Homeowners associations (HOAs) establish concrete rules and expectations for owners who live in the community.
While owners don’t always agree with all of the rules, most can appreciate that they help to maintain property values (which means homes can be sold for a higher price). When creating or amending bylaws and rules, HOAs rightfully turn to state and municipal laws first to ensure the association’s rules don’t contradict existing laws.
Table of contents
- What is the Georgia Property Owners’ Association Act?
- Is my community an HOA or POA?
- How does a Georgia community opt in?
- Why would a Georgia HOA agree to follow the POAA?
- What happens if a Georgia association submits to the POAA?
- Do other states have property owners’ associations acts?
In many places, HOAs can also refer to an Act or set of bills designed for community associations. The Davis-Stirling Common Interest Development Act and Florida Homeowners’ Association Act are two such examples.
Interestingly, there is no mandatory Act for HOAs in Georgia to follow, but an optional Property Owners’ Association Act exists if HOAs want to take advantage of it.
What is the Georgia Property Owners’ Association Act?
The Georgia Property Owners’ Association Act (POAA) is a Georgia law, adopted in 1994, specifically for homeowners associations.
The POAA was created to define the power and authority of property owner/homeowner associations, similar to laws governing condominium associations.
The primary purpose of the POAA is to strengthen HOA collection powers.
Unlike other acts that help governed communities, the Property Owners’ Association Act is a voluntary law. That means it only applies to communities that “opt in.”
Is my community an HOA or POA?
The easiest way to answer that question is to check your governing documents. They determine the status of the association. In most cases, the choice is made by the developer who records the initial covenants and bylaws.
How does a Georgia community opt in?
There are two ways for communities to opt in to and enforce the POAA.
- The developer designated the development as a POA.
- The association amends the existing declaration. Many covenants and/or bylaws require a majority or 2/3 vote of the membership to pass any amendment. If that is the case, an attorney-drafted POA amendment must be provided to each owner before they vote. However, some documents will allow just the board of directors to decide to subject the association to the POAA.
After the association has collected the proper number of votes to adopt a POA amendment, the officers sign the amendment. Then, it is filed with the county land records for a fee.
Why would a Georgia HOA agree to follow the POAA?
Boards and property managers would be most interested in opting into the POAA. That’s because it provides them with clear rules for the association to follow, and concrete powers to use for assessing and collecting fines.
In short, the POAA helps HOAs enforce standardized processes for governing their communities. Below is a list of the specific actions HOAs can take when they agree to follow the Georgia POAA.
Ability to issue fines and suspensions
The POAA grants associations a statutory power to assess fines against owners who break association rules. Common area use rights may also be suspended provided that the association’s ability to fine and suspend rights are expressly stated in the declaration of covenants.
Ability to charge late fees and interest
Submission to the POAA allows an association to charge a late fee of $10 or 10% of the amount due, whichever is more, and interest at a rate of 10% per annum on unpaid assessments and other charges.
Increased collection authority
The POAA authorizes associations to recover costs that were incurred while attempting to collect delinquent assessments, including court costs and reasonable attorneys’ fees. Keep in mind that all of these stipulations should be included in the association’s governing documents. Without including specific language in the governing documents, some courts may reduce the attorneys’ fees awarded to the association, thereby leaving the HOA with unexpected fees to pay.
Joint and several liability to pay assessments
The POAA provides that, unless the declaration of covenants states otherwise, the buyer of a lot is jointly and severally liable with the seller for unpaid assessments. While it wouldn’t be a popular law with new owners, it does ensure the HOA gets the money it is owed.
Automatic filing of statutory liens
HOAs that have agreed to follow the POAA are not required to file paper liens at the county courthouse for unpaid assessments. Instead, the POAA creates an automatic statutory lien against a delinquent owner’s lot.
Additionally, the POAA ensures the HOA is a secured creditor in the event the owner declares bankruptcy, which means the HOA has the right to be paid back through any bankruptcy repayment plan.
Judicial foreclosure authorization
The POAA allows associations to judicially foreclose on liens for assessments or other charges over $2,000. This means an association has the right to obtain an order from the court allowing it to foreclose on a lien even if a superior lien has not been paid off.
The buyer at the foreclosure sale must work out payment with any superior lienholders or assume the superior obligations.
Improved tenant compliance
The POAA specifies that owners and tenants must comply with CC&Rs, bylaws, and rules and regulations.
Enforceable amendments
Under Georgia law, HOAs that are not submitted to the POAA are prohibited from imposing greater restrictions on the use or development of the association, like leasing restrictions, without each owner’s written approval.
Essentially, that means if an owner doesn’t agree to an amendment, then they don’t have to follow it.
However, if an HOA has submitted to the POAA, it does not have to get approval from each member. Instead, all owners in the community are bound by any amendment that has received 2/3 of member approval, or whatever number is required as dictated by the HOA’s bylaws. Recent leasing restriction amendments have persuaded more HOAs to adopt the POAA.
No expiry date
Prior to 1993, Georgia law generally provided that covenants expired after 20 years. But in 1994, the law was amended so that covenants would renew automatically. While Georgia courts confirm that covenants in communities recorded prior to 1994 do not receive the benefit of the 1994 law, the POAA overrides that rule.
What happens if a Georgia association submits to the POAA?
Owners should be informed if an HOA agrees to follow the POAA. The board or manager should distribute written notice of the change. It may be delivered through mail, emailed to owners, and posted on the HOA website if one exists.
The notice should include information about what this change means to owners (and residents). Emphasize the fact that owners will benefit from belonging to a community that can enforce rules more effectively.
Share the full Act with owners as well so they can read it all. Don’t forget to designate a person who can answer questions that owners and residents may have regarding the POAA.
Do other states have property owners’ associations acts?
Yes, Virginia has a property owners’ association act as well. This Act, listed under Title 55.1, Chapter 18 (§§ 55.1-1800 through 55.1-1836) of the Code of Virginia, applies to “all developments subject to a declaration initially recorded after January 1, 1959, associations incorporated or otherwise organized after such date, and all subdivisions created under the Subdivided Land Sales Act (§ 55.1-2300 et seq.).”
Virginia’s POAA came into effect in 2019, and covers three main categories: general provisions, disclosure requirements; authorized fees, and operation and management of association. However, the second category was repealed and replaced by a new Act which came into effect in 2023.
Unlike Georgia, HOAs in Virginia do not have a choice about whether or not they want to follow the Act.
Conclusion
Georgia’s property owners’ association act is unique in that HOAs have the option to opt in. While the additional rules might not appeal to everyone, associations generally operate better when there is a legally binding set of rules available for them to follow.
