I’m Just a Bill: The Life and Death of HB 410

On May 8, 2018, Georgia Governor Nathan Deal vetoed House Bill 410 (“HB 410”). HB 410 was initially proposed to cap fees charged by community associations and/or property management companies to homeowners (or potential homeowners) for obtaining requested information in advance of a closing. It was heavily supported by the real estate industry because, in theory, it would lower closing costs for residential transactions. On the other hand, the proposed cap was arguably insufficient to cover the actual expenses incurred by the associations and property management companies with providing the requested information. The expected consequence was that association dues would rise across the State.

Under HB 410, associations would have had ten business days from receipt of a request for a statement of account to issue the statement. The proposed bill also specified that the request could be sent electronically, hand delivered, sent via first class mail, or by statutory overnight delivery. The bill also provided insight on when the statement was deemed “delivered.” This type of guidance on the process is not currently part of the Georgia Condominium Act or the Georgia Property Owners’ Association Act.

HB 410 would have further required that the association’s statement of account contain the following information:

  • Date of issuance;
  • Name of the unit owner(s) as reflected in the books and records of the association;
  • Unit designation and address;
  • Attorney’s name and contact information (if the account was delinquent and turned over to the attorney for collection);
  • Fee for preparing and delivering the statement;
  • Name of the requester;
  • Assessment and other related information (e.g., the amount of the regular assessments, the date the assessments had been paid through, any additional assessments, etc.); and
  • Signature of an officer or authorized agent of the association.

In addition to the mandatory information above, HB 410 also would have allowed the requester to seek additional information such as:

  • Open violations in the association’s official records;
  • A list of contact information for other associations of which the owner is a member by virtue of ownership of the unit in question;
  • A copy of the current covenants and bylaws of the association, including any adopted rules and regulations; and
  • Assigned parking, storage, or other similar limited common elements, as reflected in the books and records of the association.

Furthermore, HB 410 would have required the association to send the statement of account on the date it was issued and have either a 30 or 35-day effective period (depending on how it was sent). If the association made a mistake or obtained additional information during the statement’s effective period, the association could amend the statement of account, but a new 30 or 35-day effective period would commence upon delivery of the amended statement. If a mistake was made but not identified, HB 410 would have also provided that the association waived the right to collect any additional amounts from those who relied in good faith on the statement provided.

For the mandatory information listed above (i.e. the first bullet list), HB 410 would have capped the charge to no more than $100.00. If additional information was requested (i.e. the second bullet list), the proposed cap was for no more than an additional $50.00. If an expedited statement of account was requested, associations and property management companies would have been capped at no more than an additional $50.00. Finally, if an amendment was requested, fees would have been capped at no more than an additional$25.00.

The bill passed the Senate and House but, as stated above, was vetoed by the Governor. The bill is still relevant because a new version of HB 410 may be proposed during next year’s legislative session. There will be a new governor in place, and there are no signs that this hot-button issue is going away for either industry. For now, however, associations and property management companies can continue to allow the market to dictate reasonable procedures and charges for providing these types of services.

2018-08-27T21:44:45+00:00May 2018|