this option shall not be exercised by Grantee if exercise is
prohibited by federal law as of the date of this deed. If Grantee exercises this
option, Grantee shall give Grantor notice of acceleration. The notice shall
provide a period of not less than thirty (30) days from the date the notice is
delivered or mailed within which Grantor must pay all sums secured by this deed.

                                       4
<PAGE>

If Grantor fails to pay these sums prior to the expiration of this period,
Grantee may invoke any remedies permitted by this deed without further notice or
demand on Grantor. Any sale, transfer or conveyance to any person or entity,
other than Roberts Realty Investors, Inc. or an entity whose shares of stock or
limited partnership units are publicly traded, shall be conditioned upon
Grantee's receipt of an unlimited personal guaranty of Charles S. Roberts of
such transferee's obligations to Grantee pursuant to the Note and this deed.
Grantor, or any successor or assignee of Grantor, shall not, without the prior
written consent of Grantee, sell, transfer or convey all or any ownership
interest in Grantor, or any successor or assignee of Grantor. Such restriction
shall not apply to the sale or transfer of any publicly traded shares of stock
or limited partnership units of Grantor, or any successors or assignee of
Grantor. Such restriction shall further not apply to any sale, transfer or
conveyance of any ownership interest in a Permitted Transferee, provided such
sale, transfer or conveyance does not result in Charles S. Roberts owning less
than a fifty-one (51%) percent controlling interest in such entity. For purposes
of this Agreement, a Permitted Transferee shall be defined as any entity of
which Charles S. Roberts owns at least fifty-one (51%) percent of the ownership
interests.

         Notwithstanding anything contained herein to the contrary, if under any
circumstances Grantor is required hereunder to pay any or all of Grantee's
attorney's fees and expenses, Grantor shall be responsible for actual legal fees
and out of pocket expenses incurred by Grantee at normal hourly rates for the
work done. Grantor shall not be liable under any circumstances for any
additional attorney's fees or expenses under O.C.G.A. ss. 13-1-11 or otherwise,
and, to the extent Grantee may be permitted to charge or receive additional
attorneys' fees or expenses under O.C.G.A. ss. 13-1-11, Grantee hereby waives
such right.

         The power and agency hereby granted are coupled with an interest and
are irrevocable by death or otherwise and are granted as cumulative to the
remedies for collection of the indebtedness secured hereby as provided by law.

         This deed is to be construed in all respects and enforced according to
the laws of the State of Georgia.

         EXCEPT AS MAY BE OTHERWISE EXPRESSLY STATED HEREIN, THIS DEED IS MADE,
EXECUTED, SEALED AND DELIVERED BY GRANTOR AS A FIRST-IN-PRIORITY DEED TO SECURE
DEBT ON THE PROPERTY. GRANTOR AND GRANTEE AGREE THAT GRANTEE SHALL BE SUBROGATED
TO THE CLAIMS AND LIENS OF ALL PARTIES WHOSE CLAIMS OR LIENS AGAINST THE
PROPERTY ARE DISCHARGED OR PAID WITH THE PROCEEDS OF THE LOAN SECURED HEREBY.

                                       5
<PAGE>

         IN WITNESS WHEREOF, Grantor has caused this instrument to be executed
and sealed as of the day and year first above written.

Signed, sealed and delivered        GRANTOR:
in the presence of:

-------------------------------
Unofficial Witness                   ROBERTS PROPERTIES RESIDENTIAL, L.P.
                                     a Georgia limited partnership

                                     By: Roberts Realty Investors, Inc.,
-------------------------------        a Georgia corporation, as General Partner

Notary Public                            By:  /s/   Charles R. Elliott
My commission expires:                    ----------------------------------
                                          Charles R. Elliott, Chief Financial
This the 28th day of June, 2001.             Officer and Secretary/Treasurer
                                                      [CORPORATE SEAL]

                                       6

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