SB361: SB361 Property Owners' Associations; authorization of liens and use of assessments; provide

Georgia law lets property owners' associations (HOAs for planned communities) place liens on lots for unpaid assessments and foreclose on those liens under certain conditions. This bill changes several of those rules. It raises the minimum lien amount required before an association can start a foreclosure action from $2,000 to $4,000, and it adds a requirement that the association first get written authorization to proceed from the Secretary of State before foreclosing, on top of the existing 30 day notice requirement. The bill also creates a new registration system: when a property owners' association is first incorporated, its organizer must file registration information (contact details, bylaws, officer names, a list of lots, and the number of lot owners) with the Secretary of State, and must refile updated information every year by December 31. It directs the Secretary of State to write rules for administrative hearings to resolve disputes between associations and owners, with a filing fee that gets refunded to whoever wins, and directs the Department of Banking and Finance to write rules for how associations must hold member funds in escrow. Both sets of rules are due by January 1, 2026.

• Raises the minimum unpaid lien amount required before a property owners' association can foreclose on a lot from $2,000 to $4,000.
• Adds a requirement that associations receive written authorization from the Secretary of State before starting a foreclosure, in addition to existing notice rules.
• Creates a new registration requirement (O.C.G.A. § 44-3-236) requiring associations to file their bylaws, officer names, lot lists, and owner counts with the Secretary of State when incorporating, and to refile updated information every year by December 31.
• Directs the Secretary of State to create administrative hearing rules by January 1, 2026 for disputes between owners and associations, with a refundable filing fee for the winning party.
• Directs the Department of Banking and Finance to create rules by January 1, 2026 governing how associations must hold owners' funds in escrow.

Homeowners who live in communities governed by a property owners' association, the associations themselves and their officers, declarants who set up new associations, and the state offices of the Secretary of State and the Department of Banking and Finance, which gain new regulatory duties.

Homeowners facing an association lien would need to owe at least $4,000, not $2,000, before foreclosure could start, and would gain a new administrative hearing option to dispute charges. Associations would face new registration paperwork, state oversight of foreclosure authorization, and new rules for how they hold members' money.

• Section 1 amends O.C.G.A. § 44-3-232(c) to require written authorization from the Secretary of State before an association forecloses a lien, on top of the existing 30 day certified mail notice.
• Section 1 raises the minimum lien amount needed to permit a foreclosure action from $2,000.00 to $4,000.00.
• Section 1 keeps the existing rule that no part of an assessment may be used to pay for the cost of foreclosing on a lien.
• Section 2 adds new Code Section 44-3-236 requiring declarants to file an association registration with the Secretary of State at incorporation, including bylaws, officer names, lot lists, and owner counts.
• Section 2 requires an updated registration filing every year by December 31 after the initial filing.
• Section 2 requires the Secretary of State to issue administrative hearing rules for owner-association disputes by January 1, 2026, with filing fees reimbursed to the prevailing party.
• Section 2 requires the Department of Banking and Finance to issue rules for escrow of association funds by January 1, 2026.
• Section 3 repeals all conflicting laws.

1. 2025-03-27Senate Read and Referred (Senate)
2. 2025-03-25Senate Hopper (Senate)

• Matt Brass (R, SD-006)Primary sponsor
• Donzella James (D, SD-028)

• property owners' associations
• HOA liens
• homeowner foreclosure rules
• Secretary of State regulations
• escrow of association funds