Georgia HOA 101
A Homeowners’ Association (HOA) is a collective group of homeowners who volunteer their time to serve and oversee a neighborhood. They are responsible for maintaining common areas such as parks, playgrounds, roofs, fences, pools, lakes, landscaping, mowing grass and/or plowing snow. In some cases, the HOA also collects monthly fees to pay for maintenance and repairs.
In Georgia HOAs may or may not be incorporated associations. See O.C.G.A. § 44-3-220(a)(1). The Articles of Incorporation of a nonprofit corporation consisting of owners of property in a residential subdivision must contain the legal name of the corporation which must be the name of the subdivision set out in the covenants. O.C.G.A. § 44-3-228.
Some associations are organized as managers’ associations. As associations, managers also have the ability to manage common areas for the benefit of members within the community. O.C.G.A. § 44-3-221(b)(1); O.C.G.A. § 44-3-221(c)(1)(A)-(K). See also, O.C.G.A. § 44-3-229(a) and O.C.G.A. § 44-3-229.1 .
Georgia law allows homeowners and HOAs to create a legal entity to collect assessments and enforce covenants and restrictions (CC&R’s) to maintain and develop property. The purpose of an HOA is to protect the interests of colories in the subdivision in terms of property values, maintenance, and other amenities. See Luzhnaya v. Glenwood Pkw. Homeowners’ Association, Inc., 292 Ga. App. 361, 364, 665 S.E.2d 438, 441 (2008).
Every unit or lot owner is a member of the HOA and the governing documents can allow for one vote per lot for certain issues that can pertain to the rights and obligations of property owners. See O.C.G.A. § 44-3-222(a)(1). If HOA is incorporated then it usually has legal obligations under corporate law. See O.C.G.A. § 44-3-220(a)(2).
In Georgia, the manager of the association may use collection companies, accounting, or bookkeeping services that are of the industry standards for unit owners and associations for the collection of assessments, to handle finances, verify and maintain accounts, etc. O.C.G.A. § 44-3-221(b)(2)
Key Georgia HOA Law
Several specific state laws govern HOAs in Georgia, a number of which can be found in the Georgia Property Owners’ Association Act. For example, this act regulates the collection and allocation of assessments, maintenance and upkeep of common areas, and the procedures for governance and dispute resolutions.
The Georgia Nonprofit Corporation Code (OCGA Section 14-3-1 et seq.) also governs HOAs. The Nonprofit Corporation Code sets out rules for corporate governance, addressing concerns such as fiduciary duties of board members, notification requirements, and proxies. It also outlines the rules for civil actions, when homeowners, HOA members, and board members can file suit against their association or each other, as well as the powers associations and boards have to settle disputes.
The Georgia Condominium Act is another source of authority for HOAs, regulating condominiums under the Georgia Condominium Act – OCGA § 44-3-70 – 44-4-140. This act also provides additional protection for condominium residents who need to take legal action against their associations, including limitations on liability for damages and loss of property if the HOA or developer files for bankruptcy. These protections extend to owners of both residential and commercial units in a condominium community.
HOAs that are created or governed by a Master Deed may gain additional obligations under the Georgia Uniformity of Deed Restrictions for Residential Subdivisions Act (OCGA §§ 44-3-220 – 228). This act defines residential subdivision lands, sets out guidelines for easements, restrictions or limitations on the use or occupancy of land registered on a plat, and provides home buyers with access to such restrictions.
HOA members must also be aware of HOAs governed by the Georgia Residential Mortgage Act. This law requires that financial institutions to whom an HOA sells a fee simple interest in real property has certain obligations related to the resale of that interest. Specifically, the association must have overhead assessments up to date to facilitate the transfer of the unit, or the management company must provide a notice of the sale to the HOA on behalf of the lender.
Rights for Georgia Homeowners
Each day, homeowners across Georgia in homeowners’ associations (HOAs) prepares for their community meetings; whether that be a caucus to nominate committee members, a meeting with prospective buyers to review disclosures, or an annual meeting to elect board of directors. Yet too frequently, members in a community association will remain in the dark about their rights. In this section, we’ll review the voting rights of owners in HOAs, the right to access records, and other limited rights under Georgia law.
Georgia HOAs are governed by three primary statutes: the Georgia Nonprofit Corporation Code (NCC), the Georgia Condominium Act (GCA) (if applicable), and the Georgia Property Owners’ Association Act (POA). While these acts are not specific to any particular shorthand or acronym, it is common (and sometimes practical) to refer to them collectively as the "Georgia HOA Laws." The NCC is the primary source of law governing Georgia HOAs and will provide the most detail on issues not covered in the GCA or the POA – namely, the voting rights of owners and owner access to association records.
Voting
Georgia HOAs are governed by their declarations and bylaws, which will often expand on owners voting rights governed by Georgia law. In short, all votes will be counted per a fair allocation, which is usually one vote per unit owner. In HOAs governed by the NCC, any "matter" (an item that is voted on) must be approved by a majority of a quorum, unless the declaration provides a higher threshold. Proxies can be used to achieve the appropriate quorum. Each member is entitled to one vote on each matter submitted to a vote except as limited in the declaration or bylaws.
In condominiums governed by the GCA, each unit owner is entitled to one vote. In general, each vote will equally affect the members, regardless of differences in the allocations.
Access to Books and Records
Georgia law generally provides that owners in communities governed by the NCC must be provided with a copy of the bylaws and annual report or balance sheet (without charge if provided by ordinary mail or electronic transmission). Owners may inspect and copy the association’s books and records, which may include minutes of board meetings, accounting records, member lists, and other items relevant to the governance of the association. Owners may also bring a legal action to recover damages from or enjoin any violation of the NCC’s provisions on record access.
If the GCA applies, the condominium’s board must provide owners with a copy of the bylaws, rules and regulations, and a list of members and their addresses upon request. Unit owners may examine the records of the board at reasonable times during regular business hours after a written notice of the desire to inspect and copy the records has been given to the secretary or president.
The POA provides no additional requirements for record requests, but the board must make the declarations and bylaws available to owners and prospective purchasers upon request.
Typical Georgia HOA Rules
Aside from the Georgia property owners’ association law, much of the authority of an association will derive from the covenants that are applicable to a subdivision of homes. The covenants, which are generally recorded with the deeds to the property and change only by agreement of a specific percentage of the property owners (different communities may require a different percentage in order to change the covenants), are created by the owners of the property and/or developers at an early stage of development and apply to that entire community. Typically the covenants will contain architectural and maintenance guidelines, as well as esthetic and general use issues such as fencing, vision and access easements, and use of vehicles, motorcycles, boats, and trailers. The covenants in any given community will vary and can be very detailed and complex. Some of the typical issues that will be addressed include:
These covenants as well as the Georgia law are enforced by the board of directors of the association, whose duties and responsibilities are set forth in the covenants and sections of the Georgia code. In addition to your covenant restrictions, it is highly advisable for communities to adopt rules and regulations that address routine issues and other concerns outside the scope of the covenants.
Dealing with Georgia HOA Conflicts
Since homeowners’ associations (HOAs) are, in many instances, non-profit organizations run by volunteers and homeowners, the most common disputes relate to the interpretation of bylaws or covenants. There may be disputes regarding voting rights, authorization and levying of assessments, and other issues that, over time, reveal a good deal of friction. Homeowners may feel that their "rights" are being violated or that the association holds their pro forma "fee" assessment against them.
While there are some disputes that could lead to litigation, it is probably better to handle settlement of disputes through established channels within the association. In addition to there often being no "fee" to an attorney to represent the homeowner within the association , it is usually in the best interest of both parties to settle disputes amicably.
Once a dispute does require legal action, however, it is important to realize that the Georgia Legislature has provided specific remedies. First, the law allows for the appointment of a receiver by the court to run the association. Second, in the event a judge does not appoint a receiver, that same law provides for the appointment of a "mediator," the costs of which shall be borne equally by the parties. In either case, it is a good idea to speak to an attorney well versed in HOA law to become familiar with the specific remedies under the law.
Recent Changes in Georgia HOA Law
Georgia legislators passed significant changes to residential property owner association law during the 2018 Legislative Session. These changes impact generally the lien priority for Georgia residential property owners associations, and clarifying certain procedures when conducting foreclosures under Power of Sale, as well as the obligation to maintain swimming pools and provide notice to owners for transfer of the property.
Georgia SB 220 makes changes to both the "Super Lien" and "Liens of Common Interest Communities" statutes. The bill was signed into law by Governor Deal on May 7, 2018, and became effective as law on July 1, 2018.
• SB 220 clarifies that the super lien for community associations is in addition to the security deeds and judgments which shall appear earlier by recordation.
• SB 220 also clarified that the super lien may not exceed a six month period, regardless of whether the assessment installment period is half month or otherwise.
• Whereas the super lien was before considered part of the amount that may be recovered through the Power of Sale foreclosure process, SB 220 now specifically authorizes that the amount of the super lien may be recovered through the Power of Sale foreclosure process, notwithstanding the provisions of O.C.G.A. § 44-3-101.
Georgia SB 318 clarifies the procedures for residential property owner associations to conduct foreclosures under Power of Sale, including providing notice to the owner, using a "notice of sale" form prepared by the State Bar of Georgia, and the person or firm conducting the foreclosure must be a member of the State Bar of Georgia.
Georgia HB 569 amends O.C.G.A. § 44-3-223(2) to require that if a property owner association has designated an "authorized party" to allow entry or access for maintenance for their homeowners pool, the authorized party is not required to provide the home address of the property owner or residents.
Georgia HB 863 provides that if a developer conveys all the lots in a subdivision, the developer must give each owner a notice that informs the owner of the county’s onsite search and rescue requirements for residential swimming pools.
How to Pick the Right Georgia HOA
When looking to join a neighborhood that is part of a Homeowners Association (HOA) in Georgia, there are various factors potential homeowners should consider. Reviewing the association’s rules and restrictions can provide insights into how comfortable one may feel in the community. Rules often cover aspects such as exterior paint colors, landscaping, noise levels , and parking. A thorough assessment of these guidelines is key to determining if they align with the prospective homeowner’s habits and lifestyle. The financial health of an HOA is equally important to review. Understanding whether the HOA has a budget and has considered expenditures in the near future can tell the prospective homeowner a lot about the stability of the association. An HOA that has not planned for the future can lead to assessments or increases that put undue financial stress on its residents. Finally, a potential homeowner should know their neighbors before considering buying in a planned community. Researching the reputation of the HOA and its board, as well as speaking with existing homeowners, can be good avenues for gaining information that can help determine the suitability of the HOA.