Georgia Property Owners Association Act: Will It Help Your Association?   12 comments

What is the Georgia Property Owners Association Act (and why should I care)? The Georgia Property Owners Association Act (the “POA Act“) was adopted in 1994 and has undergone some amendments over time. It was intended to expand the powers of homeowners associations and ground those powers in a uniform law.

An Act You Can “Opt In”

However, the POA Act has one major element that many overlook: it is a “permissive” act and one must “opt in” or officially adopt the terms of the POA Act to be governed by it. To be subject to its terms, and any benefits you can get from them, you must affirmatively adopt the terms of the POA Act. This can trick a lot of people, association members and attorneys alike, that are not familiar with the POA Act’s terms.

Because of the POA Act’s terms, it is common for developers to choose not to submit developments to the POA Act during the period in which the developer controls a homeowners association. Many of the terms, especially before the POA Act amendments were adopted in 2007, limited developer flexibility to deal with assessments and other items.

In some cases, the developer will anticipate that lot owners will want to submit the association to the terms of the POA Act. In this case, they include provisions in the declaration of covenants, conditions, and restrictions and in the by-laws for the association that allow for the easy adoption of the POA Act. In some cases they do not, either through a failure to be aware of the POA Act or for other reasons.

If there are no “built in” provisions allowing the association to adopt the POA Act, an association must go through the standard amendment process, as set out in the declaration and by-laws, to adopt the amendments which would bring the association under the terms of the POA Act. This process should not be entered lightly, as if there are any disputes, enforcement actions, or collection actions in the future that proceed based upon authority in the POA Act, the courts will look hard at the way the amendments were adopted. This focus can be so precise as to look at the records of the meeting where the amendment was adopted – Was there proper notice for the meeting? Was there a quorum? Was the amendment worded properly?

So What’s So Great About The POA Act Anyway?

The bottom line is that the POA Act gives the association more “bite” in enforcement actions. If the association has well-drafted documents they probably already have nearly everything the POA Act provides, but it is still only a private agreement. Submitting to the POA Act gives those actions statutory authority for those enforcement actions and can make enforcement easier for the association. In developments with poorly drafted documents, the POA Act can seriously bolster the association’s ability to enforce the existing covenants and restrictions.

Here’s a list of some of the items dealt with in the POA Act:

1. automatic statutory liens – this provision can help overcome minor mistakes in liens;

2. makes both buyers and sellers of a lot liable for assessments – with this provision, you can still try to collect unpaid assessments that previously accrued against either (or both) parties in the sale of a lot;

3. clarifies that tenants are obligated to comply with the covenants;

4. power to fine and suspend privileges to use common areas – in well-drafted documents this right should already exist, but there are many covenants that do not include this necessary and useful right (it’s easier to get paid when someone wants to use the pool!);

5. late fees and interest;

6. recovery of attorney’s fees from owners – this is very helpful as judges are sometimes reluctant to grant the association repayment of their legal fees when collecting assessments;

7. perpetual duration – this is a big benefit, as O.C.G.A. §44-5-60 actually limits the duration of covenants (the statute itself is difficult to interpret, as one must look at the version of the statute in effect at the time the covenant was adopted to see whether it terminates).

What’s the Bottom Line?

The POA Act can be very helpful for associations, although the benefits an association derives can vary from neighborhood to neighborhood depending upon the quality of their original documents and the kinds of enforcement and collection issues the association faces. In essence, the POA Act gives the framework of covenants and restrictions and the powers to enforce them more strength. For example, being subject to the POA Act prior to adopting a leasing restriction may help the association enforce the terms of that leasing restriction.

However, merely attempting to adopt the POA Act is not enough. The association must make sure that it takes the amendment process seriously and gets it rights, otherwise the intended benefits may be lost after a hard look by the courts. It is an issue of enough importance to be worth consulting with an attorney to develop a strategy for adopting the POA Act’s terms.

By: Amy H. Bray, a partner in our Commercial Real Estate Department

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12 responses to “Georgia Property Owners Association Act: Will It Help Your Association?

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  1. One adopted, is there a way to rescind the decision? I have read the act, and see no mention of this.

  2. Does the POA restrict Board of Directors from profiting (i.e hiring their company to perform work for the association) from their position on the board?

    • It sounds like you have a very specific situation in mind. I urge you to look at the existing documents yourself and to consult with an attorney that is knowledgeable in the area of community associations to address your concerns.

  3. If a declaration normally requires 50% votes to adopt amendments, can the POA Act amendment be adopted with 50% votes, or is 2/3 votes needed as stated in the POA act?

  4. Does this law pertain only to HOA communities, or can it also apply to Condo Association communities? I’ve been told, if we qualify, this could help us recoup lost revenue associated with unpaid dues, attorney fee, etc., when a condo is foreclosed on. Thanks.

  5. Great question, Chris. Did you find an answer? Please share if so.

  6. I’ll going to say this as a blanket comment, specifically to the questions above, but also generally for other folks looking to ask specific questions: I’m not going to be able to answer such questions in this public forum. I don’t think that many lawyers would. . . for fear of either violating an ethics rule, creating an attorney-client relationship based on only a blog comment, OR for giving advice in a situation where they know so few surrounding facts that their advice might be misconstrued or mis-applied. “The devil is in the details” particuarly when it comes to legal issues!

    That said, I also worry about folks disclosing too much, things that perhaps should be discussed confidentially, on blogs and other websites.

    If you have questions like this, please contact an attorney directly that has the background knowledge to really be of help. The questions above are certainly valid legal questions and they’re worth the time to see about getting them answered.

  7. It sounds like the POA is just a way to create a dictator HOA board. With different people elected each year, the clause that gives “decisions can be made at the description of the board” seems to mean that no matter what the covenants state, the board is in control. Our board shows no mercy and has caused much discontent in a community that is well kept and doesn’t need board members walking around with cameras and notepads and “nit picking” at unimportant items. Members of the community only get to vote once a year and even with signing petitions protesting a certain decision, the board feels empowered to ignore home owner’s opinions.
    That’s all I have to say on the matter. Wish I never became involved in such a community.

  8. If a property owners association was established AFTER 1994 can they submit themselves to the Georgia POA Act even though there is no mention of the Act in the covenants?

    • I hesitate to answer that question, as all sorts of facts can come into play and change my answer, but in general, I’d say that it is something that an association established after 1994 should consider. I recommend that you consult with an attorney well-versed in this area of the law early on in the process of considering an amendment. An attorney experienced in this area of the law can help you assess if the change will help you, how you can get it done, and give you some realistic expectations.

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