The Georgia Property Owners’ Association Act (“POA”) was adopted in 1994 to expand the powers of homeowner associations. Communities are not automatically submitted to the POA. Instead, either the developer/declarant must elect to submit the community to the POA, or the members must amend the declaration to submit their community to the POA. Most developers do not submit the community to the POA for a variety of reasons, so most communities are submitted to the POA through an amendment to their existing declaration. Some of the benefits of the POA are provided below:
Automatic Statutory Liens. Communities submitted to the POA are not required to file liens at the county courthouse for unpaid assessments or other charges. The POA creates an automatic statutory lien against a delinquent owner’s lot for any sums owed to the association. Pursuant to the POA, the declaration itself serves as notice that there is a lien on every lot in the community for any unpaid assessment or other charges. Accordingly, closing attorneys, title examiners, purchasers or owners must contact the association for a statement of any amounts owed to the association prior to concluding a sale or refinance of the lot, or risk the existence of a lien. If the association is not contacted and paid out of the proceeds of the sale or refinance, the lien will not be released. As a result, the lien continues against the lot and may have priority over subsequent liens and mortgages.
Amendments to the Declaration. The POA provides that amendments to the declaration for the community may be adopted and become effective with a vote two-thirds (2/3) of the association or such higher amount established in the declaration. Based on a provision in this statute, modifications to existing use restrictions or new use restrictions would be binding on all owners so long as the requisite vote for an amendment is obtained.
Late Fees and Interest. The POA provides that the association may charge a late fee of the greater of $10.00 or ten percent (10%) of the amount due, and interest at a rate of ten percent (10%) per annum on unpaid assessments and charges, if late fees and interest are permitted in the declaration.
Recovery of Attorney’s Fees from Owners. To the extent same are provided for in the governing documents, the POA expressly provides for the recovery of the association’s costs of collection of the delinquent assessments, including reasonable attorney’s fees actually incurred.
Buyers and Sellers are Jointly and Severally Liable to Pay Assessments. The POA makes buyers and sellers jointly and severally liable for all unpaid assessments unless the declaration expressly provides otherwise. As a result, if the automatic statutory lien is not paid at the closing, the association can proceed against the new owner, who will be personally liable for all amounts owed prior to the closing.
Fines and Suspension of Privileges. If provided for in the declaration, the POA gives the association a statutory power to assess fines against violators and to suspend violators’ rights to use the common property.
Tenants are Obligated to Comply With The Governing Documents. The POA also clarifies that all owners and tenants must comply with all the provisions of the declaration of covenants and the association’s rules and regulations.
Perpetual Duration. Prior to 1993, Georgia law generally provided that covenants expire after twenty years. The Georgia statute providing for the expiration of covenants, O.C.G.A. Section 44-5-60(d), was amended in 1993 to permit covenants to automatically renew, but the Georgia courts have held that covenants in communities that were recorded prior to 1994 do not receive the benefit of the new 1994 law. The POA expressly provides that O.C.G.A. Section 44-5-60(d) does not apply to the covenants submitted to the POA. Accordingly, covenants submitted to the POA have perpetual duration.