The 2022 legislative session has ended in Georgia. Here are a few state and federal legislative items impacting, or potentially impacting, community associations.
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.
The Consumer Financial Protection Bureau (“CFPB”) recently adopted a new Final Rule that amends Regulation F, 12 C.F.R. part 1006, which implements the Fair Debt Collection Practices Act (“FDCPA”). These are Federal rules governing certain activities of debt collectors, as that term is defined in the FDCPA. This is applicable to community associations because law firms that pursue delinquent homeowner debts are considered debt collectors under the FDCPA.
Addendum to Fannie Mae/Freddie Mac Condominium Project Questionnaire Adds Section for Building Safety, Soundness, Structural Integrity, and Habitability
In December 2021, Fannie Mae and Freddie Mac—the two government sponsored entities (GSEs) that guarantee most of the mortgages in the United States—added an addendum to their standard Condominium Project Questionnaire. It includes a new section that requires boards and/or property managers to disclose information related to building safety, soundness, structural integrity, and habitability. For that are unfamiliar, the Questionnaire is typically sent to an association when an individual is seeking mortgage financing to purchase or refinance a unit in the respective condominium.
Homeowners often look to their community association for help with resolving a dispute with a neighbor. But if the issue involves a party wall or fence (i.e., with no common property in between), there may not be much the association can do. The first step—as in most cases—is to see what the association’s governing documents provide. Hopefully there is language that offers some guidance or, at the very least, confirms that the association should not get involved.
Although many community associations have self-help rights in their governing documents, it’s not always easy to know when to use them. In this context, self-help generally refers to a community association’s power to: (1) correct a covenant violation itself: and (2) charge the costs of correction back to the offending party. Some community associations have carte blanche self-help language in their governing documents. Others only have it with respect to architectural control and/or maintenance violations. And some don’t have self-help rights at all.
Contractors are generally good at what they do, but this usually doesn’t include drafting agreements. All too often they submit a one-page proposal with a scope, price, and signature line for the association to accept. If the parties don’t intend to have any other written agreement, the one-page proposal may become a legally binding contract, and this is scary in many situations.
Last summer we published a blog article on safely conducting community association business during COVID-19. Most of the advice was directed towards membership meetings. For example, many associations decided to hold board elections without a meeting by written ballot, and then they called virtual townhalls to announce the results and satisfy the other annual meeting requirements. Fast forward a year later, many associations are sticking to this procedure—or at least a hybrid version by sticking to board elections without a meeting.
On September 4, 2020, the Centers for Disease Control and Prevention (“CDC”) issued a Federal Agency Order entitled Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19 (“CDC Order”). As the name suggests, the primary purpose of the CDC Order was to prevent landlords from evicting certain qualified tenants during the COVID-19 pandemic. The CDC Order was originally set to expire on December 31, 2020, but it was extended multiple times as the threat from COVID-19 lingered on.
The current real estate market has introduced a new wave of homeowners into community associations. Unfortunately, however, new faces usually result in familiar problems. One of the most common issues associated with new homeowners is unapproved modifications. One of the underlying functions of any community association is to preserve the neighborhood’s semblance of uniformity.