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A landmark homeowners’ association (“HOA”) reform bill is heading to the Governor’s desk for signature after the Georgia House and Senate passed SB 406. Known as the Georgia Property Owners’ Bill of Rights Act (“the Act”), the Act provides guidelines and new protections for homeowners while enhancing transparency and increasing accountability for HOAs throughout the state.
Annual Registration and Recordkeeping Requirements
Among the Act’s key regulatory requirements is a mandate that HOAs register annually with the Georgia Secretary of State’s Office. Consequently, failure to register prohibits HOAs from instituting enforcement actions, including collecting fines, issuing liens, and initiating foreclosure proceedings. When registering, HOAs are required to submit their governing documents and financial information from the past year. Further, registered HOAs are required to maintain “all records…relating to any assessments, fines, fees, liens, and foreclosures” for at least ten years.
Changes to Foreclosure Thresholds and Payment Application
Additionally, while the current minimum delinquency required to initiate foreclosure proceedings is $2,000, the Act doubles that amount to $4,000, and that amount can consist only of unpaid assessments. Further, the Act promotes transparency by outlining how HOAs must prioritize the application of payments by homeowners. Specifically, payments are to be applied to regular dues first, and once those are current, payments are applied to any outstanding special assessments, which are imposed on homeowners for costs not included in the HOA’s regular budget. Payments are then applied to specific assessments, which include assessments imposed on a homeowner for costs incurred by the HOA to repair or remediate damage caused by that owner, as well as fees or fines for nonpayment, insufficient payment, or untimely payment of any assessment, or for violation of a covenant, followed by any other outstanding fees or fines.
New Administrative Dispute Resolution Process
Finally, and perhaps most importantly, the Act creates an administrative process to settle disputes between HOAs and homeowners. While homeowners typically challenge HOAs in court, the Act provides that homeowners may file complaints with the Georgia Secretary of State’s Office. Complaints filed with the Georgia Secretary of State’s Office are then heard by an appointed hearing officer, with the possibility of court review on appeal. Accordingly, we expect to see a significant decline in the number of HOA dispute cases filed with the courts.
In sum, the Act’s purpose is to ensure that no Georgia homeowners are subjected to fees, fines, or the threat of foreclosure without proper oversight and due process. Once Brian Kemp signs the Act into law, it will take effect on January 1, 2027.
For Questions About Compliance or Impact
For more information about how the Georgia Property Owners’ Bill of Rights Act may impact your organization, contact Chartwell Law. Our team is available to answer your questions and provide guidance on compliance and risk management moving forward.
